Heads Roll As Microsoft Misses Vista Target

This time around, Microsoft held someone publicly accountable.

After another delay in the release of its Windows Vista operating system, Microsoft last week put a new executive in charge of future Windows projects and replaced several other managers. The changes are designed to better align Microsoft's desktop and Internet software teams and get products to market faster.

That's imperative after Microsoft co-president Jim Allchin said last week that the already much-delayed Vista system won't be generally available until January, months later than promised. It means Vista will ship too late for the important holiday sales season, a deadline few in the industry expected Microsoft to miss. Versions of Vista for Microsoft's largest business customers will ship in November. The stakes are high: Goldman Sachs estimates Vista will add $1 billion to $1.5 billion in revenue to Microsoft's top line in the six quarters after its release.

Two days after the bombshell, Microsoft put Steven Sinofsky, a senior VP from its Office division, in charge of developing future versions of Windows. He replaces senior VP Brian Valentine, who's been assigned to get Vista out the door without any public statement about his next project. Microsoft also said Mike Nash will leave his job as head of its security technology unit for an unspecified role.

Microsoft fell behind its timetable for developing Vista's security features by several weeks, which would leave PC makers short of time to install the system in time for holiday sales, Allchin said. "The industry was asking for more certainty," he said. Product manager Michael Burk says the company needed more time to finish Vista features, including user account control, which can block malware from accessing system files.

The delay shouldn't be a problem for most large companies, Gartner analyst Michael Silver says--most will undertake a year and a half of testing before they install Vista anyway. Plus, he says, companies might find a silver lining: PC makers without a new operating system to boost sales might be inclined to cut fourth-quarter PC prices.