How will the departure of Bill Gates from full-time involvement with Microsoft affect the software developer? Microsoft’s long-suffering shareholders may finally see a glimmer of hope for a better future.

Suffering shareholders? Gates, still the world’s wealthiest man, isn’t suffering. He remains a major shareholder of the company he co-founded. But for latter-day investors, the ticker tells a depressing tale.

The days of the big increases in Microsoft’s share prices are long gone. Microsoft stock peaked at nearly $60 per share (split adjusted) before the turn of the millennium. Yesterday, it closed at $22.10.

Why are investors so downbeat, despite the fact the software giant is much larger and profitable now than in 1999?

Investors look to the future when judging an investment. Microsoft’s prospects for future growth don’t look great.

Microsoft remains beset by legal challenges, particularly in Europe. More significantly, the company is overly dependent on the continued success of its two big cash cows: Windows and Office. Other aspects of its business are marginally profitable, at best.

New versions of Windows and Office, both due within a few months, haven’t re-ignited the passion of investors. Microsoft Windows has such a large share of the operating system market, there is little room to grow with Windows Vista, other than by tagging along with the slow growth in new PC purchases. Many users of Microsoft Office are largely satisfied with its current capabilities, so they have little interest in purchasing an upgrade.

Microsoft’s top management team reminds me of an aging group of rock superstars, out of touch with current trends, who keep re-packaging their past musical successes in a desperate attempt to milk more money from the public. Microsoft’s Biggest Hits has been followed by Gates’ Golden Greats. Who wants to buy The Very Best of Ballmer?

At some point fatigued buyers will say, “Microsoft, we liked what you did back then, but this is now. Don’t you have anything new?”

Unfortunately, Microsoft’s good products are not new and their new ones are not good. The company fumbled the baton of software innovation, which was picked up by others, such as Google.

I have a lot of respect for Ray Ozzie, the software veteran who will fill Gates’ shoes as Microsoft’s chief software architect. Ozzie was the key talent behind a number of software hits, including Lotus Notes, Lotus Symphony and Software Arts’ VisiCalc. Will new frontman Ray Ozzie play the sweet music that will rejuvenate Microsoft’s stagnating fortunes? He’ll need to pull together a winning creative team to ensure yesterday’s software company remains relevant tomorrow.

Technorati Tags: Bill Gates, Microsoft, Microsoft stock, Windows, Office, Microsoft Windows, Windows Vista, Microsoft Office, Google, Ray Ozzie, chief software architect, Lotus Notes, Lotus Symphony, VisiCalc

Windows Vista is more than half a year from release but Microsoft recently unveiled more specific information about hardware requirements for its next generation operating system on its Windows Vista home page. Will your PC be able to run Vista?

Based upon the stated hardware requirements, it appears most PCs made in the past two to three years will be able to run at least the base functions of Vista. However, to receive all the advantages of the new OS, including the Aero graphical interface, you may need to upgrade your hardware.

 

The core functions of Vista will run on what Microsoft calls a Windows Vista Capable PC with: 800 MHz or faster processor, 512 MB of system memory, 15 GB of available capacity on your hard drive and a graphics processor that is DirectX 9 capable.

To get the full Vista verve, you’ll need a Windows Vista Premium Ready PC with: 1 GHz processor, 1 GB of system memory, audio output, Internet access, DVD-ROM drive, 40 GB hard drive capacity with 15 GB available, and a Windows Aero capable graphics processor with a minimum of 128 MB graphics memory.

For most business users, it’s the latter requirements for graphics processor and graphics memory which will prove the biggest hurdle. While computers designed for gamers use powerful graphics processors, the typical business PC hasn’t needed one, until now.

Is there an easy way to determine if your current system can handle Vista? Yes there is, or at least, there was until about a day ago. Microsoft developed Windows Vista Upgrade Advisor for Windows XP. I installed and ran this beta test software on a PC that’s two years old. Upgrade Advisor said it could run the core capabilities of Vista, but requires a graphics upgrade to run Aero.

The Advisor software also listed a number of software drivers that required upgrades to operate peripherals such as printers and scanners. Of course, most of these Vista-capable software drivers are not generally available at this time, since many hardware makers have not released Vista drivers to the public. I suspect it is the muddle caused by users contacting manufacturers for these unavailable software drivers which led Microsoft to temporarily pull this software from its site.

After suitable modifications, presumably the Upgrade Advisor beta will be restored soon on this page. Update: The software is back. A final release of Upgrade Advisor, which will also assess software applications for compatibility, should be available in October.

Should businesses plan to upgrade to Windows Vista? From what I’ve seen of an early version, the security improvements will be well worth the upgrade. However, I believe Aero’s eye candy will appeal primarily to home computer users, so a graphics upgrade isn’t critical.

Technorati Tags: Windows Vista, Microsoft, operating system, Vista, Aero, Windows Vista Upgrade Advisor, software drivers