Microsoft surmounts Vista blues with Windows 7, marketing push

Bill Veghte hesitated when Microsoft Corp Chief Executive Officer Steve Ballmer asked him to oversee sales and marketing for Windows. He even went as far as questioning the CEO's commitment to the program.

Veghte, a senior vice president of the Redmond, Washington- based company, wanted assurance that Ballmer had learned from the shortcomings of Windows Vista, the operating system panned by consumers and corporations since it was introduced in 2007. The 18-year Microsoft veteran got what he came for: authority to make changes in the next version, Windows 7, and a record-breaking marketing push to promote the brand.

“We've got to be clear what Windows stands for,” Veghte, in an interview, recalls telling Ballmer. “This can't be business as usual.”

That the CEO had to reassure a deputy who spent 15 years working on Windows signals the challenge both men face to persuade investors the $17 billion Windows business can recover after Vista. As Apple Inc’s Mac lures consumers, repairing flaws in Vista and Microsoft's reputation are critical to reviving the stock after a 35 per cent slump this year.

“They know what's at stake. They know they have to get it right,” said Heather Bellini, an analyst at UBS AG in New York who recommends buying the shares. “They can't have another one that people think is skippable.”

When Vista went on sale in January 2007, more than two years later than planned, customers found the operating system ran slowly and crashed. Many programs wouldn't work, including some produced by Microsoft. Amid delays and decisions to yank features, computer makers moved slowly to design machines and programs tailored to the new software.

On Display: This time, Microsoft is getting partners on board earlier. The public effort started today as executives unveiled Windows 7 for the first time to software developers at a conference in Los Angeles, where attendees will get a full working version.

Windows 7 adds features to more easily connect personal computers to cameras, printers and home networks, said Senior Vice President Steven Sinofsky, who showed the software today. A new design gives users more options for managing files, folders and windows. Machines using Windows 7 will start up faster and switch to standby more quickly.

“We have to earn the credibility with the developer,” Sinofsky said in an interview. “I want to make sure I don't just say, ‘Please take me seriously.’ We have to demonstrate to them that they should take us seriously.”

Most Profitable: Windows is Microsoft's most profitable business, generating more than a quarter of revenue.