Microsoft's operating system (OS) development times are too long and they deliver limited innovation; their OSs provide an inconsistent experience between platforms, with significant compatibility issues; and other vendors are out-innovating Microsoft . That gives enterprises unpredictable releases with limited value, management costs that are too high, and new releases that break too many apps and take too long to test and adopt. With end users bringing their own software solutions into the office...well, it's just a heck of a sad story for Microsoft.

Those arguments probably don't surprise you. (See Should Microsoft Throw Away Vista? and Vista Never Had Its Moment in 2007.) But the Gartner analysts offered several more points to show how Windows is in a whole new world of hurt. High on the list is Windows' complexity, its lack of modularity, its hardware footprint (particularly on low-end PCs) and the increasing movement to Web-based and other OS-agnostic applications.

A few of their arguments:

Mature markets have limited growth in terms of PC hardware. The computer hardware business is expected to grow only 2 percent to 8 percent between 2005 and 2011. The opportunities for PCs are higher in emerging markets, where the growth rate is 16 percent to 24 percent for PC hardware—but they're more price-sensitive so vendors and enterprises have to keep the price down. That means less memory and storage, for example—and Vista is not appropriate for that sort of memory model. Linux is the preferred OS on low-end PCs including "one laptop per child" and certainly Microsoft doesn't want to see that happen. "All these things are in opposition to what we've seen with people expanding PC use year after year," MacDonald said.

Version compatibility is relevant in more than software development terms. For example, they said, iPhone's version of OS X is closer to the desktop version of the Mac OS than Windows Mobile is to Vista.

Servers are evolving in multiple and sometimes conflicting directions. Some industry trends imply that we need to scale up computing, such as single instance data stores and partitioning. Others are driving it down, such as grid and cloud computing, server farms and cluster computing. The result, they believe, is that enterprises will want to customize the OS based on the need.