After years of hype, the big new system has debuted to acclaim but the computing landscape has changed, writes Karlin Lillingtonin New York.

With the arrival of Windows Vista and its totally revamped Office 2007 software suite, Microsoft has had its "biggest" and "broadest" product launch in its history this week, says chief executive officer Steve Ballmer.

Speaking at a launch event Monday in New York, he said: "I think we have a fantastic product for the consumer, but also for all the companies that want to innovate around Vista."

According to Microsoft chairman and founder Bill Gates, who also spoke at the event, Vista "has been the most tested and highest quality release we've ever made". He said that five million beta [ early release] downloads of Vista were made from Microsoft's website during its development and many people offered feedback on the operating system (OS). "In this case we're not just guessing at what customers want. They told us."

Many, especially the big PC manufacturers, will feel this long- awaited launch couldn't come fast enough. With a development cost of $6 billion (€4.6 billion) over five years, Vista has had a troublesome gestation. Not only were numerous planned features jettisoned, but the system's debut was ultimately delayed by two years.

PC manufacturers were frustrated that the OS was not available in time for the key selling period leading up to Christmas and had to lure consumers with a coupon scheme for Vista upgrades that bit into Microsoft profits in its most recent quarter.

Despite a 6 per cent increase in revenue over the same quarter last year, Microsoft recently reported a 28 per cent drop in second-quarter profit - primarily due to the coupon scheme. But a typically ebullient Ballmer said he expected the company would sell five times as many copies of Vista in the next three months as it did of Windows 95 - its most hotly anticipated software product ever - in its first three months.

At the Vista launch, Microsoft emphasised industry collaboration - more than 1.5 million devices are supported, for example - and made sure to highlight support for Vista from several key PC manufacturer partners, with Dell's departing chief executive Kevin Rollins, Toshiba president and chief executive Hisatsugu Nonaka, and HP executive vice-president Todd Bradley all appearing onstage with Ballmer and Gates. Microprocessor makers Intel and AMD were also represented, by Intel executive vice-president Seán Maloney and AMD chief executive Hector Ruiz.

In a sign of early consumer interest in Vista, Rollins expressed satisfaction with pre-holiday sales, when two-thirds of PC buyers registered for the Vista upgrade. He added: "We have sold tens of thousands of copies this weekend, out of the chute."

Ballmer outlined four ways in which he feels Vista and Office 2007 are significant: their ease of use; safety and security elements; the media centre for centralising home entertainment; and elements that make it easier to connect different devices and synchronise data.

Those features have generally had a thumbs up from analysts and reviewers, though many have pointed out that most of these elements are hardly "new" in industry terms, and are already present in some rival operating systems, such as Apple's OSX for the Mac.

But Microsoft's strength, say analysts, is not in doing things first but in eventually incorporating popular features in a way that appeals to a mass audience.

Another concern has been the sheer size and hardware demands Vista makes. It needs a minimum 512MB of RAM (ideally, at least 1GB), and takes up 15GB of hard drive space, making it a colossus among operating systems.

Nonetheless, while analyst Gartner says only about 15 per cent of current home PCs have the required hardware to run Vista, it predicts Vista will run on half of all PCs worldwide by 2008 due to new PC purchases - but will not be the dominant system for business PCs until 2010, because businesses are usually slower to adopt a new OS.

Yancey Smith, Microsoft communications manager for its information worker business, said that Microsoft views Vista as an "ecosystem" that extends forward for three years, when people are likely to have acquired Vista through a new PC purchase.

He added that Microsoft was pleased with the response of business customers as well. He cited Citigroup, which is now running 350,000 "seats" or licensed user versions.

For business customers, Smith feels the safety and security features in Vista, as well as connectivity and collaboration improvements for mobile workers, will make the OS attractive.

Ballmer deflected the concerns of some commentators that Vista may be the last of its species - that the future of operating systems will be away from major releases of full operating system versions, such as XP and Vista, and towards the regular, evolutionary upgrades seen with OSes like Apple's OSX and Linux.

He pointedly mentioned new areas for computing in which further development work is needed: voice recognition; speech; developments at the microprocessor level. "All those things need to evolve, and the operating system needs to evolve with them."

But such a stance underplays the degree to which entire business models and the computing landscape itself is changing, with rivals like Google, Apple, Sony, and Nintendo showing that Microsoft is not so much the formidible computing monolith of yore, but more a large and aggressive rival.

But even as Microsoft went out on the launch with special events worldwide, its antitrust woes with the European Commission rumble onwards. Last week, Microsoft competitors Adobe, IBM, Opera, Red Hat, RealNetworks, and Sun Microsystems sent a letter to the European Commission's antitrust agency charging that Vista violates EU antitrust laws and the EU's 2004 ruling against Microsoft.