Microsoft's turning tide may strand customers

"One of the things that is a very critical issue in software product management is dependencies," said DeGroot. "'Can I ship my product or do I have to wait for something?'"

The cascade effect is particularly noticeable on Yukon. "We called Yukon (SQL Server) 'the mother of all dependencies' because it just affects so many other products," DeGroot said. "It affects the desktop operating system; it affects the server OS; and it affects a lot of server software -- everything from Project and BizTalk to Commerce Server."

Longhorn, meanwhile, represents not only the next major release of Windows, but is also linked to the next version of Office, meaning that any further delay could hurt both of the company's cash cows.

How the Yukon delay will affect SQL Server sales is unclear. A Merrill Lynch survey released 8 March -- just ahead of the delay announcement -- found that, as of February, 62 percent of CIOs surveyed planned to purchase additional SQL Server licenses in the next 12 months, up from 40 percent in December.

Financial analyst Charles DiBona at research firm Sanford C. Bernstein predicted the delay of Yukon will have a "modest" impact on revenue timing and will not change anticipated earnings. He cut his forecast for Microsoft server product revenue by $100m for fiscal year 2005, which ends 30 June of that year, and $30m in fiscal year 2006.

Microsoft developers -- the main customers for Visual Studio and SQL Server -- have also voiced their opinions regarding the product delays. The Whidbey release of Visual Studio will have several common components, including Microsoft's .Net Web services software, embedded in both products.

Some programmers said they would rather Microsoft focused on quality than ship the product too early, so the delay of Whidbey and Yukon might provide more time to plan a migration to the new technologies. But other developers said they wanted access to Whidbey sooner rather than later.

Significant delays from Microsoft can affect customers' own product planning. Reuters, for example, is planning a release in late 2005 that relies on Whidbey tools, so the company should be all right as long as there are no further delays.

But, said Reuters' Evjen, "when [Microsoft] comes out so strong saying the release dates are going to be one way and then that's not true, it does make it difficult."