Road and Track used to define “sports car” as a vehicle with nothing in it that doesn’t make it go faster.

That’s the problem with Microsoft Windows. But I’m getting ahead of myself.

This is the Product of the Year issue, so in addition to reviewing and updating a past prediction, we’ll give an award, too. The prediction, first made two years ago and updated last year, is Microsoft’s coming retrenchment. No, we aren’t ready to talk about sports cars just yet. That would be about products and technology. Microsoft’s technical problems are merely symptoms.

Two years ago I pointed out that Microsoft was fighting wars on too many fronts. Napoleon and Hitler both lost their empires through this mistake, and Bill Gates, while no slouch when it comes to battlefield tactics either, is fighting on many more fronts than either of the aforementioned megalomaniacs.

The result: An inability to win anywhere. Windows 2000 is shipping way late and to unprecedented apathy for a Microsoft release. It fails to replace Windows 9x as planned, nor does anyone seem to care about the next version of this lineage, either. The Macintosh, left for dead not long ago, is gaining ground in both marketshare and mindshare as a desirable desktop OS, and Windows CE is in such bad shape that Microsoft has dropped the CE name altogether … the new brand is “Windows-powered”, which will only tick off the handful of people who buy the silly things. Even Psion has more PDA mindshare.

Meanwhile, Microsoft’s most important leading indicators are dismal. The critical Active Directory isn’t getting much ink, for example. Failure to generate press coverage would have been unthinkable this close to any previous Microsoft release date. Worse, much of the coverage Active Directory does get compares it unfavorably to Novell’s far superior and more mature NDS.

Then there’s Linux. Nothing about Linux should have led to corporate success. Despite its low price and technical excellence, Linux’s open-source business model was baffling to corporate IS decision-makers, and bemusement doesn’t lead to sales. Only NT’s chronic instability could have achieved success for Linux. Now Pandora’s Box, in the form of a Linux-led dissipation of corporate IS’s longstanding fear of UNIX, is wide open.

Worst of all, though, is Microsoft’s corporate satisfaction rating, which has dropped from a high of over 75% to recently reported levels approaching 40%.

Not a good sign.

Not that Microsoft deserves sympathy. Its coming implosion is self-inflicted and richly deserved. As huge, wealthy, and influential as it is, it has no excuse for its products’ poor construction. And when the most significant innovations it can call its own specify and render fonts, something is seriously wrong. (We’re still not quite ready for sports cars, but we’re close.)

Microsoft’s basic problem is strategic, not technological. Its core strategy is to control architecture. Unfortunately for Microsoft, the Internet has expanded the architectural landscape exponentially. Rather than carve out a defendable territory, Microsoft has demonstrated a compulsion to announce a strategy for each and every new buzzword that comes along.

It should have stuck to what it knows: The desktop and small systems. Instead, it tried to turn Windows into something it isn’t — everything.

Now we’re ready for sports cars. Novell embraced the Road and Track principle back when it first released Netware — it took out everything that didn’t make file and print services run faster. Microsoft, in contrast, tried to use one code base to run desktops, file-and-print services, database management, application services, and batch processing. It’s as silly as building a vehicle to serve as race car, truck, airplane, locomotive, and combat vehicle. It’s why an Internet browser is now integral to a server operating system — the embodiment of pointlessness.

Microsoft has oversold its products so excessively that it’s credibility is lost, and the results will be excruciating. Look for the first public symptoms later this year: More reorganizations, staff departures, statements about “focusing on core competencies” … and, from The IS Survival Guide, Dirty Harry’s A-Man’s-Got-To-Know-His-Limitations Award, for messing up a stupendous opportunity to do things differently and better.

In 2000, Microsoft’s implosion will begin.