Tech talk: Will Ballmer be sleepless in Seattle?

Microsoft is buzzing with the kind of activity guaranteed to distract all its busy little Microserfs from the serious worries...

Microsoft is buzzing with the kind of activity guaranteed to distract all its busy little Microserfs from the serious worries that are probably adding to chief executive Steve Ballmer's follical challenges.

The upside is that Orange has released the first mobile phone based on Microsoft's Smartphone specification; Office 11 beta is available for widespread testing; Windows .net is nearing completion; and the Tablet PC is due to be officially launched next week. A raft of products adrift on the troubled sea of the world economy or a lifeboat guaranteed to help the company ride the waves?

Microsoft is still smarting from the poor showing of the XBox games console, where "X" looks likely to be synonymous with "ex", as in Monty Python's Norwegian Blue ex-parrot sketch. It needs some hardware successes to bolster its almost-successful Pocket PC and rescue some credibility.

The worry-factor is that both the Smartphone and the Tablet PC are version-one products. On past experience these are often swiftly followed by version two, cheesing off the early adopters. And everyone knows that three is the lucky versioning number that brings stability.

Which of these two products will be the more successful is anyone's guess. As a consumer and business markets product the Smartphone has the advantage of potential users. In the consumer market it looks trendy enough to be a contender where brand loyalty can be easily swayed. In business the challenge will be to offer sufficient advantage to persuade corporate buyers to move away from their contracts with Nokia and Sony Ericsson.

The Tablet PC is a new proposition that has to define its own market. Some Tablets have been available for six months or so but they have not made a noticeable impact. Even major players such as Acer are hedging their bets by producing notebook hybrids using touch-sensitive screens to allow the pen-based interaction. Maybe the official launch will change all of this by pinpointing the likely users for the clipboard format originally espoused by Microsoft.

One thing that brings more confidence to these new fronts is Microsoft's cashflow. The company has not been immune to the financial downturn but it is by no means on its uppers.

A long-term ploy for the company has been to throw money at new markets and to persevere when many would have cut their losses and fled. This appears to be paying off in the handheld computer business, and the XBox is not dead yet. Such dogged determination must at least instil hope in potential customers, if not confidence.

As far as software is concerned, the future must definitely be causing concern in the Redmond HQ. Apart from success and failure, the company has to prove that it is giving value for money under the new licensing scheme. Particularly worrying is the sluggish response to the current Office XP release - though sluggish in Microsoft terms would be enviable sales figures for some of the productivity suite's competitors.

The main problem has been the lack of must-have features that have pulled in sales for previous editions. The current beta for Office 11 - XP's successor - is due to become a product in the middle of next year. If this is to succeed where XP failed it will have to offer more than just an XML orientation.

Nobody in IT rests easily these days and it is those with most to lose who must be having sleepless nights. Where better than in Seattle?

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