Biggest challenges and competitive threats.
(1) Its own installed base: The larger the installed base gets, the harder it is to move, and the longer it takes to transition.
(2) Early enterprise adoption: In general, Microsoft's best year usually comes the year after the release of new technology, not the year of the new product release.
(3) Linux and other open source software: While Linux is already a threat on the server side, Microsoft's current emphasis on reducing piracy on the client side, may accidentally accelerate the option of Linux as a client operating system.
(4) Virtualization: Microsoft has been unable to stall the market while getting its products into play, so the company now finds itself in the unusual position of having to battle its way back to a competitive position in the market against established competitors such as VMware.