What are Microsoft's key challenges in 2006?

Microsoft is expected to enter the new year facing a number of hurdles - but the chief one will be to position Windows Vista as an enterprise product.

Analyst firm Directions on Microsoft, which last week published its list of Microsoft's top 10 challenges for 2006, cited the marketing of Windows Vista as its top concern.

According to the report: "Windows Vista could offer large organisations improvements in software development, security, reliability, systems management and user interface. However, public demonstrations have been full of cool graphics effects and consumer features that probably turn off more IT staff than they attract."

Microsoft's challenges in the order they were published are to:

• Explain to corporate customers why they should buy Windows Vista without waiting to purchase new hardware first.

• Publish a definitive set of guidelines on developing Windows applications to reduce buggy software and security flaws - and then enforce it.

• Communicate its intent for entering into the managed-solutions market, as well as which parts of this business it will leave to its partners.

• Quickly distribute to developers the next generation of basic tools to support Vista.

• "Gel" its online strategies, such as starting up a new advertising platform and clarifying these offerings to small businesses.

• Make consistent its strategy for enterprise resource planning so its partners can support, sell and transition new customers to its newly named Dynamics product line.

• Move forward on its Dynamic Systems Initiative, potentially a new standard for software that manages other software. Also, document components, such as the Systems Definition Model, and create and promote related developer tools.

• Establish its policy on product releases and show discipline in adhering to it.

• Justify the Xbox 360's high price amid pressure from competitors; develop a must-have Xbox game title for consumers; and eliminate the Xbox shortages and glitches that occurred early on.

• Align pricing of its Software Assurance maintenance plan licences with its actual product release cycles.

Dawn Kawamoto writes for CNET News.com