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When the video clip showing the new Windows interface surfaced recently, I was encouraged by the direction that Microsoft (NASDAQ:MSFT) is taking with its flagship product. The new "tiles" interface looked beautiful, smooth, and had some very nice touch features.

Yesterday, I watched the full clip of the presentation (which is more than an hour) that includes Microsoft's Steven Sinofsky at the Allthingsd.com D9 Conference, and the more I saw, the more concerned I became. You can watch the video here.

First, I was very unimpressed with Sinofsky who basically is in charge of Windows for Microsoft. The moderator asked him some very hard questions about the realities of the Windows experience for millions of users that we all know is true. Rather than acknowledge the problems common users have had with Windows over the years, Sinofsky seemed to reject and brush off these remarks. Rather than acknowledge how Microsoft has lost ground in certain business areas, Sinofksy seemed arrogant and dismissive.

Sinofsky would have been much better off acknowledging the areas where Windows has been a bad experience (while talking about the good features of the product), and being up front that Microsoft is working hard to fix those areas for the next version. Acting like they don't exist and claiming he never gets these errors on his version of Windows because apparently he's the only one running it correctly just makes him look stupid.

Next, during the demostration of the new platform, it hit a snag when the user clicked on one of the applications such as Excel. As the moderator points out, going to Excel basically takes the user back to "old Windows" with a start button and task bar going away from the new interface. It's essentially like there are two Windows running, or "old Windows" with a nice new layer on top of it. Not good.

The questions at the end of the video reveal the same concern. One gentlemen repeatedly asks if there is a way to write software and make sure Windows stays in "new Windows" and doesn't go back to "old Windows."

The simple fact that these questions are being asked is a huge example of how Microsoft is not executed properly. When is the last time users asked similar questions during an Apple (NASDAQ:AAPL) software presentation? I hate to compare Microsoft to Apple at every turn, but the reality is that Apple is moving swifty through its product development in a much better fashion that Microsoft. Apple executives don't back pedal and turn defensive during presentations because frankly, there's nothing to be defensive about.

The explanation seemed to be that Sinofsky and his colleague were on the Windows team, and the Office team would have to explain what the next version of Office will look like and whether it will be re-coded to work with the new interface. Again, what a disjionted front. This would be like Steve Jobs discussing the next OS X version with a new revolutionary interface, but then saying, I don't know if Pages and other applications will be re-coded for the new OS X, you'd have to talk to them. That would never happen.

At one point the moderator asked what they were calling the new vertical navigation bar on the new interface and the answer was "we haven't named it yet." The moderator actually makes a side remark saying something along the lines of "See, that's why you're not in the gang of four" which refers to Google (NASDAQ:GOOG), Apple, Amazon (NASDAQ:AMZN) and Facebook. While it's a small example, it's still relevant and it shows a lack of vision I believe in Microsoft.

Between the rhetoric of Steven Sinofsky and the inability of Microsoft to completely move forward and depart the old version of Windows, I believe there is a major leadership problem at Microsoft. I've been careful not to jump on the get rid of Ballmer bandwagon, but I have to admit, I'm starting to think new leadership is sorely needed.

It's just amazing the difference in tone, rhetoric, confidence, everything when I look at this video of Microsoft executives talking about the next version of Windows compared to a product presentation by Apple. I'm not saying Microsoft has to be as good as Apple, but this was pathetic.

As a shareholder, I do think that Windows 8 still holds promise and that Microsoft is making positive steps to keep their flagship product fresh. While there is a step forward, there seems to always be a step back as well, and I can't help but think there is a major leadership issue with this company. If you are a shareholder, I'd encourage you to watch the full length video (link above) and come up with your own conclusions.

I'm long Microsoft because I think the company is cheap and has the presence and ability to continue to generate big earnings ahead, but there are still improvements that need to be implemented. I hope that major shareholders like David Einhorn continue to put pressure on the board to rethink the leadership of the company. And yes, I think I'm now on the "Ballmer has to go" bandwagon.

Disclosure: I am long MSFT.

Source: Losing Confidence in Windows 8