[via Knowledge@Wharton]

Also by Microsoft, it is about talent at the end….

[…] “Longhorn is financially important to Microsoft and the growth of the industry, but it’s also important to maintain Microsoft’s position as an innovative company. The consensus is that Apple has lapped Microsoft many times on innovation.”

Why be innovative? Werbach says that, in the short run, being innovative doesn’t matter much. Over several years, however, a failure to innovate translates into a brain drain. The best and brightest programmers and developers want to work for the most innovative companies like Google. If Microsoft isn’t viewed as innovative it loses out on talent, which may focus on rival products such as Linux.

“Psychologically, Longhorn is very important,” says Werbach. “If it succeeds, Microsoft continues to grow and attract the best talent. If Longhorn only maintains Microsoft’s past glory, it may affect the company over the next five years.”