With Microsoft's Windows franchise generating more than $10 billion in operating profit in fiscal 2009 despite the Vista disaster, Windows 7 has become a make-or-break product for Microsoft. So the optimism that CIOs and others have begun expressing for Windows 7 and CEO Steve Ballmer could very well signal a reversal in the giant company's stumbling fortunes.A huge article in today's Wall Street Journal describes the recent malaise at the company, which for a number of years seemed to have completely lost its ability to deliver new products that excited and delighted customers:

Windows Vista became a symbol of all that was wrong with Mr. Ballmer's Microsoft: When it came out nearly three years ago, the much-delayed software suffered from sluggish performance; it was slow to start up and shut down, especially on less powerful computers. It also had problems working with common devices like printers and digital cameras, the Journal says.

On top of that, the company seemed stuck in its own little (or was it very large?) echo chamber, seemingly unable to internalize the clear and distinct feedback the market was giving it. And some semblance of that exists today, right up to and including CEO Ballmer:

Microsoft executives insist Vista got a bum rap based on early problems that were fixed through software updates. Still, Mr. Ballmer says "there's more negative noise on Vista than I would have liked," says the Journal.

But the article goes on to cite the significant impact of the search deal between Microsoft and Bing that will greatly enhance Microsoft's impact in its search battle against Google, and the early momentum of Bing itself, which many believe is restoring some of the swagger the company had lost for a while.

Describing the comments he received about his company's current fortunes at his recent college reunion, director of platform strategy group Tim O'Brien said he was "congratulated" about Windows 7 and Bing, which represented to him "a completely different vibe" from what he'd become accustomed to getting from users of Microsoft products.

On top of that, says the Journal, retailers are expecting to receive a big lift from Windows 7, with category leader Best Buy Co. saying, "This new operating system isn't just a 'Vista that works.' "

But most important for the large-scale success of not only Windows 7 but also Microsoft, IT executives appear to be bullish on its ability to demonstrate that its more than worth the cost and complexity of enterprise-wide upgrades.

In a June survey of 100 information technology executives at large companies by Goldman Sachs, 76% of respondents said they eventually plan to upgrade their companies to Windows 7, indicating stronger demand for the software than for Windows Vista, which Goldman estimates is deployed on only 20% of business machines.

The article also quoted CIO Chris Dill of the NBA's Portland Trail Blazers, who refers to Vista as a "dud" but nevertheless says he expects to upgrade most of his 300 PCs by year-end.

However, the article does not mention that the Trail Blazers are owned by Microsoft co-founder Paul Allen, so at least a little bit of bias might be present there. So, yeah, that point is just a gratuitous nit-pick but I do it as a public service because if Microsoft is indeed on the upswing, I don't want it to get the bends by ascending too quickly and forgetting what happens when it loses touch with its customers.