With Windows XP Service Pack 2 (SP2) done, it was high time for the Windows team to make a choice. It could push the delivery date out (yet again) so as to incorporate all the new features it has been promising for the past few years. Or it could scale back the feature list and just ship the darned thing before too much more time elapses.

It looks like Microsoft has decided to cut Longhorn features and cut its losses. I think the Redmondians made the right decision.

Read about Microsoft’s plan to gut Longhorn here.

It’s hard to admit to over-promising in the hopes of over-delivering (though Microsoft should be pretty good at that by now). But it’s worse to let your developers get deep into coding for a new product and then pull the rug out from under them.

Microsoft has yet to ship the first official alpha release of Longhorn client; the various Longhorn builds circulating out there are pre-alphas. The first true alpha was supposed to go out this fall. So even though Microsoft has been encouraging developers to start coding for Longhorn now, it’s doubtful that many have made too much headway.

But there are other reasons I think Microsoft made the right—and, really, the only—choice that it could have at this point.

Microsoft hasn’t shipped a full Windows client refresh since 2001, when it delivered Windows XP. Windows XP SP2, as Microsoft has said repeatedly, is not a new version of Windows (despite all appearances to the contrary). If Longhorn slipped much past 2006, we’d be closing in on a decade between new Windows releases.

That wouldn’t sit too well with PC makers who love having a new operating system around which to market their machines. Nor would it make many Microsoft customers happy—especially those who have opted to license Windows under Microsoft’s Software Assurance licensing scheme. They are expecting some kind of a Windows update within the three years that are covered by the plan.

By delaying Longhorn beyond 2006, Microsoft also would be exposing itself to potential defections.

Check out eWEEK.com’s special report Enterprise Wars: Linux vs. Windows.

To date, there’ve been relatively few companies that have gone public with massive defections from Windows desktops to Mac or Linux desktops. (Servers is another story, as we know.) But if Longhorn got pushed out until 2009/2010 (the current “Blackcomb” timeframe), there could be more of an opportunity for disgruntled customers to think about switching, rather than fighting to stick with Windows.

To read the full column on Microsoft Watch, click here.