The upcoming 64-bit version of Microsoft Windows, which Microsoftologists have taken to calling Windows 8 because Redmond has yet to announce an official name, has been appearing here and there and getting some press in the process. Microsoft has made a few statements, demonstrated early version of the OS, and some alpha code has even escaped into the wild. And the image that’s emerging is of Windows 8 as Microsoft’s take on the mobile transition, with the new OS running on everything from smart phones to server clusters. It also may represent Microsoft CEO Steve Ballmer’s last chance to preserve his company’s digital dominance.

Ballmer confirmed back in January that the next major version of Windows would have a version for power-sipping ARM processors, which are mainly installed in smart phones and tablet computers. He reinforced this idea more recently by explicitly saying Windows 8 would run on all the hardware platforms Microsoft currently supports right down to phones, calling the next version of Windows Microsoft’s “riskiest yet. ”

Ballmer is correct: Windows 8 is make-or-break for Microsoft.

PC sales in the developed world are declining while smart phone and tablet computer sales — particularly from Apple — have been exploding. Embracing mobile then is much more for Microsoft than a strategy for success: it is becoming a strategy for survival. The risk lies in Microsoft’s need to retain desktops while simultaneously leaping the mobile divide, which they have never before tried to do with a single product.

The alpha versions of Windows 8 that people are now trading over the Internet dates all the way back to last fall and may well be the version shown by Ballmer at CES in January. It was shipped to hardware manufacturers to test on their computers only to be leaked to the public. And what we see feels remarkably like, well, Apple’s OS X 10.6 Snow Leopard right down to the App Store.

Between features that are operational in the alpha version or are hinted at in the code comments and registry, users are now experimenting with a 64-bit operating system (32-bit for the ARM version) with lots of extensions for mobile use like syncing to the cloud, 3-second hibernation, push notifications (borrowed from Windows Phone 7), a built-in PDF reader, and an attractive new user interface with some elements of that borrowed from Windows Phone 7, too.

Also hinted at in the code are effortless network connections to servers, printers and other networked devices like televisions.

There could be lots of other features, too, though the user experience from Windows 7 was that Microsoft promised more than it ultimately delivered.

One feature that has been getting a lot of buzz from developers is Windows 8’s apparent ability to boot from a USB stick. The attraction of this is the idea, popularized in the Linux community, of carrying on your keychain your entire computing environment including individually tuned operating system and all needed applications and files. Put the USB stick in any borrowed PC and you are in business, right where you left off on another PC. But given that USB-boot has also been a popular way to circumvent PC security systems and it seems to go against Microsoft’s own Windows Live cloud strategy, this may be an alpha feature aimed solely at OEM hardware engineers and completely missing from the final product.

Most Microsoft product roadmaps show Windows 8 shipping to users in the fall of 2012 after entering a formal beta test at Microsoft’s Windows Developer Conference in September of this year.  Ballmer even said that last week in Japan, speaking to developers. But this week Redmond’s PR apparatus is saying Ballmer was wrong and the next version of Windows won’t ship to end-users until 2013.

Such a delay is not a good sign.

Though Microsoft is the dominant supplier of desktop software, what happens if a lot of those desktops go away or are not upgraded? That’s the fear that underlies Windows 8, making it so important. It is at platform transitions like DOS to Windows or standalone to networked where market leadership can change. Microsoft, as one of the smaller mobile players despite several tries over many years, is placing a huge bet that this time they’ll get it right. The company’s recent deal with Nokia, bringing the huge Finnish phone vendor into the Windows Phone fold, is an important part of this strategy.

But with desktops in decline overall, Microsoft losing desktop market share to Apple and being so far totally dominated in an exploding mobile market, the question to be answered is whether Windows 8 (or whatever it is finally called) will be good enough?

I doubt it.

If Windows 8 is a bust, then, what’s a Microsoft to do?  That’s my next column….