I assume that you are receiving empty string as a result, correct? ($output == "")? Please check if you are not running this command in PHP safe mode: http://pl1.php.net/manual/en/features.safe-mode.php, http://pl1.php.net/manual/en/ini.sect.safe-mode.php. shell_exec() is disabled when running in safe mode.
You may also check output of:
<?php
phpinfo();
?>
It should list your PHP settings.
Please inspect Windows event log on your host. Look for any unsuccessful operations (lack of access rights in the moment of doing this shell_exec()).