Microsoft's Windows 2000 May Be Adopted Faster Than Expected
Redmond, Washington, Aug. 30 (Bloomberg) -- Microsoft Corp.'s Windows 2000 operating system, its most ambitious foray into the corporate market, may be adopted faster than previously thought, customers and researchers said.
The reliability and stability of the system, due to go on sale before year's end, have improved during recent testing, said Ash Shehata, chief information officer at Antelope Valley Hospital near California's San Fernando Valley. The hospital was one of more than 670,000 businesses, software developers and industry partners that received the third and final test version of the system on April 29.
More than 40 percent of the corporate desktops in the U.S. will upgrade to Windows 2000 by the end of next year, a study by World Research Inc. said. Microsoft, the biggest software maker, is pitting Windows 2000 against Linux systems made by companies such as Red Hat Inc., and offerings from Sun Microsystems Inc. and Novell Inc. Microsoft has made major strides in improving Windows 2000 during recent testing, customers said. ''In the beginning we were scared to death,'' said Shehata, who has been testing the system. ''It was a Halloween experience that turned into Christmas.''
Windows 2000 is the successor to the industrial strength Windows NT operating system and will be a major growth driver. The two systems together will generate 24 percent of Microsoft's overall revenue this fiscal year, up from 19 percent this year, predicts analyst William Epifanio of J.P. Morgan.
Windows 2000 has seen the most dramatic improvements in stability and ease of use, Shehata said. ''It has made me feel a lot more comfortable,'' he said, a day after discussing the product with Microsoft Chairman Bill Gates.
Six months ago Shehata told a very different story. ''We call it the blue screen of death,'' he said, referring to the blue background of Windows 2000 that appeared when the system had to be rebooted. Health care is among the most demanding industries for computer systems because crashes can jeopardize lives.
Windows 2000 crashed too often and generated bogus error messages, Shehata said. ''Three months ago I was ready to upgrade to Windows 2000,'' he said in February. ''Now, after what I've seen in the lab, I'm going to go with it only in non-core areas.''
Product Maturity
Today he's back to where he was late last year. ''We've been looking at the product for 12 months,'' said Shehata. ''We've seen the maturity level go from newborn to adolescent to adult.''
Microsoft is racing to finish Windows 2000 for fear of Linux is gaining ground, according to researchers, customers and analysts.
Linux is a highly stable system whose computer code is freely available on the Internet. The program has been commercialized by companies such as Red Hat. Linux's share of the server market more than doubled to 17 percent last year from 7 percent in 1997 while Windows NT remained steady at 36 percent. ''If they (Microsoft) don't ship a stable, reliable operating system by the end of this year, they're going to see Windows servers eroded by Linux,'' said Peter Auditore, vice president of World Research Inc. ''People will begin using Linux for Web servers and mail (e-mail) servers.''
Major Microsoft customers are testing Linux along with Windows 2000. ''We have a project evaluating Linux,'' said Boeing Co. spokeswoman Bev Clark. ''We have decided that we are not going to be adopting it as a Boeing standard, but we continue to evaluate it.'
Gates repeated last week that Windows 2000 will be shipped before year's end. The shipment date will be sooner rather than later, according to analysts and customers. ''It will be in stores before Christmas,'' said Rob Enderle, senior analyst at Giga Information Group.
The final computer code probably will go to CD-ROM makers by the end of October or beginning of November, Enderle said. Some analysts think it could be released for manufacturing at the beginning of October. It will take about six weeks for the CDs to be made and distributed to retailers.
An extensive $100 million advertising campaign involving radio and television will start in September, Auditore said. The marketing will be the biggest since Windows 95, which was introduced in August 1995.
Windows 2000 will be adopted faster than any of Microsoft's previous operating systems, Auditore said. Two weeks ago World Research released a study of more than 1,400 information technology professionals who plan to adopt Windows 2000 in their organizations. ''IT managers are expecting a rapid and extensive upgrade of existing desktops and servers to the Windows 2000 platform,'' the study found.
More than 80 percent of the servers in businesses will be running Windows NT or Windows 2000 by the end of next year, Auditore said. ''The stuff is very reliable, especially the server,'' said Auditore.
Windows NT and the Windows 2000 together will generate sales of $5.85 billion out of total revenue of $24 billion in fiscal 2000, which began July 1, predicts Epifanio, who rates the stock a ''buy.''
Windows NT generated sales of $3.82 billion out of overall revenue of $19.75 billion in fiscal 1999, he said.
Y2K
Various concerns have plagued Windows 2000.
The so-called Y2K bug has led many IT departments to focus on fixing glitches in existing systems rather than buying new ones. Some software mistakes the Year 2000 for 1900 because it only reads the last two digits of the year. ''It's fallen down our priority list,'' said Jeff Lyttle, information-technology spokesman for Bank One Corp., the fifth largest U.S. bank.
Bank One completed its Y2K compliance work in June and doesn't want to introduce uncertainty, he said.
In addition, a key feature for managing the computer network, called Active Directory, wasn't available for testing until four months ago. Active Directory is a kind of yellow pages that lists the networks PCs, printers and users for easier administration. ''Active Directory empowers me to control the desktop,'' said Shehata, who said it was among the biggest improvements in recent months.
Shares of Microsoft, which is based in Redmond, Washington, fell 1 to 92 1/4 |
