Will the dogs eat the dog food?
.
The New York Times
February 14, 2000
Microsoft Faces Skeptical Market With
Windows 2000
By JOHN MARKOFF
ENLO PARK, Calif. -- Will the dogs eat the dog food?
It is a way of wondering whether the customers will accept the product.
And among the elite corps of Microsoft programmers who labor to turn
out each new operating system, the dog food aphorism has become a
way of life.
But on the eve of the official release of Windows 2000, the software
giant's first new business-oriented operating system in four years, PC
power users like the venture capitalist Stewart Alsop must be giving
Microsoft Corp. pause.
Last week at his desk on Sand Hill Road above Silicon Valley, Alsop sat
with two portable computers. On one side of his desk was his old one,
still running the crash-prone Windows 95, now a half-decade old. On the
other sat his brand-new Toshiba running Windows 98.
As the rain pelted down on the Valley's green foothills, Alsop puzzled
over why his just-out-of-the-box computer was crashing each time he
attempted to change its screen resolution.
Emphatically, he said he had no desire to try to master yet another
operating system any time soon.
"I'm not happy," Alsop said. "Computers used to be fun."
And that, in a nutshell, is the chasm Microsoft must cross as it endeavors
to switch business users, large and small, to a new, more powerful
operating system that it says offers a host of benefits, ranging from added
stability for mission-critical business centers to better power management
for battery-hungry laptops.
Last week, a growing rumbling among early users and analysts suggested
that Windows 2000 might not be a runaway success. The company's
stock fell nearly 6 percent on Friday, closing at 99 15/16, after a Gartner
Group report indicated that a significant number of existing programs
used by large corporations would not be compatible with Microsoft's
new operating system.
Moreover, on Thursday night, during a conference call held by Dell
Computer to discuss earnings with analysts, the company's founder and
chairman, Michael S. Dell, threw more cold water on the Windows 2000
launch, saying Dell did not expect a big boost in the near future from
sales of the new operating system.
"We don't see a massive immediate acceleration due to Windows 2000,"
he said.
Still, Microsoft has faced a skeptical media and industry numerous times
before, and the company has almost always managed to outpace
expectations.
On Thursday, at a planned gala in San Francisco, Microsoft will officially
introduce what are in fact four different operating systems aimed at
different markets: desktop office users, Internet and other network server
applications, and, four months hence, a data center version that for the
first time will permit Microsoft to compete in the very high end of the
computer business.
Windows 2000 boasts a huge array of advanced features -- the user
document describing the product is 253 pages -- intended to put
Microsoft on an even footing with the Unix operating systems that
dominate corporate back offices.
That market is one that Microsoft has long coveted. Indeed, during the
past three years, Microsoft's new chief executive, Steven A. Ballmer, has
frequently sketched for reporters the company's strategy for attacking
Sun Microsystems, the leading Unix computer vendor.
Microsoft has long believed that by riding on a wave of "commodity"
computer hardware -- the vast Intel-based PC industry -- it would be
able to push its operating systems both up and down the computer
industry food chain.
To do that, it has continuously developed and expanded its operating
systems, from the original MS-DOS, which was quickly cobbled
together for the first IBM PC in the early 1980s, through Windows 3.0,
95, 98, NT, CE and, now, 2000. Each version was aimed at a different
market.
But until now, the high-end computer market has eluded the giant.
Sun Microsystems was quick to discover the Internet and exploit its
market potential for selling servers and server software, and Solaris, its
version of the Unix operating system, now has an inside position on most
of the nation's largest e-commerce servers. That has been a significant
advantage for Sun, the Mountain View, Calif., computer maker that was
founded to manufacture technical work stations in the early 1980s.
Now, however, analysts who are optimistic about Microsoft's chances at
the high end of the computer industry believe that the software publisher
will finally make significant inroads against its Unix rivals.
"Windows 2000 acceptance will be very, very large," predicted Mark
Anderson, a computer industry analyst and president of Technology
Alliance Partners. "The replacement rate" of Unix-based systems, he
said, "will go to four-to-one or better."
Underscoring Anderson's optimism is a feature list for Windows 2000
that begins with its ability to handle larger tasks -- in industry parlance,
"to scale" -- running on computers based on as many as 32 processors.
Such systems have increasingly replaced mainframe computers during the
past decade and are now used extensively in corporate computing
centers.
However, Microsoft's most pressing problem in the new corporate
computing market is that it must convince corporate computing managers
that Windows is an effective alternative to an increasingly stable and
scalable opponent: Linux, the free version of Unix that has recently begun
to gain adherents in corporate settings.
Microsoft counters the free-Linux argument by saying that the price of an
operating system represents only a tiny portion of the total cost of
ownership for a complete computer system.
"The cost of the software is a rounding error that can't be the major
deciding factor," said Jeff Price, group product manager for Microsoft
Windows.
However, some financial analysts say that Linux's inroads will make it
difficult for Microsoft to expand its 38 percent share of the corporate
computer server market as rapidly as it was able to grow its Windows
95 and Windows 98 consumer markets. And slowing growth could hurt
the larger Microsoft financial machine, which has operated as a growth
engine for two decades.
For their part, Sun executives say that despite Microsoft's aggressive
advertising, it has not developed a product that can find the sweet spot of
the growing Internet server market.
"They're out telling the world they're going to burn our house down, but
they don't realize we've moved," said Anil Gadre, vice president and
general manager of Sun's Solaris operating system division.
Sun executives say that Microsoft's assertion that its 32-processor
version will match Sun's performance is premature. Not only will the
data-center version of Windows 2000 not appear until later this year, but
Sun is already far more scalable, delivering clusters of up to eight
128-processor systems.
Whatever the outcome of the battle for the very high end of the computer
industry, Microsoft is planning to spend as much as $200 million to
convince corporate America that Windows 2000 is the right operating
system.
But the company does not appear to be playing to a wildly enthusiastic
audience.
"It's not the greatest operating system on a variety of accounts, but it's
good enough," said Brian Livingston, co-author of "Windows 2000
Secrets" (IDG Books Worldwide, 2000).
And therein may lie Microsoft's biggest challenge this year: Convincing
computer users like Alsop that "good enough" is worth the time and effort
of the upgrade. |
