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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Bald Man from Mars who wrote (6472)	5/4/1998 7:42:00 PM
From: Maverick	Read Replies (1) \| Respond to of 74651

MSFT synopsis at H&Q Technology Conf. HEARD IT HERE FIRST: Microsoft Corp. (Nasdaq, MSFT) for months has been downplaying the financial significance of Windows 98, the latest edition of its dominant PC software. The event this summer associated with the upgrade simply won't be as big as the colossal unveiling of Windows 95, itself a major technical step forward from Windows 3.0. It seems clear that Windows 98 won't be as big as its predecessor; it's just not that different. But there's room for a sneaky suspicion that Microsoft, for a variety of reasons, has been sandbagging the product launch. If federal or state prosecutors don't stand in the way and if the upgrade is a wild success, investors in Microsoft's stock could see an unexpected boost. This is an assertion that can't be proved, unless, of course, some memo shows up some day in a lawsuit that says something like ''Let's let on how successful this is going to be.'' But the presentation Monday at the Hambrecht & Quist Technology Conference by Robert J. Herbold, Microsoft's chief operating officer, could almost be termed optimistic on Windows 98. The new software ''anticipates where the world is going,'' Herbold said, noting that Windows 98 is compatible for digital video disks and WebTV. It also contains nifty software to help automatically clean up a PC's hard drive and conduct meetings over networks. And Herbold was as giddy as a career Procter & Gamble Co. executive can be about the rave reviews beta versions of Windows 98 have received in the trade press. Why would Microsoft downplay the impact of Windows 98, scheduled for consumer rollout June 25?

To: Bald Man from Mars who wrote (6472)	5/4/1998 7:52:00 PM
From: Maverick	Respond to of 74651

Government is too dependent on MSFT products, part II Feeling embattled these days, Microsoft is uncharacteristically touchy about the success of its government business. An executive in its Washington office observed, ''Now remember, we lose sales, too'' -- not exactly the take-no-prisoners ethos long espoused by William H. Gates, Microsoft's chairman, or Steven Ballmer, the executive vice president in charge of sales. Microsoft started its government business in 1986 with a one-person office in Washington. Today, the company has 120 people in its federal systems unit, about 20 more than a year ago. Given the Justice Department's antitrust investigation, and all the resulting public attention, the Microsoft staff refers jokingly to the Washington office as ''ground zero.'' Still, the Washington business is thriving. The company does not disclose its government sales. But industry analysts estimate that in the current fiscal year, ending in June, its government sales will be about $380 million, up nearly 40 percent from the previous year. The far higher sales will probably come over the next several years as large installations of Microsoft software gain momentum -- especially for Windows NT, which is typically used for big networks of PC work stations. The Social Security Administration, for example, began a program last year to install 70,000 Windows NT work stations, running off 5,000 Windows NT network server computers, by 2003. And the U.S. Postal Service is replacing its 80,000 point-of-sale terminals nationwide with Windows NT work stations. ''These government customers are very big, so when they make a decision, the rollouts can be huge,'' said Pete Hayes, general manager of Microsoft's federal systems business. To the government, the appeal of Microsoft products is the potential cost saving and the ease of using its industry-standard programs. In many cases, Windows NT systems are replacing systems that use the Unix operating system, initially developed for scientific and research purposes. With the steady improvement in PC performance, personal computers can match the performance of Unix work stations at perhaps half the price or less, by some estimates.

To: Bald Man from Mars who wrote (6472)	5/4/1998 8:08:00 PM
From: Maverick	Respond to of 74651

MSFT softens, part II But the company's critics concede that the changes address some of their sharpest complaints -- even as they raise questions about whether Microsoft can be trusted to maintain them. ''They could be significant,'' said Mitchell S. Pettit, director of ProComp, an industry lobbying group formed to oppose Microsoft. ''The real question is, are they permanent or are they temporary examples? (To make them permanent) they could have an agreement with the Justice Department on that.'' Provisions defended Microsoft, of course, wants no such agreement. The company's chief operating officer, Robert J. Herbold, said the trio of contractual modifications were business decisions. He also defended the original licensing provisions as ''completely legal and common in all sorts of businesses, including the software business.'' The timing of the concessions, though, has been hard to ignore. Each time, public sentiment or media coverage was mounting against Microsoft, just before strategic appearances before each of the three branches of government. Like steak thrown to an angry guard dog, the Microsoft concessions appeared designed to appease first a vexed Senate Judiciary Committee, then indignant Justice Department attorneys, and finally a trio of federal judges. The first concession came in early March, on the eve of a Senate hearing featuring testimony by company Chairman Bill Gates. Microsoft announced the day before the hearing that it would ease restrictions in contracts with 40 Internet service providers that had prevented them from promoting competing browsers on parts of their Web sites. Formerly, the companies had been prohibited from referring to competing browsers on the first page seen by consumers who chose the provider from a list within Windows' Internet setup routine. That's a powerful requirement: In a recent Georgia Tech survey of Web users, the study found that most novices chose the browser their ISP promotes.