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


To: Bearded One who wrote (10214)8/20/1998 11:51:00 AM
From: Spartex  Respond to of 74651
 
Key Microsoft Product Is Year Late,
And Counting

Date: 8/20/98
Author: Lisa Wirthman

Microsoft Corp. has stopped making promises about when it
will deliver Windows NT 5.0, its most crucial new product
moving into the next millennium.

The world's largest independent software maker said earlier this
week that it had delivered a second test version of NT 5.0 to
customers who want to start evaluating the product.

But that delivery is late. Microsoft had promised to deliver this
version no later than June. Analysts now predict the final release
of NT 5.0 also will be delayed.

Microsoft executives have said the company is betting its future
on NT 5.0. Where Microsoft's Windows 95 and Windows 98
dominate PC operating systems, the company wants NT to do
the same for networks.

But the development of NT 5.0 has resulted in a long list of
broken promises. When Microsoft first unveiled its plans for
NT 5.0 in '96, executives said it would be ready by the end of
'97. The completion date then slipped to mid-'98, then to
year-end, then to early '99 and then to mid-'99.

''How many times can you cry wolf?'' said analyst Glenn
Gabriel Ben-Yosef, president of Clear Thinking Research Inc.
in Boston. ''Microsoft has really hindered (the software
industry) in many ways by these false promises.''

Many companies take their cue on what products to develop,
and when, from major Microsoft releases. Users also plan
purchases based on those releases. Although Microsoft has
never given an official release date for NT 5.0, company
executives at times have predicted when it would ship.

Last year, Microsoft promised to announce the ship date for NT
5.0 when the second test version was completed. That milestone
is here, but customers still have no clear idea when to expect the
final product.

''That's their mode of operation,'' said Dan Kusnetsky, an
analyst with International Data Corp. in Framingham, Mass.
''They talk about a grand vision, and the technology follows
-sometimes. But people can't build their networks on a vision.''

Microsoft said Tuesday it plans to do a third test version of the
software. But the company wouldn't say when that test version
or final product will be ready.

''It's too early to say that we feel confident in a date,'' said Rob
Bennett, product manager for Windows NT 5.0 workstations.

Windows NT competes against other network operating
systems such as Novell Inc.'s NetWare and larger Unix
systems. It has sold well among small and midsize businesses
because it has been cheaper and easier to use than Unix, and
better marketed than NetWare, analysts say.

Microsoft hopes NT 5.0 will be strong enough for the biggest
corporate users.

Microsoft is finding, though, that it's a huge leap from software
that runs single PCs to software that runs huge global networks.

''It's a mammoth project,'' Bennett admitted. ''It's harder than
we thought it was going to be.''

Microsoft faces a significant task, agrees IDC's Kusnetsky. The
big-business market differs greatly from the high-volume PC
software market.

''It's a market that Microsoft has not yet gotten its arms
around,'' Kusnetsky said.

Almost everything Microsoft must do to develop NT 5.0 differs
from how the company typically operates, Kusnetsky says. The
software must be tested differently because ''it literally cannot
go down,'' he said.

Microsoft developers also tend to divide tasks among a number
of teams and then integrate the work at the last minute,
Kusnetsky says. ''That means teams are often doing redundant
work, which makes the whole product bigger,'' he said.

And the bigger and more unwieldy the software gets, the harder
it is for Microsoft to deliver it on time. NT 5.0 already includes
at least 30 million lines of code, compared with 16 million in
NT 4.0.

Bennett admits to difficulties. One challenge has been enabling
customers to upgrade directly to NT 5.0 from Windows 95 and
Windows 98, he says.

And while all of the promised features are present in the second
test release, they aren't all fully tested, Bennett says.

But customers shouldn't read too much into the delays, Bennett
says. ''I can't target one time where we've been good at
predicting a ship date,'' he said. ''It's not an indication of the
product development process at all.''

At least one customer agrees. ''I'm not concerned about the
technology,'' said Roger Abell, a systems programmer at
Arizona State University who is testing NT 5.0. It's the finer
points of the product's design that are causing Microsoft the
most trouble, he says.

Microsoft is trying to create operating software that can fit many
different environments, from large corporations to universities,
Abell says. ''They're trying to write a new operating system for
the next millennium,'' he said. ''And they've got to be really
careful with what they lay down for the cornerstones.''

It's Microsoft's desire to ship the highest- quality product that
has caused the delays, Bennett says.

''Has the product taken longer then we originally anticipated?
Yes, absolutely,'' he said. ''Does that mean that because it took
longer the product isn't going to be as good? No.''

Analysts are more skeptical about the broken promises. Some
see them as a ploy by Microsoft to get customers to wait for NT
5.0 instead of buying a rival product.

''They want to pre-empt sales of competing products,''
Ben-Yosef said.

Customers shouldn't wait any longer, he says. ''It's time for
users to go on with their lives,'' Ben-Yosef said. ''They need to
get something that works now. . . . If they (wait), they'll miss
the bus.''

And companies that make other choices now will encourage
more responsible behavior from Microsoft in the future,
Ben-Yosef says.

''Users really should be driving technology companies, not the
other way around,'' he said.

(C) Copyright 1998 Investors Business Daily, Inc.