meanwhile in Gotic city..
Still other customers and VARs may look to Novell Inc.'s NetWare 5, due to ship
Sept. 14, for server consolidation opportunities, said Jon Oltsik, senior analyst
with Forrester Research Inc., Cambridge, Mass.
"These guys may not put all their eggs in the Microsoft basket," he said.
"Microsoft let Novell back in the door" by letting NT 5.0 "slide and slide and
slide."
Analyst Amy Wohl, president of Wohl Associates, Narberth, Pa., agreed: "If the
VAR sells NetWare and NT, he can sell them [NT] later and not get the check or
sell NetWare 5 with applications and get the check now."
The true beneficiaries of NT delays are Novell and some of the high-end
applications people, said Mary McCaffrey, a New York-based industry analyst.
She agreed the delays will have an immediate affect of pushing some NT
customers into NetWare's waiting arms.
With either network operating system, customers will get Internet Protocol
installed on-site, a major benefit, Oltsik said.
The delay of NT 5.0 actually is a "double-edged sword," said Bob Fernander, vice
president of PC products at Compaq Computer Corp., Houston.
On the downside, the delay slows some key functionality enterprise customers
are embracing,availability, scalability and manageability.
But the timing of the release is "poor because of the year 2000 issue,"
Fernander said, echoing concerns of other industry players. "There is [barely]
enough labor required by customers to get through the year 2000." Because of
that, NT 5.0 is taking a back seat, he said.
Right now, the delay of NT 5.0 is not impacting corporate IT spending, some
vendors said.
Fred Oh, director of product marketing for Acer America Inc., San Jose, Calif.,
said most customers have already absorbed the fact that NT 5.0 is late. "The
reality is customers are cynical and will believe it when they see it," he said.
Some hardware makers expect Microsoft may launch NT 5.0 Workstation, which
is closer to completion, this year, letting the server piece slip, a notion
Microsoft's Rob Bennett, Windows group product manager, dismissed. "There is
no possibility of that whatsoever," he said.
Whatever the case, NT 5.0 is already very late, and the later it gets, the more it
pushes out ancillary purchases.
"Certainly, NT 5.0 is the next big wave, and the delay has shifted related
software and hardware purchases out until mid-2000," said Rob Enderle,
operating system analyst at Giga Information Group, Santa Clara, Calif. "The
delay is a good portion of the reason we are forecasting flat PC volumes next
year and declining revenues for the industry in general in 1999."
If NT 5.0 had shipped in August, the industry would have seen a 20 percent to 30
percent volume growth in 1999 and solid revenue gains in hardware, software and
related services, Enderle said. That, of course, assumes NT 5.0 stabilized by the
first quarter of 1999 and could be implemented by November, he said.
Marking the first sign of progress in months, Redmond-based Microsoft on Aug.
19 released Beta 2 of Windows NT 5.0 Server, Windows NT 5.0 Server
Enterprise Edition and Windows NT Workstation 5.0. Now, in addition to
thousands of people at Microsoft, some 200,000 beta testers can examine the
30 million lines of code.
A third beta is on tap. Delivery dates are unclear, and Microsoft will not say
when the OS will ship.
But Microsoft officials said the delay is not hurting customers or partners. "Yes,
people want to get their hands on NT 5.0, but the opportunity is NT, and people
are working on that today. The same partners that are working on NT 5.0
solutions with the beta are also delivering high-quality NT 4 solutions today,"
said Bennett.
But others think Microsoft overreached and oversold with product promises and
now is facing the consequences.
Microsoft may have bitten off more than it could chew with the operating system,
said Forrester's Oltsik. "Now [that it is so late] they are doing a lot of arm waving
and saying, 'Wait for us, we'll be there,NT 4 is pretty good in the meantime,' but
there's too much strategic value in IT, and those [customers] will look elsewhere
for solutions quickly," Oltsik said.
Upon arrival, NT 5.0 should open new, constructive areas for resellers. Directory
infrastructure and desktop management will create opportunities to sell hardware
and services, but without that business, Oltsik said, VARs may have to fall back
on Exchange and NT file and print.
A recent Forrester report surveying IT managers found little or no urgency about
migrating to Windows NT 5.0, especially if it comes out late in the first half of
1999, while corporations are waiting for year 2000 issues to subside.
While hardware vendors put the best possible face on NT 5.0's tardiness, some
software resellers are alarmed.
"To say NT 5.0 delays are not a problem is just crazy," said Howard Diamond,
chief executive of Corporate Software & Technology, a Norwood, Mass.-based
reseller. "NT 5.0 is great, it'll be a sea change. The good news is it's that good;
the bad news is: Where is it?"
Another reseller summed it up: "What are we supposed to sell?"
An informal poll of resellers attending last week's Breakaway XChange event
found a general feeling enterprise customers may not be hurt much by NT 5.0
delays. Many of these customers are using the lag time to ramp up on NT 4.0.
Others will wait until the middle of next year to see that the bugs have been
worked out.
"It's similar to the Windows 95 situation," said Mark Romanowski, vice president
of Jade Systems, New York. "The corporate marketplace wants to wait a little bit
[to make sure it is not buggy.] There's not a major rush to replace 4.0
specifically in the enterprise. It's not going to fly immediately. No one has an IT
staff that's a bottomless pit, and a lot of enterprises are still migrating to 4.0."
Analyst Wohl said some enterprises are bulking up on hardware even without the
operating system to go with it.
"A lot of people are buying NT 5.0-ready hardware, but they're not necessarily
putting NT 5.0 on it," Wohl said. Some continue to run whatever they had been
running; some are moving to NT 4 since "5.0 is taking umpteen hundred years to
get here."
Umpteen years? Let's hope not.
ELLIOT MARKOWITZ contributed to this story.
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