Wednesday, February 16, 2000
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Small Business

Business Tools / Software, Technology and New Products to Help Your Companies;

Windows 2000 Not for Everyone

By: LAWRENCE J. MAGID
SPECIAL TO THE TIMES

Microsoft on Thursday will release Windows 2000 with a multimillion-dollar advertising campaign aimed at small businesses.

The company is hoping millions of business users will switch to the new operating system, which replaces Windows NT. Windows 98 will continue to be aimed at the consumer market until the company releases Windows Millennium Edition later this year.

Windows 2000 has a lot of things going for it, but just because it has some advantages over Windows NT and Windows 98 doesn't mean everyone should buy it.

My purpose here isn't to evaluate the software--that's another issue--but to counsel caution before you undertake a major operating system upgrade. Even though Microsoft did a good job testing thousands of business applications, there are always rough spots in a transition. Microsoft has, in fact, dedicated several Web pages to upgrade issues (http://www.microsoft.com/windows2000/upgrade).< If you're considering upgrading to Windows 2000 or any other new operating system, you need to take stock of your existing hardware and software, network connections and overall needs.

If you then decide to upgrade, do it when you can devote time to the changeover. If you have multiple machines, make the change in stages so that you have backup systems running the old operating system during the transition.

First, determine that Windows 2000 is compatible with your machines. Microsoft says you need, at minimum, a PC with a 133-MHz Pentium-compatible CPU, 64 megabytes of RAM and one gigabyte of disk space. I'd feel better with a faster CPU (300 MHz or better) and several gigabytes of disk space. A bit more memory would be nice too.

Microsoft has done a good job of ensuring that most business applications will work with Windows 2000. But before you take the plunge, be sure all the programs you depend on are compatible with it. Major applications such as accounting, word processing and database software probably will be OK, but some specialized programs, games and multimedia applications may not be compatible.

Be sure there are Windows 2000 drivers for all your hardware, including printers, scanners, digital cameras and sound cards. Microsoft has set up a Web page where you can search for your hardware and software by company name, model or type to see if it will work with the new operating system (http://www.microsoft.com/windows2000/upgrade/compat/search). If a device or program isn't on the list, it doesn't mean it's not compatible. Check the manufacturer's Web site or call the company's technical support department to be sure.

Your PC may not be fully compatible with Windows 2000 even if it has enough memory, CPU power and storage. Microsoft says some machines will need a basic input output system, or BIOS, upgrade before they can handle some of the power management features built into Windows 2000. The BIOS is a chip on your machine's motherboard; sometimes you can upgrade it with software, and sometimes you need to replace the chip itself.

I can't stress enough the need to allocate plenty of time to perform the upgrade. I had trouble getting Windows 2000 to work with my local area network and cable modem, for example.

If you're familiar with Windows 98, you'll feel pretty comfortable with the new operating system's look and feel. Nevertheless, there is always something to learn. If employees will be using your new operating system, you may need to train them before they are comfortable with it.

There also is the issue of whether Windows 2000 is compatible with your pocketbook. The Windows 2000 Professional Edition for desktop and mobile computers is $219 if you're upgrading from Windows 98, $149 if you're upgrading from Windows NT and $319 if you're buying it for a new system.

I recommend most businesses wait before undertaking a wholesale upgrade. If you have multiple machines and time to experiment, consider upgrading a single machine to see how it goes. If you find that all is well, you can upgrade your other machines. *

Technology reports by Lawrence J. Magid can be heard at 2:10 p.m. weekdays on the KNX (1070) Technology Hour. He can be reached at larry.magid@latimes.com. His Web site is at http://www.larrysworld.com.

 

Descriptors: MICROSOFT CORP; COMPUTER SOFTWARE; TECHNOLOGY; PRODUCT DEVELOPMENT;

 

Copyright (c) 2000 Times Mirror Company

 

 

 

 

 

 

 

 

Windows Delays Give Linux a Chance

By MICHAEL J. MARTINEZ, AP Business Writer

     SEATTLE--The new chief executive of Microsoft Corp. knows Windows 2000 was far too frequently delayed. And he acknowledges the delays may have given other computer operating systems a leg up.
     "I think in some spaces we've given a little bit of opportunity," Microsoft president and CEO Steve Ballmer said Wednesday. "I think in all of them we have a chance to come back."
     No one faction in the battle for server operating systems has enjoyed that opportunity more than Linux, the grassroots software that was created by enthusiasts worldwide and is freely available for anyone to download on the World Wide Web.
     Back in the spring of 1998, Microsoft was riding high on the success of Windows NT 4.0, and promising that its successor would be out in less than a year.
     At the same time, computer users started hearing about Linux. And while some Microsoft foes saw it as a way to unlock them from the dominance of Windows, most experts were skeptical.
     Times change.
     Windows 2000, the successor to NT, was set for its launch today, a year late. Meanwhile, companies large and small -tired of waiting for its promised new features and bug fixes -have turned to Linux to run their computer systems.

     The delays have given all of Microsoft's competitors time and opportunity, Ballmer said. Some universities and Internet service providers in particular abandoned Windows and went to Linux, he said.

     "Nobody likes to wait," said Larry Augustin, founder and CEO of VA Linux Systems, which sells hardware bundled with Linux software. "What we have is an affordable alternative that will not only cost less, but provide a lot more flexibility."

     The consultant International Data Corp. reports that Linux now represents 24 percent of the total market for business operating systems, up from 16 percent a year ago. Windows, meanwhile, has remained relatively stagnant at 38 percent. The remainder is held by various versions of the Unix system and Novell's NetWare.

     That stands in contrast to the versions of Windows designed for individual personal computers -largely Windows 95 and 98 -which are still overwhelmingly dominant with about 85 percent of the market.

     Linux was first created in 1991 by then-university student Linus Torvalds, who still shepherds Linux development today.

     Linux’s main strengths are flexibility and reliability. Users can pick and choose the pieces of the operating system that they want to use, customizing it for a wide variety of computing purposes.

     Linux users can make changes directly to its source code, meaning that bugs and crashes crop up less frequently.

     Windows, however, finds strength in the fact that so many people know how to use it and troubleshoot it. In addition, more software applications -which perform specific tasks like accounting and word processing -are written to be run on Windows than any other operating system, ensuring that customers have a wide base of business programs to choose from.

     Over the past year, however, software developers have started writing more applications to work with Linux, as major computing companies like Intel, IBM and Dell have expressed interest in the system, said Tony Piccardi, an analyst for IDC.

     "Linux has gained some credibility by getting some applications out there and proving that it works in the real world," Piccardi said. "The delays in Windows 2000 gave them the time to do that."

     Linux proponents say the interest in the system goes deeper than a simple delay in the Windows upgrade.

     "What people are missing is that Microsoft's software is proprietary, and because of that, it's inherently inflexible," said Bob Young, chairman and co-founder of Red Hat Software, which markets Linux. "We're giving customers proprietary control of the product, and working with them to tailor it directly to their needs."

     Microsoft doesn't necessarily need to worry about its bottom line, however. Because the Linux software is available for free via the Internet, companies that provide it must make their profits by offering additional programs and services such as installation help and tech support.

     This market remains relatively small. Red Hat, the biggest Linux vendor, had just $11 million in revenue in the fiscal year ending February 1999, while the total annual market for business operating systems is about $9 billion.

     Prices for Windows 2000 start at $149 for an individual workstation, which is a souped up personal computer. Versions for server computers that run networks start at $599. Prices are higher for larger networks.

     A Linux installation will almost always be cheaper. And that, Linux supporters believe, will make it more attractive than anything Microsoft can produce.

     "Of course, given that we aren't even a true software company as it's been defined, and we come with a unique set of values for the customer, it's only a matter of time before the world comes knocking at our door," said Red Hat's Young.

 

Windows 2000 Introduction No Rival to '95 Software Debut
Computers: Microsoft hopes complex server program will win office market share, but it's not exactly a consumer product.

By JOSEPH MENN, MICHAEL A. HILTZIK, Times Staff Writers

     SAN FRANCISCO--In its biggest and most important launch of a product since the explosive introduction of Windows 95 five years ago, Microsoft today is unveiling Windows 2000, an enormously complex program the company hopes will help solidify its position in an increasingly competitive marketplace.
     The long-awaited program has been more than three years in the making and cost an estimated $1 billion in development costs. The program itself is one of the largest works of software ever commercially marketed, amounting to as many as 40 million lines of "code," or instructions written in computer language.
     But its introduction has been nothing to rival the full-scale circus that accompanied the launch of Windows 95, a dramatically improved consumer product that had buyers lining up at computer shops at midnight on launch day to be the first owners on their blocks.
     This launch has been timed to coincide with a three-day Windows 2000 conference in San Francisco, but the attendees are almost exclusively business and computing professionals. By contrast, Windows 95 was born amid a clamorous commercial promotion, including a television ad campaign set to the Rolling Stones' hit "Start Me Up."
     That's because Windows 2000, an upgrade of the Windows NT operating system, is aimed at business and professional users, especially those who manage servers--computers that run networks of other computers or supervise traffic in and out of Internet sites.
     Microsoft's share of that market is not in the same league as its 87% share of consumer PC operating systems. One reason is that among its rivals is a fast-growing and essentially free system known as Linux. For that and other reasons, Windows 2000's market penetration is expected to be gradual.
     "Over a three-year life span, they're going to sell a lot of copies" of Windows 2000, said Michael Gartenberg, vice president of Gartner Group, a technology consulting firm. "But they're going to have to fight every battle that comes along. They will not be dominant."
     Windows NT has about 38% of the 5.4 million server operating systems that aren't free like Linux, according to market researcher International Data Co. But its share of the revenue generated by server systems is only 30%, IDC analyst Dan Kusnetzky said.
     The reason is companies such as Sun Microsystems, Hewlett-Packard and IBM dominate the market for truly large-scale server software, in which fewer systems are sold but the price of each one is enormous, costing $100,000 or more. Those companies sell server programs based on the Unix operating system, a standard that is considered more reliable than Windows when running on large networks.
     That hints at the obstacles and risks Microsoft faces in even trying to move into this market. The company's consumer marketing plan has always been to sell large numbers of programs relatively cheaply--and then sell existing users nearly annual upgrades.
     That won't wash in the corporate market, in which buyers expect programs to remain serviceable for many years.
     Corporate buyers of high-end programs also have far more exacting standards for program reliability and technical support than do ordinary consumers.
     "They're trying to move into a corporate computer room they haven't been in before," Kusnetzky said, "and different people with different standards are making the buying decisions. If Windows 2000 has a failure anywhere, the news will be all over the planet in minutes."
     The expected slow conversion rate is bad news for Microsoft, whose shares have slumped 8% in the last four days. In recent weeks, Microsoft stock has pulled back 18% from its mid-December record high of $119.13. It fell 94 cents to close at $97.63 on Wednesday, the lowest since Dec. 13.
     It may also be bad for Dell Computer and Compaq Computer, the world's biggest personal computer sellers. Compaq Chief Executive Michael Capellas said last month that Windows 2000 is Compaq's top priority for the year and that the company has trained 1,000 technicians to handle customer questions.
     And Dell Chairman and CEO Michael Dell said last week that he didn't expect Windows 2000 to have a dramatic effect on sales at his company, the biggest PC maker.
     "The short-term impact [on computer makers] will be very minimal," U.S. Bancorp Piper Jaffray analyst Ashok Kumar said. "We're not seeing any change in the replacement rate."
     The introduction of Windows 2000 comes at a critical moment for Microsoft, which faces unprecedented challenges to its long-term domination of consumer and business computing at several levels.
     For one thing, computing applications formerly available only on desktop and laptop computers can today be bundled in a new generation of hand-held portable devices, including wireless phones, pagers, and information appliances such as the Palm. Microsoft's operating system for such devices, a stripped-down version of Windows known as CE, has failed to win a leading share of the market.
     In the server market, the company faces a growing challenge from the Linux operating system, which has been developed communally and is thus not under the control of a single corporate owner.
     Linux is especially useful for Web servers, or computers that control Web pages and Internet applications. Another attraction is its price; Microsoft will charge some businesses about $200 per computer, or as much as $4,000 per server, to install Windows 2000. And one of Linux's traditional drawbacks, the lack of applications such as word processors written to run on the system, is fading as major application developers begin to produce Linux-based programs.
     But Microsoft's real Achilles' heel in the professional market has been the doubt that Windows NT is sufficiently reliable when running sizable computer networks--that is, that it will not cease working when burdened by a heavy computing load.
     Another issue has been NT's "scalability"--that is, the ease of adding computers or processors to an NT-based system when needed. That's particularly crucial in e-commerce, for which companies often have to pump up the size of their computing systems to accommodate surges of business.
     "For the most part, we found 2000 to be more reliable" than NT, said John Taschek, director of PC Magazine Laboratories, which has done extensive testing on interim versions of 2000. "But that's not the case in every instance."
     He also noted that because of 2000's complexity--and the almost infinite variety of specialized software that businesses run on their systems--the real-world performance of the program is impossible to assess in advance.
     "In corporate settings, big, small and medium companies all have custom-made code, and that's going to be problematic," he said.
     Some critics have also suggested that Windows 2000 is riddled with bugs. Microsoft contends that most are minor and others will be fixed quickly.
     Asked this week whether Windows 2000 has more bugs than its predecessors, Michael Dell dodged the question, saying only that his company's ability to find such problems has improved in the last several years.
     For now, many business users say they will wait before spending thousands of dollars to switch their systems to the new program.
     "I haven't seen anything exciting about it," said John Stuart, Information Technology Manager at a Petaluma, Calif., travel company, who experimented with advance versions.
     Stuart attended the San Francisco Windows 2000 conference, but many of his peers stayed home. Organizer IDG World Expo said it was expecting 20,000 people--fewer than attended IDG's Linux conference in New York earlier this month. In many areas of the show floor, exhibitors outnumbered non-exhibitors.
     Others, however, said Windows 2000 is a distinct improvement on its predecessor, NT.
     "The performance is considerably better than what we anticipated," said John Bolz, a technology executive at San Francisco-based Wells Fargo Co., which received a discount in exchange for helping Microsoft develop the code.
     But Microsoft programmers gave up a lot to make Windows 2000 more stable, including speed and interactions with other software.
     "It's so reliable, it doesn't take any chances," balking at running many older programs and games and at supporting digital cameras and other recently developed hardware, said Andy Rathbone, co-author of "Windows 2000 Professional for Dummies."
     It probably will take six to nine months for Microsoft to fix the most important bugs, and buyers such as Michael Obando, of Sausalito, Calif., consulting firm Zen Systems Inc., said they won't even consider upgrading before then.
     "Before I deploy it, I've got to be 95% or 98% sure it isn't going to impact what we have," Obando said.

Microsoft Asks Congress to Oppose Any Breakup
Antitrust: The appeal comes as talks to settle the case out of court fail to produce an agreement.

By JAMES ROWLEY, Bloomberg News

     WASHINGTON--Microsoft Corp. appealed to Congress to oppose a breakup of the company as talks to settle the government's landmark antitrust case against the software giant have failed so far to produce an agreement.
     Breaking up the company would be "the equivalent of a regulatory death sentence," Microsoft said in a Feb. 9 e-mail to members of Congress. The company "is serious about trying to settle this case, and we believe a common-sense settlement should be possible," Microsoft lobbyist Kerry Knott wrote.
     Knott, former chief of staff to House GOP leader Dick Armey of Texas, sent the letter to lawmakers as the case against Microsoft hits a crucial stage. The company and the government will argue Tuesday before U.S. District Judge Thomas Penfield Jackson on whether the company broke the law.
     Microsoft won support for its position from Sen. Robert Torricelli (D-N.J.), who has mailed a letter to Atty. Gen. Janet Reno and Microsoft President Steve Ballmer opposing a breakup of the company.
     "It is critically important for both sides to avoid extreme positions, such as proposals to break up the company, and instead work for a balanced settlement," wrote Torricelli, who chairs the Democratic Senatorial Campaign Committee.
     Microsoft, a heavy contributor to national party committees, gave at least $50,250 in soft money to the Torricelli-led DSCC last year and $90,000 during the 1997-98 election cycle, according to the Center for Responsive Politics. Overall, Microsoft had given $417,350 in soft money--$316,000 of that to Republicans--during the first three quarters of 1999, the center said.
     Talks with a mediator appointed by Jackson have failed to produce an out-of-court settlement and prospects remain dim, people familiar with the discussions said.
     News of Microsoft's appeal to Congress, reported in Wednesday's Wall Street Journal, had little impact on the company's shares. They closed off 94 cents at $97.63 on the Nasdaq Stock Exchange.
     Microsoft's e-mail "indicates to me they are going to try to resolve this by political means [rather] than through negotiation," said Stephen Houck, former trial counsel for the 19 states that joined the U.S. Justice Department in suing Microsoft. Houck is a partner at Reboul, MacMurray, Hewitt, Maynard & Kristol in New York.
     "We are always happy and interested in reaching a fair and reasonable settlement that addresses the concerns of the government," Microsoft spokesman Jim Cullinan said Wednesday.
     Antitrust enforcers were emboldened by Jackson's findings on Nov. 5 that Microsoft had a monopoly over personal computer operating software and repeatedly quashed competition to preserve its market domination. After the findings, government lawyers said they would consider proposals to break up the company.
     In meetings with mediator Richard Posner, chief judge of the U.S. 7th Circuit Court of Appeals, antitrust enforcers have proposed breaking the company into two units, people familiar with the discussions said.
     Microsoft's e-mail elicited statements from leading lawmakers urging both sides to reach an out-of-court settlement.
     "Both consumers and the industry would benefit from a fair resolution of this case," said Senate Democratic leader Tom Daschle. "The current mediation provides both parties a unique opportunity to resolve this dispute in a way that strikes a balance between the importance of our antitrust laws and innovation."
     That opportunity, however, may be slipping away, Houck said, if Jackson rules--as many legal experts expect--that the company violated antitrust laws. Such a ruling would lead to hearings on imposing remedies to prevent recurrence of business practices the government alleges were intended to protect Microsoft's domination of Windows operating software.