Wednesday, February 16, 2000
Home Edition
Section: Business
Page: C-6
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
|
Saturday, February 12, 2000 Microsoft Stock Stung
by Windows 2000 Criticism
By: MICHAEL J. MARTINEZ
Michael Gartenberg, vice president of the Stamford,
Conn.-based Gartner Group, said one in four companies will have problems getting Windows 2000
to work with existing programs and systems. The latest version of
Microsoft's business operating system, designed to replace Windows NT 4.0, is
to debut next week. "That kind of rate is to be expected,
however," Gartenberg said late Friday. "People who take the time to
prepare for those kinds of problems will be fine. But people who just jump
out of the plane and pull the rip cord without double-checking everything may
have a problem." Also raising investor concerns were comments made
late Thursday by Michael Dell, CEO of Dell Computer Inc., in a discussion of
his company's earnings report. Dell said that the corporate adoption
of Windows 2000 will likely be slow and that the rival Linux operating system
is gaining ground. "We don't see a massive, immediate
acceleration due to Windows 2000," Dell said in a conference call. The combination of news sent Microsoft shares
tumbling, down $6.06 to $99.94 in heavy Nasdaq trading. Gartenberg said he was surprised by the market
reaction to his comments, since the Gartner Group had made similar statements in the past.
"I think as the launch [of Windows 2000] gets
closer, people are obviously taking a closer look at this," Gartenberg
said. "I think that may have something to do with the reaction." The Gartner Group is one of the top technology consulting firms in the
industry. It talks with computer system administrators throughout the
business world, as well as with Microsoft engineers and competitors, to come
up with its analysis. Gartner Group has predicted that 15% to 20% of
Microsoft's business customers will move their computer systems from Windows NT 4.0 to the new Windows 2000
system by the end of the
year. Gartenberg added that up to 45% of Microsoft customers would
make the move by the end of 2001. "That's not a bad migration pattern for any
new software," he said. Microsoft has said that it expects its revenue to
reflect the new operating system starting in the third quarter of the year
and growing into the fourth quarter. Microsoft's fiscal year ends Sept. 30. Microsoft
had no immediate response to Gartenberg's comments.
Credit Suisse First Boston analyst Michael
Kwatinetz said an immediate rush to Windows 2000 was not to be expected. He focused instead on Dell's
positive remarks about the alternative Linux operating system, saying those comments could be more significant. "He [Dell] gives the feeling that there are some other new operating
systems that are
going to pose a challenge to Microsoft," he told Reuters. Warburg analyst Charles Wolf agreed that positive comments about
Linux could steal Microsoft's momentum. "The Linux comments are obviously a negative,"
he said. "A lot of the 'dot-com' small companies are jumping on it
because it's cheap and works. Let's not
say it is the next coming, but it is a negative to Microsoft in that it takes
away from its ability to take share in the small-business space." Reuters was used in compiling this report. |
Securities:
Shares drop 6% after analyst predicts one in four business users may have
problems with new software.
Windows Delays Give
Linux a Chance
SEATTLE
"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.
SAN FRANCISCO
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."
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.
WASHINGTON
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.