Network: The cracks in Bill's Windows

Microsoft will launch its new operating system this week amid a sea of uncertainty.

THE MOST keenly anticipated event of the year for personal computer users is just around the corner. Yet next Thursday's launch of Windows 98, Microsoft's latest PC operating system, has failed to create quite the excitement of earlier releases.

This is partly because of the shadow that hangs over Bill Gates's company in the form of a federal anti-trust case, currently making its way through the machinery of the US government. But it also reflects broader uncertainties about the Windows platform and about Microsoft's future. While its dominance is unassailed and, the US Department of Justice (DOJ) aside, virtually unassailable, these uncertainties point to problems down the road for the software behemoth.

Windows 98 is a step up, but only a step, from Windows 95. It is not a revolution and Microsoft is not touting it as one, unlike Windows 95 three years ago. Reviewers have praised its speed of set-up and shut-down, and its ability to handle new hardware and multimedia. It will fix a lot of the glitches in Windows 95, and some people will find it more convenient to buy Windows 98 than spend time fiddling with Windows 95.

Of course, the central point about Windows 98 is the tighter integration of the Internet Explorer browser, but since that is the main bone of contention between Microsoft and the DOJ, it's a little tricky to trumpet it.

Dataquest, the market information company, predicts that Windows 98 will lead the operating system market this year, with 56.7 million unit shipments - about half the total world-wide sales of operating systems. But most will be sold with new PCs. Chris Le Tocq, of Dataquest, says he expects the interest in upgrades to be "modest to low", at around 5.5 million units.

Windows 98 is only one of the products that Microsoft had hoped to launch this year. It had expected to release an upgrade of Windows NT, its operating system for corporate networks. But the release of Windows NT 5 is still months away. Microsoft has sometimes seemed uncertain as to the target market for Windows 98, veering between suggesting that corporate users should switch to NT and advocating Windows 98 for everyone. "They're trying to sell it as all things to all people," says Jim Penhune of Yankee Group, an IT consulting firm.

The company, which seems such a monolith from outside, is fragmented within. "Inside the firm, it's like a bunch of privately held companies competing vigorously," says Rob Enderle of Giga Information Group, a computer consulting company. The Windows 98 team tussled with the NT team over marketing, but in the end Windows 98 seems to be pushed more at consumers than at the business market. That has led to confusion, Enderle says.

Windows 98 is, in many ways, a transitional episode.

"This is the last hurrah for the current architecture," Le Tocq says. "The business user transition from Windows 95 to NT ... is gradually emerging."

Microsoft has said that all its future operating systems will be based on NT, and its prospects will be vital for the company's continued dominance of the market. "Their real aim is building [market] share for NT," Penhune says. But Microsoft has yet to convince many businesses of the virtues of NT. Sun Microsystems, Oracle and other competitors will try to use the delayed release of NT 5 to weaken Microsoft's grip by developing their own products based on the Java programming language. And the same competition issues regarding the Internet Explorer browser refer to Windows NT. The DOJ has so far made its moves only on Windows 95 and 98, but action on NT could be just around the corner.

In the longer term, a shift towards network computing poses a strategic threat to Microsoft, but one that it is already engaged in. Some analysts believe that Java is a serious challenger, while others think it is massively overblown. It may be that the competitive advantage shifts towards the providers of networks, where applications reside on the server, but Microsoft has dodged its way through other innovations - such as the emergence of the Internet, which it almost botched - and few are ready to discount it now.

Above all, the competitors have signally failed so far to dent Microsoft's position of strength; Windows 98 is another small step towards cementing that.

Should you buy Windows 98?

Five reasons to buy it:

1) A number of new tools in Windows 98, such as a Maintenance Wizard, allow you to manage your system more efficiently.

2) The appearance of Windows 98 is so similar to its predecessor that you won't need to spend hours relearning the basics if you are an existing Windows 95 user. For first-timers, there is also a better tutorial.

3) Adding new hardware, such as scanners and sound cards, should be much simpler.

4) Gamers will benefit from features such as being able to attach more than one monitor at once to their PC.

5)If you are a keen Internet user, extra features that allow you to schedule downloads during the night could save time and reduce your telephone bill.

Five reasons not to buy it:

1) The upgrade cost of pounds 72.77 (excluding VAT) is steep for what amounts to a set of drivers and some utilities.

2) Apart from some improvement in software load times, you are unlikely to be able to work any faster, or more efficiently, with Windows 98 than you can with Windows 95.

3) If you are not interested in getting online, you will be pressing a lot of "Cancel" buttons - Internet tools are closely integrated into the front end.

4) Windows 98's help system seems to have taken a step backwards - finding "how to" information about tasks such as sending a fax is more time consuming using the redesigned help windows.

5) You will need more processor power, memory and hard disk space. Windows 98 requires 295Mb of disk space - more than a little greedy for a basic operating system. However, you can get away with as little as 120Mb, providing you choose your installation options wisely.

Maggie Williams

The writer is PC Magazine's usability editor