Getting Ready for MS Windows XP

Last week at PC Expo in New York, Microsoft was proudly showing off the next version of the Windows operating system. Windows XP, which is scheduled for formal announcement on October 25th, is currently in Beta and, according to the Microsoft folks at PC Expo should be at or nearing its first Release Candidate this week. That means things are pretty much on schedule for the October launch. We suspect that's the only thing about Windows XP which is going to be predictable.

First, the good news. The interface for the newest version of Windows is elegant and aesthetically pleasing. More to the point, it's a lot easier to use. If you're using Microsoft's new Office XP software, you'll be expecting the in-context, dialogue-based help, but you may be surprised by some of the other features.

PRO: WINDOWS XP HAS LOTS OF GREAT NEW FEATURES

*Windows XP Features*
*Feature*	Home Edition	*Professional Edition*	64-Bit Edition
New Visual Design	X	X	X
Multi Media Tools · Digital Photo · Digital Music · Digital Videos Create; Download; Store; Share	X	X	X
Computer Sharing and Home Networking	X	X	X
Built-in Tools and Expert Help
Enhanced Reliability
Enhanced Security · Encrypt Files, Folders		X	X
Mobile Support		X	X
Multiprocessor System Support		X	X
Compatibility with Microsoft Servers, Mgt. Solutions		X	X
MultiLanguage Support		X	X
Enhanced Performance and Scalability for Technical Tasks			X
Based on Intel Itanium			X
Enhanced Digital Content Creation			X
Enhanced Computer-Aided Mechanical Design and Analysis			X
Enhanced Financial and Data Analysis			X

Generally speaking the emphasis for the release is on three themes:

(1)   Enhanced ease of use through improvements in the interface.

(2)   Enhanced reliability. This is the first version of Windows which uses the same software architecture as NT. Microsoft assures users this means more reliability in every version. Beta testers report this is generally true although, as you might expect, there are still bugs in the pre-release Beta software early users are trying.

(3)   New and enhanced features. These vary depending on the target audience. Features for home users emphasize multi-media support for photographs, voice, and video. Professional systems emphasize performance, scalability, and support for high-end applications. Both offer more emphasis on enhanced help, better integration within and across applications (for both Microsoft and partners) and enhanced access and integration with new Microsoft application features such as the Smart Tags in Office XP.

QUESTION: ISN'T PRODUCT SUCCESS ALWAYS AT LEAST PARTLY ABOUT TIMING?

All of that sounds very appealing, but is it compelling? In a slow year for computer hardware and software vendors, the question is what will the customers buy and when will they buy it? That's a complicated question with a very complicated answer.

CON: USERS MAY NOT BE IN A BUYING MOOD IN OCTOBER

Starting in late October, it will not be possible to buy an Intel desktop machine through normal channels with anything OTHER than Windows XP without a great deal of trouble. We'd assume, for instance, that corporate buyers who have standardized on another version, e.g., Windows 2000, and are buying it under a corporate license, will be able to arrange to continue to order machines this way -- or they could simply take the rough and ready path of ordering them "bare" and loading the software themselves. This, however, seems unlikely; prices, even volume prices, are usually calculated to include appropriate Windows operating systems and few customers want to bother loading initial software (without which, of course, the machine hardware can't be adequately tested, which is part of the hardware vendor or distribution channel's job).

We suspect that many users who are using Windows 2000, especially in corporate environments where moving users in scheduled groups is the pattern, will not be in a rush to move to Windows XP. There are differences between the operating systems (click here for a comparison chart that shows various versions of Windows compared -- Windows 2000 and Windows XP are the last two columns), but they are relatively small. You will hear the usual comments and excuses, plus a few new ones:

-- We'll wait until after it settles down, after the first service patch release.

-- It takes us at least a year to schedule a big changeover like this.

-- Money is tight right now; we're waiting until next year's budget.

-- We've changed our mind about the need to upgrade PC's so often (meaning hardware, but, of course, incorporating software that depends on more robust hardware). We've found that most people are using them for email and web access and what we've got is fine for that.

-- Did you hear that brouhaha over Smart Tags in Windows XP all over the Internet? We think we'll wait until we see just what's in the final product. We don't want our users employing a function that ends up in the middle of all kinds of law suits.

CONCLUSIONS

There are no foolproof ways to make perfect predictions about buyers and markets (surely the Internet DotCom bubble proved that to you); only fools who make one-sided predictions. We won't do that.

Windows XP Will See Limited Success in 2001

We suspect that unless the economy suddenly slows down quite a bit more (possible) or picks up quite a bit (possible, but not likely -- those tax refunds, for example, have historically not had strong short-term effects), Windows XP will be neither a failure nor a huge success this year. Some people -- mainly those who have to buy new computers and aren't in big corporate environments committed to continuing prior standards for a while -- will buy XP. Upgrading is likely to be a lot sparser than Microsoft would like. This isn't a year when corporate buyers are going to feel compelled to do automatic upgrading, especially upgrading that requires hardware purchases. Consumers may be more cautious with their pocketbooks this fall, worried about their floundering retirement portfolios and the layoff/unemployment rate picture, to say nothing of gloomy state governments noticing that their surpluses are fast disappearing and looking for new revenue sources.

Note that this has grave implications for lots of different but related folks -- hardware manufacturers of components, peripherals, and PCs, ISVs who've rushed to offer a Windows XP version of their software, hoping for the upgrade business, and the distribution channel that makes its living selling, delivering and participating in the implementation of all this. All of them are counting on Microsoft doing well with Windows XP and passing those market effects along down (or up) the chain. This means all of them will be ready with marketing dollars and other resources. This will make it harder to avoid the issue because lots of folks will be urging you to migrate NOW. Presumably, many of them will offer suitable inducements (reduced prices, for example) that may change the equation for some buyers.

There are More Options Now

Customers -- both corporate and consumer -- are spending far more of their computing time within a browser than ever before. This makes them believe that they are less operating system dependent and less willing (or interested) in being driven by desktop operating system upgrades. A customer can use an older PC or even a non-Windows device equipped with a browser and still have a good Internet-based experience. For many, that may be enough. Microsoft, of course, is very much aware of the lure of the online world. We expect them to engage users by building significant user experience features and advantages into future versions of their Internet Explorer browser, distributed via future versions of the Operating System and perhaps Office. That could be enough, in the mid-term, to insure substantial Windows XP buy-in. Assuming, of course, the features are compelling to users and Microsoft's next round in court doesn't damage its ability to integrate IE with the operating system (we do not believe this is likely).

There is also, of course, the desktop Linux card and the non-PC device card (which might be a Linux or non-Microsoft OS card). Both are already being played, but we wouldn't expect them to be played in sufficient numbers in the next year to affect Microsoft's sales of Windows XP. They will be factors in the longer term.

The Long Run (2003 and Out) is Murkier

It's much harder to get a real sense of what will happen further out. We suspect that Microsoft will continue to control a significant majority of user desktops in both the consumer and business markets. But the web and new browser and other interfaces will play an increasingly important role. Microsoft, of course, through its DotNET and other initiatives hope to be a significant player here, too, and it may be. But market breaks allow new players to enter markets and the next Apple or AOL may be gearing up right now. That's what keeps me prowling trade show floors and taking my 15th briefing of the week by web conference -- hoping to spot the future now.