Analysts Like Windows Server’s Chances in Post-Ruling World

The Sun Microsystems Inc. and Red Hat sales teams undoubtedly sharpened their competitive knives. With Microsoft Corp. ( writhing from an antitrust remedy that would split the company in half, the time seems right to be selling any other server operating system.

In addition to the usual competitive criticisms concerning the stability of Windows NT Server, the code bloat, and lack of production testing of Windows 2000 Server, proponents of Unix and Linux operating systems can stir the pot of fear, uncertainty, and doubt brewing within IT administrators over any Microsoft product in advance of a government-mandated break up.

Now would be a good time to cut into Microsoft’s Windows NT/2000 Server market share, except it may be too late for the Unix/Linux vendors, some analysts say.

"So many people have indicated to us that their plans for future systems involve Windows NT and Windows 2000 that I have a suspicion that whatever the Justice Department does is not going to change that commitment," says analyst Dan Kusnetzky of IDC ( "They can’t change what people have, they can’t change people’s plans. What’s on the ground right now is people are using Windows NT increasingly for various types of systems they’re installing."

Late as Microsoft was in delivering Windows 2000, Redmond did beat the conclusion of the long-running anti-trust trial by four months.

Microsoft’s position in server market share faces difficult challenges from several directions related to the break-up plan, even if Microsoft wins its appeals and keeps the company together. Many of the problems involve confidence in one form or another. Microsoft executives must soothe their own employees’ nerves to keep them focused on improving the platform, maintain independent software developers’ interest in writing Windows applications, and convince IT administrators to continue buying Windows 2000 and the client and server products that surround it.

Putting a face on the reality of these problems, Microsoft recently lost high-profile executives Jim Allchin, to a leave rumored to be permanent, and Tod Nielsen. Anecdotal reports indicate hard-working Microsoft employees are actually using vacation days.

Rob Enderle, vice president at the Giga Information Group ( believes Microsoft is distracted by the case right now. On a recent performance report card, he gave most departments Ds or Fs. Lack of focus could cost Microsoft some momentum on Windows NT/2000 Server, he says, but probably only short term. "Once they’re together or broken up, we don’t think it has any real impact," Enderle says of the ruling’s effect on Microsoft’s market strength. "It’s this ‘tweener stage they’re in right now that we think is going to hurt sales."

One pillar of the government’s case has been that Microsoft gathers monopoly power from its integrated offerings. In the event of an applications company-operating system company split, Microsoft loses the association between Windows NT/2000 Server and the BackOffice Suite of server applications. True or not, the perception exists that Microsoft’s BackOffice server applications work better with Microsoft’s server operating system. That perception would evaporate were the operating systems company forced to collaborate as closely with all software companies as it did with the applications company derived from half of Microsoft.

The server platform could also suffer from losing the perceived synergies between the Windows client operating system and the Microsoft Office productivity suite to the extent that demand for Office drives demand for Windows desktops.

At the same time, the key association for Microsoft’s Windows server products would not be severed, even under a breakup. The prevalence of Windows desktops makes Windows servers the most supportable choice for many IT departments, and both client and server pieces of Windows would remain bundled in the operating systems company, even if a split went through.

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