Y2k May Stall Windows 2000 rollout

A growing number of analysts are warning users not to expect delivery of Windows 2000 before the middle of next year.

That's at least six months after the delivery date pinpointed last week by Ed Muth, Microsoft Corp.'s group product manager for Windows NT. And the delivery date Muth targeted in his statement -- which came on the heels of a confirmed one-month delay in the release of the third beta of the updated operating system -- is later than what Microsoft had predicted. In a statement last year, it pegged mid-1999 for the final release of Windows 2000.

Aside from any Microsoft

issues, the major culprit behind analysts' prediction of a delay is the year 2000 problem and related system freezes that are expected to go into effect in the second and third quarters at many user companies.

"Based on Microsoft's history and the events coming up this year, like Y2K, I don't see them coming out with Windows 2000 this year," said Rob Enderle, a vice president at Giga Information Group Inc. in Cambridge, Massachusetts. "Windows 95 and 98 were both midyear releases. I don't see a difference in the timing of Windows 2000, and there's a lot more going on this year than ever before -- Microsoft's developers may have to deal with emergency Y2K situations. And don't forget that this is the most complex product they've ever come out with."

Michael Silver, an analyst at Gartner Group Inc., said he too isn't expecting a release until well into the first half of 2000. And he's telling clients not to deploy the operating system until the first service pack is released, so that may push any deployment possibilities back another six months. The reason may be that many users say they have no intention of buying Windows 2000 until they have gotten through the year 2000.

"Is it going to have an impact on us? None whatsoever," said Jeff Miller, senior enterprise network engineer at the Chicago Mercantile Exchange. "We've already locked our doors because of Y2K. I'm not bringing anything that big in here until we get through that."

"This is a highly complex system," said Mike Riley, director of Internet application development at R. R. Donnelley & Sons Co. in Downers Grove, Illinois. "We can't bring this in unless we're completely ready, and I've got to see what Y2K brings us."

And while Microsoft says NT 4.0 is a good option for users who need NT but are waiting for Windows 2000 (previously called NT 5.0), industry watchers said locked corporate doors may bar sales of that as well.

And there are other ripple effects, Enderle said. Microsoft could face "a fairly significant problem in terms of revenue" next year. "Our customers, which are Fortune 1,000 and Fortune 500, are not going to move to Office 2000 until they get Windows 2000. The same will probably go for the BackOffice suite, too ... I have a hard time seeing Microsoft having anywhere near the growth they've had in the last few years," he said.

Microsoft last week reported net income of $1.98 billion for the quarter ended Dec. 31, a 74 percent increase over the same quarter in 1997. Revenue for the quarter totaled $4.94 billion, a 38 percent increase from a year earlier.

Windows NT sales last year rose to 1.56 million licenses, up from 1.22 million in 1997, according to International Data Corp.

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