Commentary: Moving on from Windows 98

Windows XP is a major upgrade from Windows 98 in the home market, providing improved stability, increased performance and a series of extras designed to help home and small-business users more easily manage their Web use, Web pages and, eventually, .Net services.

It will appeal to consumers with its enhanced features for accessing rich media, plus its attractive "toys" such as tools for video editing and CD burning.

Under the covers, Windows XP is the final step in merging the two separate Windows lines that Microsoft was forced to create a decade ago. Essentially, it is a consumer-friendly version of the Windows 2000 code base, which marked a move to a unified 32-bit environment on the corporate desktop and thus the start of that merger. Now, the stability and maturity of Windows NT is being extended to home and small-business desktops.

Microsoft is preparing a media blitz for the retail release of Windows XP--planned for October--that will rival the launch of Windows 95. Microsoft and the PC makers hope that this will contribute to a major revival of the consumer PC market in the Christmas buying season.

We expect some upturn in PC sales driven by Windows XP and rock-bottom prices, but not the huge volumes that Microsoft and PC makers are hoping for. Much will depend on the mood of consumers. If they are still concerned about the economy, they will be slow to make major purchases, regardless of pricing. If there is any uptick in consumers' confidence, they will be more likely to buy new PCs.

Windows XP includes several new facilities designed to improve users' experiences on the Web and office networks. For instance, the Web Digital Authoring and Versioning (WebDAV) technology is designed to facilitate finding, retrieving and manipulating files on the Web or intranet. Windows XP also contains a NetCrawler agent that automatically locates and installs printers on the Web or office network when a user connects a laptop to the network.

While these new features are not by themselves compelling reasons to upgrade, they do provide incremental improvements, especially for consumer PC users. These new features are also intended, in part, to facilitate use of .Net services when they begin to appear.

What businesses need to know
Windows XP has some attractive features for office users, although it does not represent a compelling upgrade for enterprises that have already moved to Windows 2000. For example, the operating system contains a standard 802.11 wireless networking stack, which makes accessing multiple networks easier and eliminates the need for third-party administrative tools to manage the connections, and a new remote desktop tool that enables support staff to remotely take over a PC to diagnose a problem. Companies, however, need to carefully control use of this feature to avoid security exposures.

One tactic Microsoft will be using to promote Windows XP, particularly in the corporate market, is to tie it to the company's.Net initiative for Web services. However, while the new software has features that complement .Net, the linkage is mostly marketing. Future versions beyond the current Windows 2000 and XP desktops will offer more concrete facilities to link the desktop to these Web services. Windows XP is not a necessary step toward .Net, and users can skip this particular version without compromising their ability to exploit .Net.

We believe that home and small-business users still running their PCs on Windows 98 should consider upgrading to XP, either by installing the US$99 upgrade on their existing hardware or by buying a new XP-based machine. For an optimal home experience, a relatively new machine with 256MB of RAM should be preferred to make use of all the new features. Users currently in the market for a new PC should, if possible, delay their purchase until mid-October, when the new XP machines should be plentiful. We expect pricing on those new machines to be very favorable by that time.

Companies that have not yet started upgrading to Windows 2000 should move directly to XP instead and consider it the latest Windows release once they have completed appropriate testing and certification. Companies that have already upgraded or are in the process of upgrading their desktops to Windows 2000 will probably have no compelling reason to do a second, unplanned upgrade to XP. However, they should consider switching new purchases of desktops and laptops to Windows XP Professional by the third quarter of 2002 to ensure access to the latest drivers and updates for those systems.

We do not believe a mixed Windows 2000/Windows XP environment, if managed carefully, will place any significant burden on IT groups. The newer version can be set up to look exactly like Windows 2000, and the two operating systems can coexist well on corporate desktops. In effect, enterprises should treat Windows XP as the next service pack for Windows 2000.

Meta Group analysts William Zachmann, Steve Kleynhans, Dale Kutnick, David Cearley and Val Sribar contributed to this article.

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