Execs downplay impact of Win98 delay

The attorneys general from about a dozen states are expected to file a joint action against the company -- perhaps as early as next week -- in a bid to block shipment of Windows 98. Sources say the states are anxious to investigate Microsoft's alleged anti-competitive practices.

But computer industry officials were surprisingly sanguine about what might happen should the states or the Justice Department convince the courts to delay the June 25 release of the operating system upgrade.

"I suspect there would be some ripple effect, but I don't know how big a deal it would be," said Russ Siegelman, a partner with Kleiner, Perkins, Caufield & Byers, a Silicon Valley venture capital firm. "Unlike Win 95, I am not sure how many [software developers] are betting the farm on a quick and massive Win 98 upgrade phenomenon."

Although software developers time release schedules to major operating system releases, independent software vendors (ISVs) burned by Microsoft's repeated failure to ship Windows 95 on time are less likely to make the same mistake this time around.

"I think ISVs are probably more savvy, because some did have hiccups because of scheduling slips for Win 95," said Siegelman, who used to head up Microsoft's online service.

A spokesman for Microsoft said the company has been working very closely with state and federal authorities to answer their questions.

Unlike the introduction of Windows 95, which was a major improvement over the earlier incarnations of the operating system, the pending release of Windows 98 has so far failed to excite the public's imagination. Not coincidentally, the countdown to Windows 95 was accompanied by a drumbeat of publicity orchestrated by Microsoft.

"People are looking forward to it, but you just don't see the pent-up excitement that surrounded Win95," said Craig Conrad, the marketing director at Nexar, a computer maker in Southboro, Mass. "If it slips, it slips. Customers are starting to put together plans for upgrading but if that doesn't happen, it's not the end of the world."

Some peripherals makers could get hit in the event of a delay in the introduction of Windows 98, which includes built-in USB support. USB refers to a class of connector devices that are designed to make it easier to link computers to peripheral devices.

That in turn might cut into sales of new computers as PC shoppers postpone their purchases until the smoke clears. But computer makers and PC resellers are nonetheless confident that the issue will be resolved long before they need to start shipping inventory for the back-to-school season in the fall.

But in addition to the familiar faces in Microsoft's amen corner, many industry executives said they were uncomfortable at the prospect of software development being tempered by state or federal authorities.

"It's not an issue of the industry -- it's an issue of customers and improving the quality of their computing environment," said Sheldon Laube, the chief technology officer at U.S. Web. "This would be a very big precedent and I think it would be a very disturbing trend where we're using law enforcement to decide when to ship products.

"I run Win98 and it's better than Win95," he continued. "We're not just talking about support for USB. It's a better product and I want to run this on all of our computers as soon as possible. To me, this is not issue of what Microsoft ships. The point is who gets to choose when, I as a customer, get to use it."