Microsoft bats bugs with Win 2000 update

Summary:Microsoft has quietly posted Service Pack 2 appeared to modestly boost system performance, while adding several new features.

Microsoft has quietly posted a second collection of Windows 2000 bug fixes, indicating the official release of an update could come this week.

The Redmond, Wash.-based software company in July released the first Windows 2000 bug fix--or service pack--in a similar manner the weekend before the official announcement of the update. Microsoft representatives were unavailable for comment.

CNET News.com early Sunday downloaded the 101MB file from a Microsoft Web site. The service pack installed without incident on a MicronPC TransPort GX+ Plus notebook with an 850MHz Pentium III processor and 256MB of RAM. Overall, Windows 2000 Service Pack 2 appeared to modestly boost system performance, while adding several new features.

New features included in the update, which will most likely be labled Windows 2000 Service Pack 2, enhanced security and--borrowing from the forthcoming Windows XP--compatibility with older software applications. The latter could be important to spurring Windows 2000 sales.

One of the biggest changes introduced by the service pack affects security. Until now, Windows 2000 offered 56-bit encryption by default, forcing people who wanted tighter security to either install higher encryption from a separate CD or download via Windows Update. This meant some companies could be unaware that their Windows 2000 installations included relatively poor security.

Service Pack 2 offers 128-bit encryption by default, and it updates 56-bit Windows 2000 versions as necessary.

Another new feature comes from Windows XP: Windows Compatibility Mode. In a recent interview, Shawn Sanford, Microsoft's group product manager for Windows, described Compatibility Mode as a "series of tweaks and tricks" that "fool" older programs into running on Windows 2000.

Problems getting older versions of software, particularly those designed for Windows 95 or 98, to run on Windows 2000 have contributed to slow sales, analysts have said. Market researcher Gartner has predicted that one in four companies will face serious problems migrating to Windows 2000 through 2003. One major reason for that prediction is spotty compatibility with older programs, particularly those developed internally by companies.

But unlike Windows XP, Windows 2000 with Service Pack 2--the most recent update posted this weekend--delivers compatibility modes only for Windows 95 and NT 4. That means programs written for other versions of Windows might not function under Windows 2000. Windows XP, in contrast, offers support for other versions of Windows, such as Windows Me.

The introduction of Service Pack 1 in July was expected to compel companies to buy and install Windows 2000, which it did not. Gartner forecast in February 2000 that as many as 20 percent of Windows 95, 98 and NT desktops would be converted to the newer version by the end of the year. In fact, less than 10 percent were upgraded, Gartner reported.

If Service Pack 2 eases some of the compatibility issues, it could make the switch easier for companies struggling with their Windows 2000 migration plans.

Though hype is building around successor Windows XP, 2000 is the version most businesses are looking to install right now. Windows XP's Oct. 25 launch is still about half a year away, making Windows 2000 the preferred choice for businesses, analysts say.

At the end of last year, IDC concluded that Windows 2000 accounted for 40 percent of combined Windows NT and 2000 shipments. That number is expected to climb to 72 percent by the end of 2001.

Windows 2000 shipments also have been hampered by the slow economy and potential competition from the upcoming launch of Windows XP.

"Windows 2000 is hurting because PC sales are hurting," said IDC analyst Roger Kay. In fact, IDC reported that PC sales plummeted 9.5 percent in the first quarter from a year earlier. Still, Kay remained hopeful of a rebound in business PC sales during the second half of the year.

Although Windows 2000 was not the runaway success analysts had expected, the product managed to boost Microsoft's desktop operating system revenue growth to 14 percent in fiscal 2001 from 4 percent in 2000, Merrill Lynch analyst Henry Blodget wrote in a recent report. Microsoft's 2001 fiscal year ends June 30.

Service Pack 2 could help revitalize Windows 2000 sales as Microsoft enters its fiscal year 2002 at the beginning of July.

Still, Gartner recommends that companies that have not started Windows 2000 upgrades by the second half should wait for Windows XP instead.

"I know of companies that have already canceled Windows 2000 plans because of Windows XP," said Gartner analyst Michael Silver.

Topics: Windows, Microsoft, Operating Systems, Software

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