Microsoft: The Mogul and the Marketeers

Windows 95 debut expected to spark boom in sales across the PC industry

It has the Rolling Stones singing. It has Apple Computer sweating. It has makers of personal-computer hardware and software scrambling. And it has Bill Gates, who heads the company that makes it, smiling. Windows 95 is here. The software from Microsoft Corporation goes on sale Aug. 24, after years of anticipation. As technology, the new version of Windows is little more than a belated catch-up to Apple's Macintosh software. But Windows 95 is less about technology than about industry leadership. As the dominant software platform - the ''plumbing'' that runs most computers now in use - the current version of Windows sets the standard for the desktop computer industry. Its successor, Windows 95, will likely further that dominance. In coming months, software companies will deluge the market-place with programs specially designed to run on the new platform. Hardware companies will offer bigger, more powerful machines capable of handling it. It all adds up to a likely financial bonanza for the personal-computer industry that already is booming. ''This is a watershed,'' says Tim Bajarin of Creative Strategies, a market-research firm in San Jose, Calif. Windows 95 could spawn several billion dollars in sales, analysts say. The current version of Windows is out of date. Since 1992, the last time Windows had a major upgrade, personal computers have changed dramatically. They've gotten less expensive and more powerful. They're increasingly linked to the Internet's global web of computers. And home-computer users, once a small proportion of sales, have emerged as a major force, snapping up CD-ROM disks and other programs studded with music and film clips. Windows 95 will push these trends even farther. ''The home PC phenomenon has just gotten started,'' says Mr. Gates, Microsoft's chief executive officer. Mr. Gates told reporters recently that he sees Windows 95 ushering in a third stage in the 20-year-old PC revolution. Phase 1, in the 1980s, revolved around simple, text-based applications and low-speed data communications over phone lines. Phase 2, in the early 1990s, saw the rise of CD-ROM disk players and faster communications, linking PCs to on-line services. In Phase 3, enabled by Windows 95, the door is open to even faster communications and more use of video, Gates says. It also means an easier environment for the user, where a CD-ROM player is easy to hook up (unlike today), and the compact disks automatically start when they're popped into the machine. And even though many users won't have to switch to the new platform right away, millions of home users will. ''This is a very important operating-system transition that has a tremendous positive impact in the industry,'' says Dean Kline, a spokesman for Dell Computer. The Austin, Texas, manufacturer has been taking advance orders for home computers preloaded with Windows 95 since the beginning of the month. ''We get to ride the Microsoft marketing machine,'' adds Matt High-Smith, vice president of software developer Attachmate. The bigger imponderable is whether - and how quickly - corporate customers will upgrade. Switching to Windows 95 will cost more than the $90 of the program. There's time spent installing the software and training. Added hardware horsepower may be needed. And some of the key benefits may come only by also buying software applications designed to take advantage of Windows 95 features. ''CEOs look at productivity per dollar'' invested, says Mark Macgillivray, managing director of H&M Consulting, a research firm in Sunnyvale, Calif. ''A lot of companies will upgrade,'' he says, but ''I don't think that the adoption rate is going to be as quick'' as some analysts have forecast. The Gartner Group, a Stamford, Conn., consulting firm, estimates the extra labor costs alone could approach $500 per upgraded computer user. Microsoft acknowledges that Windows 95 may disappoint some people because it has received so much publicity. ''At some point, the hype factor for Windows 95 got out of hand,'' says Brad Silverberg, a Microsoft senior vice president who oversees the product. ''It's not all things to all people.'' Yet the Redmond, Wash., company is hardly holding back on promotion. To whip up enthusiasm, a carnival-style rollout is planned for Aug. 24, with a speech by Gates beamed worldwide. The Rolling Stones' hard-driving hit ''Start Me Up'' will play a central role in a predicted $200-million-plus ad campaign. The song was selected to highlight Windows 95's ''start'' button, which Microsoft is playing up as the symbol of the program's accessibility. Apple, meanwhile, is running scared. It has an ad that mocks Windows 95's ''recycle bin,'' a knock-off of Apple's decade-old trash can for deleted files. While Windows 95 does little that hasn't been done before, some features move ahead of Apple's rival Macintosh software, analysts say. Though many industry players stand to gain if Windows 95 is a hit, some are casting a jealous eye at Microsoft. Last week a computer trade group asked a federal judge to expand a settlement Microsoft agreed to last year with the Justice Department. The trade group says the settlement should apply not only to Windows but also to Windows NT, Microsoft's high-end platform. Monday, a federal judge refused to entertain that motion, but, as expected, approved the 1994 Justice Department antitrust settlement. Gates, meanwhile, is looking toward still another platform - the fourth stage in the PC revolution. Based around a ''social interface,'' he says, this software will be so friendly that no one will be left in the technological dark.

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