Software Firm Improves Windows NT Program

WHEN Microsoft Corporation unveiled its Windows NT software for high-end computers two years ago, technologists were a little underwhelmed.

The software was slow, took up too much computer memory, and had competition that was well-established and liked. Microsoft was already king of small-computer software. Was this its best effort to move upward into providing software for more advanced corporate uses?

Today, while Windows NT still doesn't have a huge market share, many analysts are singing a different tune.

In what has become a pattern for the software giant, Microsoft has used persistent product improvement, aggressive marketing, and clout to build a future for Windows NT. The program is the first operating system (software that runs a computer's most-basic functions) that the company has developed from scratch.

(Microsoft's entry into another area, electronic commerce software, was slowed by its decision Saturday to drop its planned $2 billion acquisition of Intuit Inc., which offers Quicken, the most popular personal-finance program. The merger faced a Justice Department antitrust challenge.)

New technology

''NT'' stands for new technology. Windows NT is based on all-new code, not on Windows, the Microsoft program that helps to run most personal computers (PCs). It is less prone to crash than Windows and includes security features that corporate users demand. And it can run Apple Macintosh software as well as software designed for Windows.

The Redmond, Wash., company recently shipped its 1-millionth copy of Windows NT -- a target it had hoped to reach within the first year.

That slow start is not surprising, since winning acceptance for a new operating system is an arduous process, says Chris Galvin, an analyst with Hambrecht and Quist, a San Francisco investment house. Customers go through a long cycle of looking, thinking, trying, and finally, buying.

Rob Enderle, another software analyst, says that Microsoft is gaining in the ''mind share'' battle -- getting potential buyers to think about its product.

As for market share, Microsoft still lags behind Novell Inc., the Provo, Utah, firm that makes the most popular software for linking computers together in networks, called Netware.

In addition, companies such as Novell and IBM Corporation sell a variety of versions of the Unix operating system for high-powered ''workstation'' computers.

Windows NT is challenging its rivals for both of these markets, with built-in networking features and the power to run large programs on workstations.

PC market next

Ultimately, Windows NT may even challenge Windows for the much larger PC market. Windows, with about 80 million users, currently makes sales of its sibling look minuscule. Analysts say it is likely the two programs will merge in the future, as Windows NT is improved and as the average computer becomes more powerful.

Where ''advanced'' operating systems such as Unix and Windows NT have an advantage is in being ''portable'' -- able to run on a variety of computer chips.

Though first into this market, Unix suffers from having too many different versions. Vendors are ''so interested in competing with each other ... that the ability of them to hold off Microsoft is diminished,'' says Mr. Enderle of Dataquest, a market research firm in San Jose, Calif.

Windows NT is ''fulfilling the promise that Unix made,'' says Enderle. Microsoft is expanding the number of chips it can run on to include Motorola's Power PC chip and Sun Microsystems' SPARC. ''I think that's something that the Unix vendors are fearing,'' says Mr. Galvin.

A harder task for Microsoft is unseating Novell's network-managing software, which holds about two-thirds of that market.

Novell's Netware ''still has some competitively unique features,'' which means some customers might want to run Netware even if they also had Windows NT, Galvin says.

Last week, in a sign of partial rapprochement between Novell and Microsoft, the two companies announced joint technical support for customers that use both their products. The two companies had barely been on speaking terms a year ago. They will still be fierce rivals where network-managing software is concerned.

A key sign that Windows NT is coming of age is the rise of applications software written for it. The number of applications has risen 250 percent in the last year.