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MS backs down in NT fray

The software giant admits that an initial reaction to the release of a version of competing software was confusing for customers and regrettable.

Is Microsoft (MSFT) biting off more than it can chew?

After a week of exchanging shrill rhetoric with competitor Novell, executives at the software behemoth's Redmond, Washington-based campus are addressing a bubbling controversy involving the popular Windows NT Server operating system (OS) with a rare act of contrition, admitting that an initial reaction to the release of a version of competing software was confusing for customers and regrettable.

The controversy underscores the high-stakes gamble Microsoft is making on its Windows NT software, the pressure in Redmond to deliver the next version of the OS, and the knee-jerk manner in which Microsoft executives sometimes respond to competitors' claims.

The hubbub, first reported by CNET's NEWS.COM, started when Microsoft posted a document on its Web site that said the company "can not support Windows NT server running NDS for NT." This followed a Novell critique of a beta version of Microsoft's software.

Various weekly technology magazines took these strong words from Redmond to mean that customers who deployed Novell's directory services (NDS) for NT on their NT-based networks could not expect service and support from Microsoft at all, which is not the case, Microsoft now assures. If true, the move would have caused an uproar in the corporate network administrator community.

"Microsoft really handled it badly," said Dwight Davis, a Microsoft analyst with Summit Strategies. "They really come off as heavy-handed. There's better ways to approach this from a marketing sense."

As a result, the Windows NT server marketing team held a series of meetings toward the end of the week, evidently held to get its story straight, according to sources close to the company. An initial document posted on its Web site was augmented with a clarification of company policy.

"The fact of the matter is we will support Windows NT server shops that have NDS for NT installed," said Tanya van Dam, group product manager for Windows NT server. "I'm sure we didn't handle it well. I think we could've been clearer. Everybody wants to pick on a vendor-to-vendor controversy.

"It's been pretty fundamental to interoperate with systems other than NT," van Dam continued. "We believe interoperability is extremely important."

As NT gains steam in corporate networks, it will increasingly have to live in harmony with various flavors of Unix as well as large mainframe systems.

The Microsoft executive did note that the company will not be able to support NDS-based software code installed on an NT-based system. Novell has said it will continue to offer support on those occasions, consistent with its policy since the product shipped early this month.

Included in Novell's product is a replacement for a single NT DLL (dynamic link library) that could compromise security levels in a Windows NT server machine, according to van Dam. That is the crux of Microsoft's point, she said.

She said the DLL--an obscure technology made famous for its role in the Justice Department's case against Microsoft--is not intended to be replaced and is part of the NT security system certified by the government.

What is a directory service and why does it matter? Directory software ties various network elements and systems, user access rights, and company-wide policies into a central administrative tool that network managers can use to govern their network. This type of software is part of the "plumbing" that allows corporations to deploy a wide variety of applications easily and securely.

Microsoft is thought to be behind in this area, currently using a domain-based directory scheme that has numerous critics. Version 5.0 of Windows NT server, a highly anticipated upgrade, includes a next-generation technology called Active Directory that is expected to at least partially close the gap vs. rivals like Novell and has already won the support of several strategic companies, such as Cisco Systems.

But the release date for the next version of NT is murky, with some believing that the upgrade will not arrive until 1999. That gives competitors a window of opportunity. Novell executives viewed the week's events as a chink in Microsoft's NT armor.

"Obviously they are concerned about the success of NDS for NT and are looking for any excuse to not get their customers to evaluate NDS," said Michael Simpson, director of marketing for Novell's network services division. "This should encourage customers to look at it, if anything.

"Novell is a networking company, and that means that we connect and manage products from multiple vendors," Simpson continued. "Microsoft obviously doesn't consider networking to be anything that doesn't come in a box of NT Server. That's not the reality for our customers and it shows Microsoft's immaturity in this marketplace. Our joint customers need not be concerned. We will support them. It's our business. It has been for 15 years."

The tit-for-tat, largely played out on both companies' Web sites, also hints at the pressure building within Microsoft to deliver on the promise of NT 5.0. Various members of the company's braintrust, including CEO Bill Gates, have said they are "betting the company" on this next release.

"In a way, Microsoft may not mind that everyone's attention is on the Justice Department investigation given the current state of NT 5.0," Summit Strategies' Davis noted. "They're probably getting quite worried about over-promising on NT 5.0 release dates."

This is not the first time Microsoft has put its foot in its mouth defending NT.

In the aftermath of an introduction of a low-end server system and accompanying software last summer, NT competitor Sun Microsystems publicized a report from the Standish Group that was critical of NT's capabilities in enterprise corporate networks.

Microsoft lashed out at the user survey, characterizing the report as "ridiculous" in an online document. That characterization was pulled off Microsoft's Web site after a few hours and replaced with a watered down version. The latest flap over Novell's software seems like more of the same to Sun executives.

"That's consistent with their style," noted Brian Croll, director of marketing for Sun's Solaris products. "Unlike the consumer market, people are betting their jobs on their decisions, so their faith in the information they receive has to be high. That's a fundamental difference in the enterprise market."

Sun continues to feel the heat from NT. The company makes its own OS software called Solaris--a version of Unix--that includes industrial-strength features not yet available in NT. Executives from the veteran computing firm continue to revel in the shroud of secrecy enveloping the release of NT 5.0.

"If it were a movie it would be 'Waterworld,'" Croll said, comparing the state of NT to one of Hollywood's most famous delayed epics, which turned out to be a commercial flop.