Is Windows 98 end of the line?

Microsoft (MSFT) is laying the groundwork to move away from its Windows 9x product line in favor of Windows NT as its preferred operating system for home consumers, according to company executives.

Microsoft officials, from chairman Bill Gates to senior vice president Jim Allchin and Windows product managers, have been saying for months that Windows 95 and its successors will take a backseat to Windows NT in big business. Now, however, it appears that the company's NT strategy will also apply to consumers and home users--making Windows 98, due in the first quarter of next year, the last Windows 9x operating system.

This week, in an interview with CNET's NEWS.COM, Gates indicated that a major new version of Windows 9x is doubtful after Windows 98. "We are committed to Windows 98 and that code base," Gates said. "But in terms of the major new version, we're [on] a wait-and-see [basis] and hope that we can focus our major new work on the NT code base and do a consumer flavor of that as the next major evolution."

Gates said the company will continue to issue service packs and updates to Windows 98 to support new hardware.

The company plans to base all future operating systems on the Windows NT kernel. That's a message that Microsoft has been delivering with increasing frequency in recent trade show and other public appearances.

Last week at Microsoft's Professional Developers Conference, Allchin said the company was "betting its future" on NT. Today, at a publishing industry conference in San Francisco, Gates reiterated the NT-only plan, saying it will take shape in 1999.

"For the consumer market, Windows 98 will be the primary product [for the coming year]. We won't have done a special version of NT for consumers. Later we will do a special version for the home; it will be the primary technology base."

The future OS lineup, it appears, will include Windows NT Workstation, NT Server, and a consumer-oriented version of NT, along with Windows CE for handheld systems.

Business users will most likely welcome the NT-only strategy, given that many corporations have skipped Windows 95 altogether in favor of NT. More than 60 percent of corporate PCs are estimated to still be running the aging Windows 3.1 operating system.

When the final version of Windows NT 5.0 is released sometime next year, it will contain 27 million lines of code. Much of that bloat is the result of enterprise-capable features such as a multidomain directory, which will be added to the operating system so that Microsoft can increasingly press corporations to migrate transaction-intensive applications off older systems to NT Server.

Just how Microsoft will shoehorn NT into a home-friendly version remains to be seen. Clearly, the company is banking on the plummeting price of PC memory, coupled with increasingly powerful processors, to make the switch to NT worthwhile for home consumers.

"The extra benefits you get there will justify [the move to NT by consumers]. And we think that won't be too far off in the future," said Gates. "But?we have to see about the price of memory and the reaction in the market."

And while the common kernel plan has been stated many times in the past, analysts said an NT-based consumer OS may pose problems for software developers down the road. "One aspect of NT 5.0 is that, for the first time, it has a full superset of Win98 features," said Dwight Davis, editorial director for Windows Watcher.

"Down the line, with a common kernel, one of the planned [products] will be a consumer-targeted OS. Imagine that there would be a lot of things in that OS that I would not want on my desk as a business user. So they may wind up with a common kernel, and distinct extensions and code on top of that kernel which may not be replicated up the hierarchy. And that will make it tougher for developers who want to write one product for all versions of Windows," Davis said.

Whatever the underlying development issues, Davis sees sound marketing reasons for Microsoft making the switch. "I would guess that by that point NT will have the glow of being the best OS that Microsoft offers, so why not call it 'NT Consumer' or something. So there would be sound marketing reasons to go with the NT name."