The warning from Stamford, Conn.-based Gartner Group comes less than a week before Microsoft's official debut of Windows 2000 and could make the operating system much harder to sell to big corporations.
"We think that 25 percent of medium and large enterprises are going to encounter new compatibility problems with a lot of business applications, non-Windows interoperability or network infrastructure," said Gartner Group analyst Michael Gartenberg.
That warning is one reason why the firm is reiterating its recommendation that companies should consider delaying major upgrades to Windows 2000 until after the release of the first bug fix--called a service pack by Microsoft--scheduled to debut in June.
Windows 2000, Microsoft's much-hyped and long-delayed commercial operating system, is geared more to businesses than consumers. Three versions of the operating system will be available next week: Windows 2000 Professional, aimed at PCs and workstations; Windows 2000 Server, for file-and-print servers; and Windows 2000 Advanced Server, supporting clustering, which is a way of making several systems act as a single, more powerful computer.
Gartner Group doesn't expect hordes of consumers rushing out to buy upgrades. On the contrary: "We think the biggest adoption on the client side will be new systems as opposed to in-place upgrades, particularly in year one," Gartenberg said.
The market researcher predicts that by year's end, only 15 to 20 percent of customers now using Windows 95 or 98, or Windows NT, will upgrade or purchase Windows 2000 Professional replacement systems. That number is expected to reach as much as 45 percent by the end of 2001.
One factor potentially slowing Windows 2000 adoption is the Year 2000 technology glitch. Companies that prepared for Y2K by buying new PCs last year may not see a need to upgrade or replace those systems for many months.
Microsoft claims there are solid reasons why users should switch to Windows 2000 Professional, particularly when moving from Windows 95 to 98. "This is really the first opportunity for Windows 9x customers to easily move to NT technology," said Craig Beilinson, Microsoft's lead project manager for Windows 2000.
Getronics, a services and consulting firm based in Amsterdam, is one customer satisfied with the migration from Windows 9x to Windows 2000.
"We think Windows 2000 is solid and stable and rich enough that customers can begin that adoption immediately," said Dave Hudson, vice president of marketing for Getronics. The company has already migrated 14,000 out of 34,000 Windows 95 and 98 users to Windows 2000.
The reasons for moving from Windows NT to Windows 2000 are less compelling, according to Gartner Group. Companies moving to Windows 2000 from Windows 9x will gain better overall performance and system stability, but they may not see much difference between NT and Windows 2000.
Server adoption will be sluggish, with only 5 percent of the Windows NT Server install base making the move to Windows 2000 Server this year, Gartner predicts. Gartner attributes that to a long evaluation process, as large customers assess Windows 2000's effect on corporate networks and applications.
But Gartner expects some rebound in 2001, with as many as 45 percent NT Server installations converting to Windows 2000 Server.
"On the server side, if you're deploying prior to Service Pack 1 or 2, and you're using it for non-mission critical stuff, you're probably OK," Gartenberg said. "Anything that is mission critical or for any of the new features in Windows 2000, you probably want to wait until at least Service Pack 1."
Minneapolis-based Cargill is one company moving cautiously, even though the agricultural conglomerate eventually plans to move all its desktops and servers to Windows 2000.
Cargill plans to have about 2,500 desktops running Windows 2000 by June 1, with plans to convert more than 30,000 PCs and servers to the operating system within two years.
"We understand internally this is not a simple NT upgrade," said Jim Smale, Cargill's IT manager for distributed systems management. "This is much more, in the sense it affects our directory service direction, our network strategy and how it plays into our Novell environment."
Corporate customers cannot be cautious enough about moving to Windows 2000, Gartenberg said, and should ensure application compatibility before beginning a migration to the new operating system.
"We think there are going to be a lot of hiccups across the board, and a lot of it will be in terms of application compatibility," he said. Gartner anticipates as much as 15 percent of existing Windows programs will require fixes to run correctly under Windows 2000.
"If you're jumping out of an airplane and you don't check your parachute first, it might open or it might not," Gartenberg said.