CNET también está disponible en español.

Ir a español

Don't show this again

HolidayBuyer's Guide
Internet

Through the looking glass

Sales figures for Windows 95 haven't added up to what one might expect from the hype surrounding the product's launch last summer. Conveniently for Microsoft, that's the media's fault, of course.

With close to 40 million served so far, sales of Microsoft's Windows 95 on its first birthday are enough to make McDonald's envious. But as enviable as they are, the figures haven't added up to what one might expect judging from the hype surrounding the product's launch last summer. Conveniently for Microsoft, that's the media's fault, of course.

A recent report from market research company Dataquest forecasts that Microsoft will ship 45.7 million units of Windows 95 this year, a 27 percent reduction from a previous estimate. If that projection holds true, Microsoft could expect to have a Windows 95 installed base of 65 million users by the end of the year. Of the nearly 40 million copies sold so far, about three-quarters have been bundled with new PCs. Only 10 million have come from the software upgrade program.

These numbers have met internal targets, according to Microsoft officials, although they have never publicly specified the company's projections, so now of course the company can say whatever it wants about what it expected and how it feels about Windows 95's performance in the market.

"I was at an analyst meeting where [Microsoft vice president] Steve Ballmer referred to the Windows 95 upgrade hole," said Dataquest principal analyst Chris LeTocq. "That didn't sound like meeting expectations, but everybody's entitled to their positive spin."

The positive spin is that Windows 95 is doing exactly as the company expected, and if anyone outside the company expected more, it's because the media hyped the product too much. Members of the media weren't the ones who licensed "Start Me Up" by The Rolling Stones to go with the software, but ended up listening to it millions of times last August thanks to Microsoft.

The hole Ballmer was referring to has to do with its attempts to pry the previous version of its operating system, Windows 3.1, off of desktops; by the company's own estimate, Windows 3.1 is still installed on 49 percent of the world's PCs. Resistance to upgrading is primarily found in the corporate sector, says Microsoft product manager Rob Bennett, adding that corporate buyers are always and rightfully wary when considering a major upgrade.

In this case, the decision has been not merely whether to jump from Windows 3.1, but whether to upgrade to Windows 95 or Windows NT 4.0, Microsoft's high-end operating system that it describes as the "armored tank" of its product family, and just became available this month.

While Microsoft blames the press for any discrepancies, software companies hit hard after staking everything on Windows 95 blame Microsoft itself for inducing bloated market optimism with last summer's unprecedented marketing campaign.

Symantec, which makes utility software like the popular Norton Utilities, has laid off 100 workers and experienced a 65 percent drop in stock since Windows 95 launched last August.

Outsiders say that companies like Symantec should have known better.

"There is a tempering of expectations that this industry hasn't learned," said Bill Jones, senior director of product management for Lotus Development's business applications. "People's frustrations are due to how high expectations were set. They had help from the industry and Microsoft, of course, but all these people are still running a business."

Not everyone has been struggling in Windows 95 wake. Companies will also be more willing to upgrade the operating system as they go through their hardware upgrade cycles.

Graphic design software company Micrografx hasn't been tripped up by visions of Win 95 grandeur despite "betting the farm" on Win 95, according to director of business products management Ingo Heel.

"I think it met but did not exceed our expectations," said Heel. "Everyone got that big bump the first couple of weeks after it shipped, but then sales leveled off and have been consistent since January."

Moreover, Micrografx has recently signed on three major corporate accounts--Dow, Ernst & Young, and Mobil--for its ABC Graphics Suite, its only Windows 95 product, and senses that corporate buyers are ready to spend some bucks. "That 'hockey stick' curve will start to happen in corporate revenue, especially after the holidays," said Heel.

Related stories:
DOJ fight hits fever pitch
MS strengthens encryption
Explorer 3.0 bug strikes already
Antitrust questions won't go away
Windows 95, Take 3
Windows to get two upgrades this year