Will Windows XP mark end of forced upgrades?

By Joe Wilcox
Staff Writer, CNET News.com
October 23, 2001, 4:00 a.m. PT

For years, software makers invented operating systems and applications that required more computing power, leading to a demand for new chips and other hardware--a cycle that has been likened to the automobile industry's infamous practice of "planned obsolescence."

The release of Windows XP, however, may mark the formal end to that cycle as consumers and businesses find increasingly that the equipment they already own is good enough to run most of the software they need. With the U.S. personal-computer market largely saturated, Microsoft must depend on sales of Windows XP to customers upgrading from older Windows versions, instead of to those buying new PCs.

Businesses running Windows 2000 will find their existing systems adequate to run XP. Consumers with a minimum 600MHz Pentium III-based computer also should find their hardware adequate for running Windows XP, though older systems could require extensive upgrades or replacement.

"There isn't a motivation to go get the latest, greatest thing as there was back with Windows 95," IDC analyst Roger Kay said. "You have a lot of marginal systems--maybe they bought them two and a half years ago--with 64MB of memory, and it's not as clear a line they need to get new hardware. So they don't."

This disruption of the historical software-hardware symbiosis will have vast ramifications for the entire computing industry, which has long been suspected of perpetuating artificial demand for its products.

Will companies upgrade to Windows XP? Kirill Tatarinov, CTO, BMC Software

But realities of the marketplace have disturbed the delicate balance of the Wintel duopoly's ecosystem, leaving the hardware, software and processor ends of the business to fend for themselves.

Intel, for instance, has pulled away from the cycle's traditional pace by making faster processors to compete with rival chipmaker Advanced Micro Devices. Microsoft, meanwhile, has publicly insisted that Windows XP will work with older chips and computers, mostly as a concession to the slow sales of new PCs.

Six years ago, when Microsoft released Windows 95, buying a new PC was practically a prerequisite for many consumers and businesses to make the upgrade. The memory and processor demands required to switch to Windows 95 from Windows 3.11 and DOS left few customers any choice but to replace their computers.

Architectural changes made by chip giant Intel--such as the move from 386 to 486 processors or, later, from the Pentium to Pentium II--also fed a relentless cycle of upgrades in the mid- to late 1990s.

"The covalence of events that drove people to a new hardware and OS in 1995 was entirely unique," Kay said. "In that instance, the operating system did make a difference, because it was the difference between having a true graphical user interface and not having a graphical user interface."

Around the time Intel introduced the Pentium MMX processor, Microsoft integrated the Internet Explorer browser with Windows, further increasing the need for processing muscle and memory. The move to Windows 95 and later 98 also required that the majority of software applications be rewritten for those new operating systems.

Since then, however, the Windows graphical interface has remained largely the same. After Intel released the Pentium III, the chip's processing power pushed past the demands of software, which has yet to catch up.

"Windows stopped being substantially more demanding back in the Windows 98 time frame," said Peter Glaskowsky, an analyst with MDR/Instat.

Of course, the question of whether new hardware is needed will depend on such factors as the age of the existing PC and which Windows XP features will be used--and requirements can vary widely with functions like wireless networking, videoconferencing and CD burning.

Jim Allchin, Microsoft's group vice president in charge of Windows, maintains that any PC bought from Christmas 1999 on will be satisfactory to run XP. But industry analysts say Microsoft's hardware advice is overly optimistic, especially if customers want to use some of the more resource-intensive functions.

"The requirements of XP are such that people with older PCs with older components aren't going to be able to run it," ARS analyst Toni Duboise said. "The products I am seeing released with XP are fully loaded--we're talking about 256MB and 60GB hard drives. It's incredible how ramped up these machines are."

One reason for need of such resources is Windows XP's heritage, which derives from its business-oriented cousin, Windows 2000. That operating system and its predecessor, Windows NT, required much more memory than Windows 95, 98 or Me. The improved memory management of Windows 2000 required more processing power, as did additional security, networking and user-management features.

Many of those features will come with both versions of Windows XP--Home for consumers and Professional for businesses. Microsoft recommends 128MB of RAM minimum, but Duboise said twice that amount may be more practical.

In addition, analysts question Microsoft's contention that a 300MHz Pentium chip can be used to run Windows XP. "That's not fast enough. Sure it will run, but that's about all," Glaskowsky said. Realistically, he added, "I would say a 600MHz to 800MHz Pentium III is probably the minimum standard for real people, particularly if people don't know what they're going to be using the system for."

Still, that is far below the top processor speeds of many new PCs on the market. People using 600MHz machines may be tempted to try Windows XP on their existing equipment, rather than buy expensive new PCs--if, that is, they think the new operating system is worth buying at all.

Kay notes that consumers and businesses have held back on all computer-related purchases in the slumping economy, especially since the terrorist attacks of Sept. 11. IDC predicts that desktop PC and notebook shipments will decline 18 percent in the United States during the fourth quarter from last year's levels. The consumer segment will see the steepest drop, a 31 percent plunge from the fourth quarter of 2000.

"That's a downright disaster," Kay said. "XP will warm the thin holiday fire, but otherwise it's going to be lean overall."

George Fiala, a direct-marketing executive from Brooklyn, N.Y., is one of those who believes that people can limp along with the hardware and software they are using now. "In these times I am sure that many people will stick with what they have," he said. "I used a 486 machine with Windows Me for the past two years, and while it was a pain to keep having to reboot, it did everything I needed."

Doug Shekoyan, a raisin farmer from Fresno, Calif., is one of many business owners who are interested in Windows XP but are waiting before taking the leap. Because he bought new Windows 98 PCs in 1999 "to get ready for the big Y2K problem, it will be another 12 to 18 months or so until I am ready to purchase new machines," he said.

And there are those who oppose Windows XP for philosophical reasons, objecting to the way Microsoft is using the operating system to shut out competition.

Don Fitzpatrick, president of InterNetworx Systems, is one such critic. The Brookfield, Wis.-based developer provides business-management software to smaller companies.

"Microsoft's tactic of merging non-operating system functions like a media player, a photo editor or a CD writer into XP may help them drive a competitor out of a market they want to enter," Fitzpatrick said. "However, the logic for embedding them in the operating system is questionable, and customers may be better served by separately installing best-of-breed third-party programs of their choice."  

Hardware: No free ride for PC makers