From the July 17, 1995 issue of Smart

Windows 95 Set to Break Retail Records

By David English

Just how big will Windows 95 be? "I doubt we'll see before the end of the decade any product ship this much is so short a period," says Rob Enderle, a senior industry analyst at Dataquest, a research firm based in San Jose, Ca. "It's primarily because we had such a big lag between major releases for Windows. There really should have been a major Windows update at least one year ago, if not two years ago."

Enderle predicts that Microsoft will sell more than 29 million copies of Windows 95 this year—about 14 million as pre-loaded units and 15 million as upgrade units and additional sales. He sees total sales for Windows 95 of more than 62 million in 1996, 83 million in 1997 and 109 million in 1998.

Jeff Sanderson, Microsoft's general manager of strategic accounts, is more cautious in his estimates of how many computer users will upgrade to Windows 95. Of the 70 million who are expected to have PCs capable of being upgraded to Windows 95, Sanderson expects "about 20% of those people to upgrade in the first 12 months. So in rough terms, we're talking about a 12 million potential in 12 months." In the first three months—from August 24 to November 24—Sanderson projects that Microsoft could sell between 4 and 5 million upgrade packages.

A No-Brainer
Based on Dataquest's survey of PC hardware vendors, Enderle says that virtually all PCs will be pre-loaded with Windows 95 following the August 24 launch. "We think that the way they're building the channel, the channel can handle as many as 14 million copies in that first week. Given that DOS 6 did somewhere in the neighborhood of 4 million copies, and there really wasn't a lot of demand for DOS 6, the 14 million number while high isn't excessive." These PCs will include both Windows 3.1 and Windows 95, giving consumers a choice of either operating system. Enderle doesn't think any hardware vendor will take a chance on shipping PCs exclusively with Windows 95 until around January.

Based on an early survey of corporate users and consumers, Dataquest had estimated that fourth quarter Windows 95 sales would be weighted toward the corporate environment. The firm's most recent survey, however, indicates that sales will be roughly equal between corporate users and consumers. Because the consumer side is looking stronger—even before the real promotion has begun—Enderle is concerned that he may have underestimated the three-month ship rate of Windows 95.

Dataquest found in its surveys that corporate users are most excited about the fact that Windows 95 doesn't crash as often as Windows 3.1—or at least doesn't take the whole system down when a single application runs into trouble. "So from a corporate standpoint, it drives down your service costs," says Enderle. Consumers, on the other hand, are drawn to Windows 95 as a powerful new game platform. They won't have to deal with multiple boot-up configurations or special startup disks in order to run the latest arcade games. "And once they see the games that will be coming out on the native platform, it becomes a kind of no-brainer that this is something that they'll want," says Enderle.

Winners and Losers
Whenever there's a major shift in operating systems, there are winners and losers. New companies will see a niche, fill it with a product, establish a name, and quickly gain market share. Some older companies will wait too long to respond and be devastated by a sudden loss of market share. Lotus correctly anticipated the move from the Apple II to IBM's PC and positioned 1-2-3 as the logical successor to Visicalc. Microsoft, in turn, beat out Lotus by establishing Excel for Windows well before Lotus was ready to release 1-2-3 for Windows. On the other side, many well-established companies, including Borland and Informix, assumed that OS/2 would do much better than it has. They wasted time and resources writing applications for OS/2, while their competitors concentrated their efforts on Windows.

Symantec is one of the software companies that's betting Windows 95 will sell extremely well. The company will release three Windows 95 utility packages when Windows 95 ships—Norton Utilities for Windows 95, Norton AntiVirus for Windows 95, and a new title, Norton Navigator for Windows 95. A fourth major product, pcANYWHERE will be logo certified sometime after Windows 95 ships.

According to David Oldfield, Symantec's director of product management for the Peter Norton Group, Symantec's survey of its large corporate customers and individual users indicated that Windows 95 will be a big success. "That means not just that it will be the really big OEM system of choice, but that the vast majority of people using Windows will convert to Windows 95," says Oldfield. "The market for Windows 3.1 products will become very small relatively quickly. And you can't make a business case for building products that will sell in relatively small numbers." Oldfield estimates that the current Windows 3.1 and DOS products on the market—if they're good products—will have a life of about two years, "But the idea of actually spending a lot of money to make them different from they are today would probably never pay off."

Symantec committed early to Windows 95 and worked closely with Microsoft as the operating system evolved. "We committed to it literally almost two years ago from a strategic perspective, and then as early as we could from an R&D perspective," says Oldfield. "The amount of interaction that has gone on between our engineers and their engineers for well over a year—about a year and a half—is quite remarkable. We've watched this operating system come along about as intently as Microsoft has."

Other software companies that are betting heavily on Windows 95 include Philippe Kahn's startup company, Starfish, which will offer Windows 95 versions of its two applications, Sidekick and Dashboard. Corel has designed CorelDRAW 6, the newest version of its flagship program, to run exclusively under Windows 95. And Microsoft, itself, will hit the ground running with Microsoft Plus!, a Windows add-on utility pack that will be released simultaneously with Windows 95, and Office for Windows 95, which is scheduled for release within 30 days of Windows 95. Lotus and Novell won't have their Windows 95 suites ready until much later in the year, giving Microsoft a chance to increase its lead in the suites category.

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