Microsoft to Unveil Server System
Microsoft Corp. today will release its first new operating system for server computers in more than two years, a step that analysts said will help the software giant pick up market share at the expense of rivals with pricier offerings.
Windows Server 2003 improves on the performance, ease of use and security of Windows 2000. It may be adopted more quickly than previous Microsoft offerings, because the company has prodded many large customers to pay subscription fees that automatically entitle them to upgrades, analysts said.
The server market is Microsoft’s third-largest by revenue, after office productivity programs and PC operating systems. But growth in sales of software for PCs has been hampered by anemic computer sales and slowing upgrade cycles -- along with Microsoft’s already dominant position -- so server software is one of Microsoft’s most important growth opportunities.
A year after Windows 2000 was released, it accounted for only 25% of new Microsoft server installations. Analysts said customers weren’t eager to adopt the new software because it couldn’t run as many programs and didn’t have as many bug fixes as the older Windows NT.
With the subscription policy, the first-year adoption might reach 30%, said IDC software analyst Dan Kusnetzky.
Microsoft general manager Jim Hebert said the company expects more upgrades from Windows NT than from Windows 2000, but he wouldn’t give targets or pricing information ahead of the official release.
Along with free operating system Linux, Microsoft has been gaining share in the server software sector as programs from Sun Microsystems Inc., Hewlett-Packard Co. and IBM Corp., have been losing ground. By the end of the year, Microsoft may be taking in half of the world’s revenue from server software, Kusnetzky said.
Microsoft’s strongest selling point remains its dominance on the desktop PC. No other server software can connect as effectively with PCs running Windows -- an advantage that has triggered an antitrust inquiry by the European Union and an agreement with the U.S. Justice Department that requires Microsoft to license most of the connection protocols to rivals.
Microsoft shares fell 2 cents to $25.72 in Nasdaq trading.
