As 18 US states prepared to file antitrust actions against Microsoft, analysts at IDC predicted that Windows 98 would fall well short of its predecessor in early sales.
Although Texas decided earlier this week not to proceed against Microsoft, at least 18 other states and the federal Department of Justice were expected to file an expanded suit later today.
This would demand that Microsoft relax its agreements with PC makers to give them more freedom to choose the products they bundle with their hardware, even replacing Microsoft software such as the Internet Explorer browser. If Microsoft refuses to make concessions, the shipment of Windows 98 tomorrow could still be blocked.
IDC believes shipments of Windows 98 in its first 18 months will be at least 15 per cent lower than those of Windows 95 in its comparable period. Although sales will eventually be greater than those of 95, this is only because more PCs are sold than three years ago, and most of these will come with 98 preinstalled, added IDC.
This is partly because there has been significantly less marketing hype behind the new version of the operating system. But Microsoft and many of its PC partners were still able to assert that, should the shipment of 98, scheduled for tomorrow, be delayed, it would be a major blow to the IT sector and therefore the US economy, since so many vendors' plans are depending on it.
However, despite an early court win for Microsoft this week (see Newswire 13 May), Windows 98 could still be delayed by DoJ action. The Department is expected to broaden its action but still to focus primarily on the bundling of products - notably the Internet Explorer browser - with Windows 9X.
However, some analysts believe the probe could be extended further, to cover NT on the server. Although this is unlikely this month, they point out that the Back Office applications bundle is already closely tied to NT 5.0 and Microsoft is incorporating more features into this environment, such as built-in network security and data analysis tools.
There are key differences between this and the PC desktop situation, since there are more competitors in server operating systems and many of them also bundle tools and other products. But Dwight Davis of Summit Strategies in California is one Microsoft watcher who believes the NT strategy is starting to preclude independent software houses from competing fairly.
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