Switching to Windows 95.

The small business community greeted the announced August 24 release date of Windows 95, the long-awaited upgrade of Microsoft's flagship operating system, with equal amounts of fanfare and apathy.

Businesses have been deciding whether to convert to the superior networking capabilities of Windows 95 immediately, or wait a few months to gauge the market's reaction to the highly touted software. It's a dilemma that has several unsettling dimensions.

After more than 18 months of delays, Microsoft reluctantly announced that some computer manufacturers wouldn't receive final versions of Windows 95 in time to load onto their new machines before the August release date. In July, Compaq Corp. announced that it would wait as late as October or November before it begins loading Windows 95 on its new Pentium computers.

Furthermore, software manufacturers are still deciding whether or not they are going to create products that will run on Windows 95. Microsoft sent 120,000 software development kits to manufacturers to help them build software compatible with Windows 95. Although the industry giant has spent a great deal of time and money to make Windows 95 "backward-compatible" with older programs that ran on previous versions of Windows, it has had limited success.

The lack of backward compatibility affects practically everyone. Dataquest, a market research firm in San Jose, Calif., reports that some form of Windows is running on 88% of home PCs and 78% of business PCs. Applications such as Symantec Corp.'s Norton Desktop will not be compatible with Windows 95. Businesses that use these applications will be forced to buy the Windows 95 version.

"This is the big fear," says Lora Schiner, Microsoft's product manager for Windows 95. "Consumers and businesses are afraid that everything they had ever created in Windows is not going to be compatible with the new system. Backward compatibility has been difficult to achieve, but we think it can happen." Whether it happens immediately or not, Schiner says Microsoft expects more than 12 million copies of Windows 95 to be sold within the first six months.

Enrique Salem, general manager of system architecture for Symantec, says that Microsoft's dominant share of the operating system market is dictating the decision for everyone. Either spend the money for Windows 95, or risk many of your computer programs becoming obsolete.

"I'm not saying that the Windows 3.1 software will disappear, but before long, everyone will be using Windows 95," Salem predicts. "Once the Microsoft ad campaign kicks in and demand goes up, people aren't going to want the old technology."

Analysts predict that Microsoft will spend more than $200 million marketing Windows 95. But it will take more than marketing to overcome business concerns about the upgrade. Businesses that have an efficient operating system in place wonder whether the increase in productivity (which is not guaranteed) will justify the cost outlays of switching to Windows 95. A single Windows 95 upgrade will cost from $95 to $110. Network versions will cost more. There will also be additional costs for Random Access emory for some businesses (Windows 95 runs best with 16 MB of RAM). Businesses may also have to scuttle many of their existing software applications to purchase Windows 95 compatible programs--another potential software cost that could run into the thousands of dollars, depending upon the size of the firm. And even though Windows 95 is easy to operate, businesses will pay the cost of downtime for getting the system up and running, as well as the cost of basic training for employees.

Realistically, it will take some time for most businesses to make the switch to Windows 95.