Windows: a candid appraisal.

Within the last year, Windows has made a remarkable transition from a Presentation Manager training-wheels product to a serious development environment. Finally, major horizontal applications and specialized programming tools are beginning to surface, even from microsoft's archrivals. in fact, it's becoming hard to find PC developers who don't expect to release Windows-based products within the next few years.

But we still hear a good deal of grumbling about the quality of the Windows code and--perhaps more importantly--about Microsoft's equivocal support of Windows third-party companies. Developers may be exquisitely polite about microsoft in public, but privately they rank the company's reputation for sincerity on a par with used car salesmen, politicians, and TV evangelists.

Some of the complaints we hear, of course, are clearly inspired by a mixture of envy at Microsoft's success and a dash of classic notinvented-here syndrome. But even Microsoft's closest development partners say they don't really trust the gang from Redmond. "windows will probably succeed because Microsoft is determined to own the whole world," said one. "Are we comfortable with that attitude? Not really."

One observer who has been openly critical of Microsoft's Windows evangelism effort is Carole Patton, the publisher of ACKnowledge/The Window Letter, a monthly newsletter targeted at Windows users in Fortune 1000 companies. Patton is full of praise for windows itself (especially for Windows 3.0, an unnannounced but widely-previewed upgrade that will probably ship early next year). But she argues that Microsoft continues to create unnecessary obstacles that hinder the acceptance of Windows as a viable environment for commercial developers.

We recently asked Patton for her appraisal of the current and future Windows marketplace:

Earlier this year, you said Microsoft has been "leading windows developers down the primrose path with overblown estimates of Windows sales." What's your latest estimate of the real size of the Windows installed base?

"Microsoft claims to be shipping a million copies of windows every year. That's pure bunk. If it were true, Windows would be on top of the bestseller lists along with Lotus 1-2-3 and Word Perfect. Also, about $16 million in additional Windows revenue would be showing up on Microsoft's income statement, and I don't see any big jumps there. in fact, if you ask retailers what the demand for Windows is right now, they'll tell you there isn't any.

"I would place the real size of the windows installed base at between 300,000 and 500,000 copies, not including run-time versions that were shipped with Windows applications. That estimate is in line with the actual sales of companies selling windows products--and those numbers are small. Micrografx is the top seller, and they probably do about $27 million in annual sales. Aldus does a very small business with PageMaker for Windows. And I would be surprised if Samna has sold more than 5,000 copies of Ami. Even Microsoft has probably sold only 50,000 or 60,000 copies of PC Excel."

Are there any smaller Windows developers who are doing well in niche markets?

"Except in the graphics and publishing area, there has been a lukewarm market response to most new Windows products. We get review copies of wonderful software that carry ridiculously low serial numbers--like 105, or 287. Usually the serial number is hand written on the disk in pencil. You know the developer hasn't sold many copies.

"On the other hand, Windows is booming abroad. Micrografx president Paul Grayson told me recently that nearly 60% of his sales were coming from Europe and Australia. Other developers say they're getting a lot of overseas inquiries, but often they don't have the manpower to follow up...

Do you expect the release of Windows 3.0 (a version you've said is "terrific") to have much impact?

"Windows 3.0 will stimulate the market tremendously because it breaks the 640K barrier. All the other changes are cosmetic, including an improved user interface for the desktop manager. Microsoft is showing 3.0 with Excel at corporate beta sites, and corporate users who were talking OS/2 six months ago are planning for Windows instead.

"Moreover, Microsoft has plans to bundle Windows 3.0 with DOS next year. That'll break the market wide open--by millions of copies. I expect Microsoft will make a real push to get a Windows/DOS combination onto as many 286 and 386 machines as possible. Remember, DOS is microsoft's biggest success story, and windows is a Dos upgrade."

You've been critical of microsoft for failing to help smaller companies that sell development tools and other windows aftermarket products. Has there been any progress is this area?

"Last January, Microsoft closed off access to its mailing list of registered Windows users. For small software developers this was a disaster. That's because three or four software distributors control national markets and the dealer channel won't handle a product until it's a major hit. "Fortunately, Microsoft recently reversed its mailing list policy and will probably announce later this month that its list will be available to developers on a case-by-case basis. in fact, the new policy will let developers use the list free the first time, as long as they are marketing a product and not fishing around for prospect names. This is great news.

"Incidentally, I think one reason Microsoft closed off the list was because people could readily see that the numbers the company was claiming for Windows sales didn't jibe with the number of registered users. Another even bigger reason: Microsoft was probably worried that a competitor like Lotus would use the list to grab away Excel users."

Microsoft's concern about protecting Excel (and other applications) raises a related question: Does microsoft have an obligation to support developers who compete with Microsoft's own products?

"If Microsoft was purely an applications house, I couldn't fault them. They certainly don't owe their competitors anything. But they are also a systems house selling an environment called Windows. it's in microsoft's interest to support their developers. it doesn't look good when your customers go bankrupt.

"Microsoft will have to deal with this issue head-on one day. I know several windows developers who can't raise capital because investors think the proposed product will compete with an application microsoft is workingon. it's pretty silly to have to base your business plan on whether or not microsoft will develop a competing product. I believe Microsoft must eventually split up its systems and applications divisions much as Apple did by spinning off Claris."

Do you expect Presentation Manager to cut into sales of Windows titles?

"For the next three to five years the Pc market will belong to Windows. One reason is because corporations are just now retiring some of their outdated 8086s and 8088s and are standardizing on 286 and 386-based machines that can run windows.

"Those new machines could run os/2 just as well, but they won't. The Presentation Manager products we see are windows remakes--PageMaker, Packrat, and Excel--and offer no real advantages under OS/2. Users know that, too. For example, Informix software developed an os/2 version of Wingz, then discovered at PC Expo in June that there was no market for it. Now, Informix is belatedly doing a windows version.

"Programmers wax poetic about OS/2 because they like the technology. But userB never buy technology; they buy products. Besides, windows 3.0 will have OS/2's multitasking and memory management abilities--and it will run DOS programs. The only thing Windows 3.0 won't have is multithreading. People with industrial or engineering systems might be concerned about that, but secretaries and most professionals don't care a whit. Keep in mind that 90% of the people who use computers in offices are support personnel--and there's no such thing as a low-co3t OS/2 workstation on the horizon.

"In short, OS/2 is like doing a trapeze act. You leap, and hope IBM is there to catch you. Windows doesn't require any great leaps of faith or radical commitments. It's just DOS, only better."