Windows Server 2003 success key to Microsoft's future

Windows Server 2003 may be steeled for security threats, but will Microsoft's new baby be protected from bugged-out customers and open-source competition?

Windows administrators one day may come to see 2003 as the year that Microsoft reached a turning point in how it views software security and quality.

They may also see 2003 as the year that Windows reached parity with Unix in terms of maturity.

As for Microsoft, this may well be the year the software manufacturer saw Windows wear out its welcome for some customers who, after long considering the platform to be "good enough" computing software, now regard it as too expensive given emerging alternatives.

After many fits and starts, Microsoft on April 24 will launch Windows Server 2003, the latest major version of the company's mainstay server platform. The Windows platform isn't loaded with major new features, though there are a few. The big selling point is the fact that the server is the first major platform to be released to contain the fruits of Microsoft's Trustworthy Computing Initiative.

From the days that Windows was created in the early 90s, and with the initial release of NT, the product had made substantial strides, said Peter Pawlak, an analyst at Directions on Microsoft, a Kirkland, Wash., consulting firm.

"Microsoft has refined the product, cut out bugs, made it more reliable and secure," Pawlak said. "They have added the big things, such as Active Directory, needed to make the product complete."

Windows Server 2003 ships with many of the features disabled, and customers will have to activate the features they wish to use. This strategy, long embraced by other vendors such as Novell Inc., helps to minimize ways that viruses and worms can penetrate the platform.

For Microsoft, this is big stuff because the company has never had a concept of security, said Jonathan Eunice, president and principal analyst at Illuminata Inc., a Nashua, N.H.-based consulting firm.

"It's worse than if the security were bad; they had never planned for security historically. They never planned for having the environment coming under attack."

But Eunice also said that Microsoft may fast be reaching a point where security and better quality alone cannot feed the company's hungry revenue engine. Microsoft and Intel Corp. built fabulous businesses selling adequate, inexpensive computing tools. But the company has other challenges that will make it tough to sustain a rate of growth that can keep investors happy.

Customers complained last year when the company's unpopular Software Assurance licensing model took effect. Even though Microsoft continues to play with its licensing structure -- in fact the company is preparing to announce more changes, according to sources -- many customers continue to look at emerging open-source technology.

Though it's hard to know how many companies will act on their anger, the increasing strength of lower-cost open-source platforms has without a doubt put a cat among the pigeons, according to Eunice.

"Just as VMS did to the mainframe in the early 80s, this is the year that Open Source and freeware start to really cramp Microsoft and put some competition in the game," Eunice said. "Microsoft realizes that the next wave of commoditization is free or driving close to free, and that's going to hurt [them]."

Eunice said to look to Microsoft's Office as one example. Office is a saturated market, but the open-source toolset, OpenOffice, is increasingly attractive. OpenOffice may not be great and may not have the slickness of XP, but it's pretty darn effective, Eunice said.

Microsoft has already had to bow to some pressure caused by the promise of open source. Windows Server 2003 has a Web version that is specially priced to compete against Linux, for example.

For many customers, the Windows Server 2003 launch won't push them into doing anything they wouldn't do otherwise. "We will continue to roll forward with our Windows 2000 launch," said Paul Edwards, Windows administrator at Cendant Corp., a New York-based conglomerate.

Edwards said that his company is about halfway through its conversion to Windows 2000, and the company is about to begin installing Active Directory. His primary interest in Windows 2003 is the version of Active Directory it uses, which he said he hears is easier, more secure and more manageable. "We will probably deploy Active Directory on 2003 and have Windows 2000 servers mixed in."

FOR MORE INFORMATION:

Interview: How will users decide on Windows Server 2003? Analyst offers views

Article: New file system in Windows 2003 could cut TCO

Interview: Windows Server 2003 offers more, demands more

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