Microsoft Bails Out the PC Market

[Big-O Mark]

Microsoft Bails Out the PC Market

This summer, millions of businesspeople will be upgraded against their will. And no, we don't mean their flight plans.

Microsoft will officially end technical support for Windows 98 and Windows NT 4 on June 30. The financial implications for Microsoft and others could be significant, even in the short term.

Pacific Crest Equities estimates there are 300 million PCs worldwide running these older operating systems — 195 million in corporations and 105 million in homes.

Pacific analyst Brendan Barnicle believes that 25 percent of these enterprise customers and 17 percent of home PC buyers will replace their systems in the first half of this year, leading him to raise his earnings-per-share estimate for Microsoft's fiscal third quarter, which ends March 30, by 2 cents, to 49 cents. Consensus estimate for the quarter is 47 cents per share.

A Boon for Microsoft

Barnicle also estimates that 150 million users are running older versions of Microsoft Office, which will not work well with newer versions of Windows. A massive upgrade of Office would be a boon to Microsoft, since at times it has been the most profitable product the company sells. The phaseout is within Microsoft's usual support framework.

Barnicle is optimistic about a relatively swift corporate upgrade cycle, since "an organization's livelihood might depend" on running the latest software, he says.

Microsoft will announce its fiscal second-quarter numbers on Jan. 16. In October, the company said to expect sales of $8.5 billion to $8.6 billion, up from $7.7 billion in the year-ago quarter.

Start of an Upgrade Cycle

Corporate and home users will not be forced to upgrade to new PCs — they can run old software on old PCs as long as they want — but the lack of technical support, including patches and upgrades, should spark the replacement cycle.

PC companies, such as Dell Computer, Hewlett-Packard and ailing Gateway, would benefit from a new cycle, as would Intel.

The industry has not had a significant upgrade cycle since 1999, when businesses replaced older systems with year 2000-compliant models. Since then, companies have tried everything under the sun to promote sales, including two-for-one offers, free vacations, and PCs packed to the gills with bells and whistles.

Looks like the answer will be a lot simpler than that.

[fuuucckkers]

Crap, now I wont be able to get Windows Update for my 98se anymore.. bah!!

I'll just download all those updates before they cancel it and burn it to CD.

I read something on a website that Microsoft will be leaving the OS market soon to be just an electronics producer..of little gadgets and whatnot. Maybe I read that on another post in here? I have no idea ... I cant keep track anymore..

[Robpol86]

damnit! IM RUNNING 98SE! well, not running, but installed, dualboot. only way i can format my xp partition in ntfs. Is there any other way i can get xp to format to ntfs (without converting) during the install? Usually when i try, dos wont see ntfs, and dosntfs wont let me write to ntfs. And xp keeps copying setup files to c: insetad of my 120 gb hdd which has alot of space left (more than 30 GB). When i format c: in ntfs and d: becomes c: and i install to that, after restart, it says NTLDR cant b found. can sum1 help me if they understand wat i said?

[harra]

I posted the thing about M$ leaving the OS game. It was just purely rumor that I heard when I was a worker-bee at Compaq.