Wednesday, August 10, 2005

August 2005 Early Indications I: Remembering Windows 95

It's a slow time in the technology industry. Breakthrough innovations
are few and far between: the iPod is almost four years old, and it's
hard to point to anything very interesting since then. Because
revenue growth has slowed, mergers and acquisitions have become the
main order of business at such companies as Oracle and, for a time,
HP. Venture capital is increasingly migrating to biotech, physical
security, and other sectors only tangentially related to computing.
The industry could use an injection of energy, activity, and not least
important, revenue.

Given this state of things, everyone is watching Microsoft, which is
preparing to launch a new operating system next year. Last month
merely changing the name from code (Longhorn) to product (Vista)
devoured a lot of attention, and more recently a stripped-down version
of the product shipped to beta testers. The product has been a long
time in coming, and the scope has been managed downward in several
respects. Nevertheless, both Microsoft and the industry more
generally see Vista as a potential jump-start very much in the same
category as Windows 95 ten years ago. Because Vista represents the
first opportunity in over ten years to begin with a "clean sheet of
paper," unlike Windows 3.1, 98, ME, and 2000/XP, Bill Gates has
repeatedly linked the two products in public.

Before looking at whether that association is warranted, it's worth
remembering just what Windows 95 brought to market. In 1994, loading
a browser onto Windows could be complicated by the operating system's
lack of Internet Protocol support. DOS prompts were very much a
day-to-day reality. File names were limited to eight letters, and
CD-ROM support was spotty. E-mail was used only by fringe populations
rather than being nearly universal. Adding hardware was more
difficult than it needed to be, multitasking was nearly impossible for
both processing and user interface reasons, and multimedia computing
was, again, the province of only a small subset of users.

Windows 95 changed all of that. Even before Gates' famous "Pearl
Harbor" speech helped turn Microsoft into an Internet-aware company,
Windows 95 made Internet connection, through both browser and e-mail,
a mass phenomenon. Multimedia, too, became an everyday event with
better hardware support (including CD-ROM drivers). Overall
usability, despite the initial confusion at using a "Start" button to
shut down a machine, was enhanced by deeper camouflaging of the
command-line layer, longer file names, and plug-and-play peripheral
support. Finally, the operating system kept pace with Intel's chip
performance and supported more realistic instances of multitasking.

The public responded. In the quarters immediately following the
launch, retail sales of Windows 95 software soared, augmenting a
strong increase in OEM sales of pre-loaded operating systems.
Responding positively to improved networking support and promises of
enhanced manageability, corporate IT organizations spent at record
levels: Microsoft's operating systems revenues jumped from $1.5
billion in fiscal 1994 to $4.1 billion only two years later.

What might we deduce about the prospects for Vista based on the
Windows 95 experience? First, it's hard to see a parallel burst of
initial interest, with or without a Rolling Stones commercial.
According to Microsoft, the benefits of Vista fall under five general

-Deployment (for organizations managing large rollouts)
-Performance (including better power management and faster boot up)
-Management of distributed users' machines

These categories of improvements are clearly aimed at corporate buyers
more than individuals. Most of the things a consumer-grade user will
see - including better desktop graphics, and RSS support within
Internet Explorer - already come standard in Mac OS X. Backward
compatibility will be substantial, to the point that many Vista
improvements (including the IE browser) will be available as retrofits
to Windows XP. These upgrades will also slow Vista adoption.

Here's another way of thinking about the comparison. In 1995,
Microsoft turned the telephone network into an extension of the
computer, or vice versa: between them AOL and Windows 95 made the
Internet a household utility. In 2006, no parallel leap into an
adjoining domain - think of home entertainment, specifically the
television - will be supported. Bill Gates longstanding prediction
about widespread adoption of a voice and speech interface to the PC
will be addressed with Vista support, but even given a powerful
standard processor configuration at its disposal, Vista still won't
make masses of people retire their keyboards.

In short, Windows Vista looks like a solid product for corporate
purchasers, but the lack of "gee-whiz" and "I've always wanted to be
able to do that" desirability will prevent end-user excitement from
reappearing the way it did ten years ago. An industry in search of
the next big thing will probably have to keep looking.