Microsoft Likes View Through Windows 95 : Computers: At a meeting with reporters and analysts, executives paint picture of a robust company with big plans.
In the world of technology, it’s a moment that could be likened to a famous painting, “The Coronation of Napoleon and Josephine,” in which Napoleon Bonaparte snatches the French crown from a reluctant Pope. With the imminent release of Windows 95, the latest version of its wildly popular operating systems software, Microsoft Corp. steps fully out from the shadow cast by one-time patron IBM and establishes its supremacy in the PC industry.
At a meeting of reporters and security analysts here Thursday, Microsoft painted a picture of a company at the peak of its powers. The company has hired 800 new employees in the last quarter alone, bringing its work force to 17,800. It plans to invest $860 million in research and development in the upcoming fiscal year, more than the total spent in its first 17 years of existence.
Despite a big sell-off earlier this week--driven mainly by profit-taking--Microsoft’s stock is nearly twice as valuable as it was a year ago. On Thursday, shares rose $1.63 to close at $96.13 on Nasdaq.
And lest anyone think Microsoft is losing its legendary competitive drive, Executive Vice President Steve Ballmer on Thursday remarked upon the company’s campaign to unseat Word Perfect in a few countries where it was outselling Microsoft Word: Denmark, Finland, and Norway. “There is no country too small,” declared Ballmer.
“Any weaknesses?” asked a reporter of a securities analyst. “[Microsoft Chairman] Bill Gates could drop dead,” the analyst replied.
In truth, there is one serious threat to the Microsoft juggernaut: the Justice Department’s latest antitrust investigation. It is focused on the Microsoft Network, the on-line service that Microsoft intends to include in Windows 95, and the agency is contemplating action that would force Microsoft to sell the Network and Windows separately.
But not even government action is likely to blunt in any substantial way the impact of Windows 95. It is expected to sell 30 million copies by the end of the year, its debut heralded as a immense opportunity for the entire PC industry.
Says Bob Stearns, vice president of corporate development for Compaq Computer Corp: “It’s the most important piece of technology I’ve seen in at least five years.”
Even some of Microsoft’s harshest critics have now grown silent. Competitors who complained loudly about Microsoft’s allegedly unfair advantages--the company’s use of its dominance in operating systems to conquer other software categories--are enthusiastically endorsing Windows 95. Lotus Development, recently acquired by IBM, says creating software for Windows 95 is a “top priority” even though IBM sells OS/2, an operating system that competes with Windows.
With the personal computer industry evolving more and more into a consumer products business rather than a business equipment business, Microsoft will devote considerable energy this year to shaping the way it is viewed by the public.
It spent $100 million on “image” advertising in its recently ended fiscal 1995, and will almost double that in fiscal 1996. Intelligent, positive, innovative, honorable, interested are the words the company wants associated with the Microsoft brand, said Bob Herbold, Microsoft’s chief operating officer and a former executive with Procter & Gamble. And that money comes on top of the $150 million that will be spent just to advertise Windows 95.
All of this represents a confluence of many years of technology investments for Microsoft. At the center of the constellation is Windows 95, the desktop software for both home and corporate PC users. For networked PCs, there is Windows NT, which started slowly but is beginning to take off. Microsoft word processors, spreadsheets and databases increasingly dominate the market. And then there is the Microsoft Network, for the march into cyberspace.
To be sure, there is much that could still go wrong, if not now, then next year or the year after. It wasn’t long after Napoleon crowned himself Emperor of France that he suffered a series of defeats. IBM looked for all the world to be on top of a mountain in the late 1980s, but it was actually on the edge of a cliff.
For now, though, it’s Microsoft’s competitors that are suffering a Russian winter--and the victor has no mercy. “We have desperate competitors,” Ballmer said. “When someone is outselling you six to one, it causes you to do crazy things.”
