Microsoft to Open Windows to Cheaper PC

For many months now, Microsoft Corp. has been emphatically denying that a newfangled type of inexpensive desktop computer, commonly referred to as the Network Computer, would pose any challenge to the Windows-based personal computer standard.

But today, the software company will acknowledge that denial is no longer an option by advancing its own specification for simpler, cheaper, easier-to-use PC. Industry leaders including Intel, IBM, Compaq, Dell and Hewlett-Packard are expected to announce support for the initiative.

Microsoft’s move--and Intel’s newfound interest in PCs that use the Pentium microprocessor--are a response to the efforts of Oracle, Sun Microsystems and others to popularize low-cost alternatives to the standard PC that don’t use the Windows operating system and rely heavily on programs downloaded from the Internet.

On Tuesday, Sun will unveil one such machine, which is designed to take advantage of Java, a programming language that’s especially effective for Internet applications. The Sun machine will be aimed at corporations that are looking for a cheap, high-performance alternative to the “dumb” terminals and PCs that are connected to large mainframe and minicomputer systems.

Oracle has several designs for a Network PC that would be marketed to both consumers and businesses as a PC replacement, and Oracle Chairman Larry Ellison demonstrated one at the Agenda conference of industry leaders held in Phoenix last week. Microsoft Chairman Bill Gates, when asked what he thought of the systems, responded testily: “I haven’t seen it. I can’t comment on something I haven’t seen.”

Indeed, Microsoft’s sudden warming to the idea of a simpler PC was greeted by critics as another example of “vaporware” designed to undercut the competition. Microsoft has long talked about a “simply interactive” initiative for easy-to-use computers without offering much detail. The company has also announced a new “subset” of Windows that could be used on so-called Internet appliances.

But it’s not clear how much simpler Microsoft can make Windows and still keep it compatible with the vast base of Windows software available on the market. At Agenda, industry executives were predictably divided on the future of the Network PC.

Still, there is some agreement that the PC needs to get cheaper and easier if it’s to continue attracting new enthusiasts. Said Nick Donatiello, president of San Francisco-based market researcher Odyssey Research, “Consumers are still very nervous that they can’t make these things work.”