`No better time,' says Microsoft

Windows XP: With a gala kickoff in New York, the company is set to roll out the `biggest software launch in history.'

October 25, 2001|By Andrew Ratner | Andrew Ratner,SUN STAFF

When federal prosecutors failed to disrupt the launch of its biggest new software in years, Microsoft Corp. breathed a sigh of relief that it had dodged a bullet.

Then something bigger hit.

The Sept. 11 attack on the United States thrust the nation into war - and made it an inopportune time to launch a $250 million campaign to promote Microsoft's new Windows XP software. That's 25 times as much as the company spent to introduce the original Windows 3.0 software 11 years ago. Microsoft even changed the original tagline of its ad from "Prepare to fly" to "Yes you can" because references to flying took on a mixed message six weeks ago.

Wall Street and industry analysts have retreated from earlier expectations that the new XP software will prod many personal computers sales this holiday season.

"I think it's a good operating system, but I don't think that people are in a PC-buying mood," said John J. Puricelli, an investment analyst who follows Microsoft for A.G. Edwards & Sons in St. Louis.

Nevertheless, Bill Gates, the company's prolific founder, will be host at a kickoff party for XP today in New York's Times Square. As part of the gala, Sting will perform a free concert in a midtown Manhattan park. The company contacted Mayor Rudolph W. Giuliani to ensure that the city, recovering from the World Trade Center attack, still welcomed the event.

The "biggest software launch in history," according to Microsoft, will include events in dozens of cities around the world, including Baltimore at its convention center. From ad-wrapped buses to up-tempo TV commercials with Madonna on vocals, the message will be hard to miss in the coming weeks. Including spending by computers makers and others - who are also counting on XP's success - about $1 billion has been committed to market it.

"Everyone in the world was impacted by the events of Sept. 11. We understand the environment that we're in," said Jim Cullinan, Microsoft's lead project manager for XP. "But we think there's no better time to launch Windows XP."

The symbolism of the software may be more potent than its financial impact on the Redmond, Wash.-based company. The consumer personal-computer market accounts for only about 10 percent of the company's revenues, estimated to be roughly $28.5 billion this year. But Microsoft sees the product as ushering in the future of personal computing. Critics, however, contend it continues practices that violate anti-trust protections, such as bundling services and channeling consumers to related products.

"It's not going to have an earth-shattering financial impact, but the company is obviously financially healthy overall. People will eventually upgrade their computers. You'll need it sooner or later," said Henry Blodget, a Merrill Lynch Global Securities analyst.

Microsoft dubbed it "XP" - rather than name it after the year in which it's introduced as most other versions of Windows - to reflect its belief that XP will alter the computing "experience." Company executives say the difference between former versions of the operating system and the new one is like comparing black-and-white to color TV.

The software is being promoted as much faster and less prone to freeze up than previous Microsoft products. XP also aims to make it simple for users to file and access digital snapshots, to edit digital home videos, and compile and organize music on the computer.

Microsoft made the presentation as cheery and elementary as possible, short of being able to offer naptime and cookies and milk.

It designed the program with bold, primary colors, larger typefaces and "wallpaper" with a flowing green field beneath a crystalline blue sky. The need to make the system tidy and inviting was underscored by Microsoft's many focus group sessions around the country.

In early focus groups, Microsoft's Cullinan recalled one participant who became so flustered by all the icons flashing on the screen, she quickly turned off the computer assuming that she'd broken it. Another person froze when asked to send an e-mail, which Microsoft engineers assumed was a simple task.

"It was very humbling," Cullinan said. "The problem with the PC is it's just too hard to use. This will unleash even the novice to use it for a whole host of other things."

Technology experts point out that consumers struggled for years with their video-cassette recorders, which blinked "12:00" in living rooms across America in silent testimony to the bewilderment. They point out that even though personal computers are now in 60 percent of U.S. homes, they're mostly used the same as when they first became popular nearly a decade ago - as a typewriter, to play games, to surf the Internet and swap e-mail.

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