Volume discounts to end for consumer Windows

Steering enterprise customers away from the Windows 9x line and toward Windows 2000, Microsoft by mid-2001 will no longer offer volume licensing for Windows 9x or Windows Me.

          Steering enterprise customers away from the Windows 9x line and toward Windows 2000, Microsoft by mid-2001 will no longer offer volume licensing for the Windows 9x or Windows Me versions of the operating system.

          Microsoft will end volume licensing for Windows Me, the latest iteration of the consumer version of the operating system, on March 1, according to the company. Volume licensing for Windows 95 and Windows 98 will end on June 30. The Consumer Windows Upgrade Advantage program will be curtailed at the end of December.

          "It seems like a less than subtle way to push people toward Windows 2000," said Dwight Davis, a Kirkland, Wash.-based analyst at Summit Strategies. "Microsoft clearly walked into this knowing they're going to get flack from a lot of people."

          Simon Hughes, a program manager for Microsoft volume licensing, said the moves stem from the company's research, which indicates that enterprises are adopting Windows 2000 Professional at a brisk clip and that instances of corporate use of the Windows 9x versions are rapidly decreasing.

          "The overwhelming majority of volume-licensing customers have been purchasing Windows 2000 Professional since its launch in February 2000," Hughes said. "There have been hardly any purchases of Windows Me through our volume licensing."

          Hughes said customers who have "specific business needs" and still want to buy Windows 95 and Windows 98 volume licenses can pre-purchase them before the deadlines and deploy them afterward, or they can secure "downgrade rights" by buying Windows 2000 Professional and later deploying a Windows 9x operating system.

          The announcement came one day after officials from the Redmond, Wash. company warned that its revenues and earnings would not meet expectations for the quarter. However, CFO John Connors asserted that Windows 2000 sales were meeting the company's expectations.

          While Hughes insisted that corporations were following Microsoft's advice to use Windows 2000 Professional and leave Windows 95, Windows 98, and Windows Me to consumers, he could not provide enterprise adoption rates for the various operating systems.

          Earlier this month, IDC issued a study that said that Windows 2000 shipments will account for almost 71 percent of all Windows NT and Windows 2000 shipments by the end of 2001. By the end of 2000, Windows 2000 Professional shipments will account for more than 40 percent of Windows 2000-Windows NT shipments, IDC said.

          Davis added that Microsoft has made efforts over the last two years to simplify the volume-licensing schema and better explain it to customers, but the structure still is "convoluted."

          (Additional reporting by Tom Sullivan)

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