Companies Slow To Leap To Windows 95 Leisurely Transition Places Software Developers In A Bind

Software companies that hitched their futures to the Windows 95 star have begun reporting that their financial results have crashed to the ground.

Fourth-quarter sales numbers are rolling in, and market strategists who bet heavily on Windows 95 as an instant success are reaching for the Maalox as they read the reports.

It’s not that Windows 95 is a failure; it isn’t. Some analysts even call the operating system a success, albeit it a more slow-moving one than some had expected. It is just that consumers and corporations have refrained from “upgrading” their older, slower computers with Windows 95, waiting until they buy newer, more powerful computers better suited to the Windows 95 environment.

Windows 95, released last August by Microsoft Corp., is the “interface” computer users use to run all other software applications.

“It is still the largest software product done in the industry to this point,” said Dave Tremblay, an analyst at Computer Intelligence Infocorp. “We’re estimating that they’ve got something on the order of 17 million units out there already, and that’s not chicken feed.”

Other analysts were less generous in their estimates of how many computers are using Windows 95 now. Alfred Tobia with Schroder Wertheim & Co. estimated that far fewer than 17 million - perhaps only 12 million - run the new “32-bit” operating system.

Either way, Tremblay said, the problem is that corporate America has hesitated to make the leap from Microsoft’s previous operating system, Windows 3.1, to Windows 95.

“It’s not becoming the corporate desktop, and that has some people worried,” Tremblay said. “There are still people out there running DOS, however many years after Windows 3 was launched and they have their reasons. … They don’t need the new applications. The PC they have in place won’t run a new operating system. They’re not willing to invest the money.

“Those same things apply to this switch to Windows 95.”

While a number of software companies have hung part of the blame for their lackluster performance on the slower-than-expected transition to Windows 95, graphics software maker Corel Corp. was one of the few that bet everything on it.

Corel decided last year to begin developing only 32-bit software packages which need Microsoft’s more powerful Windows 95, or its high-end cousin Windows NT, to work. Both Windows 95 and Windows NT also require more powerful computers with larger amounts of computer memory than what is needed in 3.1

Although official sales figures won’t be released until Monday, some analysts estimate that Corel took in only $61 million during a quarter for which they had been expected to bring in $76 million.

Corel placed the blame for its lackluster sales not on its primary product, DRAW! 6, but on Windows 95.

“People are holding on until they make a decision about Windows 95,” spokeswoman Fiona Rochester said. “I think some customers are not yet prepared to make the hardware or memory investment. We expected the transition to be more rapid and would have enjoyed it, but we’re confident that there will be continued momentum toward Windows 95 and Windows NT.”

But after Symantec Corp. announced last week that it also would have “terrible” quarterly results because of slow sales of utilities - which are software “tools” such as anti-virus programs - for Windows 95, chief executive Gordon Eubanks refused to blame Microsoft or its operating system for his company’s woes.

“This is driving me crazy. I’m not blaming Microsoft. I’m blaming Symantec,” Eubanks said. “People don’t get it that Windows 95 is selling great. It’s just that we had a higher forecast for sales of our products than we managed to meet.

“We’ll be in great shape down the road as corporations adopt a 32-bit operating system.”