Windows Opens Door For Expansion Of Egghead Stores

Egghead Software’s move to Spokane will cost the company about $6 million, but Terence M. Strom and Egghead’s board of directors are convinced the long-term savings will more than offset the one-time moving expense.

But they have one big ace in the hole to help ease the temporary pain.

Windows 95, the long-awaited update of Microsoft’s popular personal computer operating system, will be released this month.

“We have budgeted to do about $80 million in incremental business in Windows 95, and related products that are sold along with it, in the six-month period following its release,” says Strom, Egghead’s president and chief executive officer.

The importance of Windows 95 to the entire computer industry worldwide, he says, cannot be underestimated.

“In real economic terms,” Strom says, “what it means is that almost any company selling computer hardware and software can look forward to two or three years of growth they would not have had without Windows 95. It is going to drive tremendous prosperity.

“For us, it will be the most important launch in our history, bar none.”

Thomas Carley, a computer industry analyst with Jensen Securities of Portland, agrees, and adds, “The lion’s share of the effect will be felt over the next six to nine months.”

Carley has followed Egghead more consistently than any other analyst over its history, and he likes what Windows 95 portends for the company.

To some extent, Windows 95 is driving Egghead’s move into the computer hardware business in its larger, new format stores.

“There’s a school of thought out there that says everybody who buys Windows 95 is going to want to buy memory upgrades, disk drive upgrades, etc., to really take advantage of what it can do,” Carly says.

“The key to success for companies like Egghead is just to be sure you get your share of that business,” he adds.

Since its inception, Egghead has dealt almost exclusively in sales of software. But in its drive to update and enlarge its retail outlets, it is moving to sell hardware as well.

“The traditional Egghead customer is really what is known in the industry as the non-first-time buyer,” Strom says. “Our customer base is made up of experienced users. So our hardware offerings are going to focus there as well.”

Rather than “entry-level equipment,” Egghead will carry the “step-up” equipment or upgrade components that personal computing veterans want.

Just the kind of things you’ll need to accommodate Windows 95.

Egghead has spent a year getting ready for Windows 95.

Egghead’s computers have been running on Windows 95 for a full year. The company has been doing extensive training so that everybody within Egghead is completely familiar with the new software.

For its own computers, Egghead has already invested in all the hardware upgrades.

“And like everybody else,” Strom says, “we are trying to make offers that are attractive to the customer so the customer will choose us instead of someone else to buy their Windows 95 from.”

Almost as important as Windows 95, Strom believes, will be Microsoft’s simultaneous launch of a new version of Microsoft Office software to run along with it.

The software package that runs office-related functions already dominates the market.

“There is going to be a huge number of companies, as well as individuals, who choose to buy both these products at the same time,” Strom says.

Strom is effusive about Windows 95. He points to its speed and simplicity as great improvements. But he says its most important feature is its far-reaching implications for the future of computers in our lives.

“As a computing machine, the computer is fairly mature,” Strom explains. “The development of the computer as a communications device is what computing is going to about over the next 10 to 15 years.

“Windows 95 has an awful lot of the glue that really enhances the communications ability of the computer. All that is built into this operating system.”

, DataTimes ILLUSTRATION: Graphic: Windows’ grip on market will tighten