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IDC: Windows 2000 Gathers Momentum

Microsoft Corp. is selling Windows 2000 at a good clip, and sales should accelerate across all versions of the new OS in 2001, according to newly published research from market analysis firm IDC.

"This is the first quarter that Windows 2000 shipments will exceed Windows NT shipments, and that gives you an indication that the product is growing nicely for Microsoft," says Al Gillen, manager of IDC’s System Software research. "This is above our previous expectations for the product, which were quite conservative."

Windows 2000 shipments will outpace Windows NT shipments by 1.7 million units during the fourth quarter of this year, according to IDC. The analyst firm projects that by the end of 2001, Windows 2000 shipments could account for almost 71 percent of all combined Windows NT and Windows 2000 shipments.

Gillen says the majority of the transition to Windows 2000 is taking place now or in the next 12-18 months.

The independent research figures are especially significant because Microsoft has remained mum on Windows 2000 license shipments since June. Microsoft spokespeople declined to respond to requests from ENT for comment on the IDC report.

As expected, the vast majority of shipments of Windows 2000 so far involve client versions rather than servers, a fact IDC partially attributes to IT’s reluctance to migrate servers to new technology unless absolutely necessary.

But server shipments are beginning to pick up. IDC projects that adoption of Windows 2000 Server will account for approximately 35 percent of all Windows server shipments during December, compared with just 16 percent for all of 2000. By the end of 2001, Windows 2000 Server should account for 56 percent of total Windows server shipments.

"I think one of the factors that is helping Windows 2000 shipments is Microsoft’s downgrade license," Gillen says. The downgrade license allows an enterprise to buy a license for Windows 2000, but to deploy a Windows NT Server that can be upgraded at any time. "What are people actually deploying? I don’t know and Microsoft doesn’t know either."

Gating server shipments is the complexity of Active Directory deployments required to fully roll out Windows 2000 Server, Gillen says. Most Active Directory deployments seem to be happening at new companies where there is no existing infrastructure to contend with, he says. Windows 2000 servers being bought by companies with existing Windows NT 4.0 domains seem to be filling member server roles.

IDC paints a bright picture for Windows 2000 Professional deployments. The projection is that by the end of this year, Windows 2000 Professional shipments will already account for more than 40 percent of combined Windows 2000 Professional and Windows NT Workstation shipments. By the end of 2001, Windows 2000 Professional’s share will jump to 72 percent.

"There are numerous reasons for this fast acceptance, including support for new hardware technologies that Windows NT Workstation 4.0 didn’t offer, such as universal serial bus, advanced power management, and plug-and-play support that really works," Gillen said.

IDC has not yet published research on the extent to which Windows 2000 Professional is eating into Windows 98 sales or deployments. Microsoft intends for Windows 2000 Professional to replace Windows NT 4.0 Workstation clients and Windows 98 business desktops. The follow-on to Windows 98, Windows ME, is not intended as a business client.

Microsoft has not discussed Windows 2000 shipments since late June. At that point, the company reported selling 3 million units of Windows 2000, not counting enterprise agreements. At a recent meeting of financial analysts, Microsoft CFO John Connors promised that Microsoft would be making a momentum announcement about Windows 2000 licenses at Comdex, but that announcement never came. -- Isaac Slepner and

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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