Microsoft Serves Up A New Operating System

With resource-strapped companies continuing to scrutinize every IT dollar, is this the right time to introduce a new server operating system? That's a question Steve Ballmer says he's been asked a lot recently--and one he'll soon be able to answer.

Microsoft last week introduced Windows Server 2003, an operating system that addresses some of the shortcomings of Windows 2000 Server and one CEO Ballmer promises will let companies "do more with less" via performance improvements and new features that translate into increased productivity.

In an interview with InformationWeek, Ballmer said across-the-board improvements to the operating system, resulting in better reliability, security, and manageability, will be key in driving adoption. "The foundation is better," he says. (For a transcript of the conversation, visit informationweek.com/937/ballmer.htm.)

The company touted new benchmarks that show Hewlett-Packard and NEC systems taking the top two spots in the Transaction Processing Performance Council's rankings for unclustered systems as proof of the platform's sheer speed. Intel president Paul Otellini says versions of Itanium due in the next two years will result in machines that double or triple those results.

The increased scalability should help Microsoft better address the trend toward server consolidation, IDC analyst Jean Bozman says. "Companies are adding capacity. They're still doing that in the downturn."

Cigna Corp. is in the process of moving an application that supports other companies that use its employee-benefits services from 14 Windows NT servers to 10 servers running Windows Server 2003. That's made possible by Windows Server 2003's improved application pooling, clustering, and resource management, says Jeff O'Dell, the insurer's VP of technology planning and architecture. With 2,600 Windows servers in production, Cigna could eliminate 500 servers if similar reductions take place across the company. The project is part of Cigna's effort to cut IT costs. "We know intuitively that reducing servers will result in lower costs," O'Dell says.

Continental Airlines Inc. moved several pieces of its reservation system to Windows 2000 servers, which are now being upgraded to Windows Server 2003. "We're reducing our dependence on the mainframe in small chunks," says CIO Janet Wejman.

Ballmer admits he's not sure how quickly Microsoft's customers will make the move to Windows Server 2003. "IT professionals occasionally adopt an attitude, 'If it ain't broke, don't fix it,'" he says. In particular, Microsoft is aiming Windows Server 2003 at companies still running Windows NT. "In this climate," says Ballmer, "some of those might get left alone."

Mike Cherry, an analyst at research firm Directions on Microsoft, expects Windows Server 2003's adoption to be slow because many businesses are hard-pressed to take on upgrades. The answer to whether now is a good time for a new operating system may depend on whether Microsoft's customers can swallow the cost in such constrained times.

Photo by Jeff Christensen