What’s cool? Why, IBM, of course -a-nd the latest version of its OS/2 operating system for personal computers, called Warp. If “getting warped” sounds weird. then you’ve somehow missed Big Blue’s multimillion-dollar advertising blitz. Since last fall the company has waged an all-out campaign to get PC users to switch the software that runs their computers. For most people that’s long been Windows, the dominant operating system from Microsoft Corp. Now, after years of effort, IBM has a slender chance to loosen its rival’s lock on the market. Microsoft won’t release its long-awaited upgrade, Windows 95, for at least five months. If IBM in the meantime can convince lots of buyers that it already offers something better, it will take another big step toward reclaiming its place as a leader of the computer industry. But that’s a big “if.”
IBM has been playing catchup since 1989, when it ended a joint venture with Microsoft to develop a common operating system. Windows took off. thanks partly to Microsoft’s diligent wooing of software developers. OS/2 languished, despite IBM spending roughly $2 billion on it. Fewer than 6 million copies are in use today, according to analysts, compared with 65 million for Windows. And while Microsoft holds roughly 80 percent of the market for desktop operating systems, OS/2 garners 4 percent at best. Will Warp alter that imbalance? Not everyone is as optimistic as IBM. Windows 95 is expected to sell between 20 million and 30 million copies in its first year; Warp will do well to sell 5 million. “There’s no silver lining to this cloud,” says Rob Enderle at Dataquest in San Jose. He thinks sales of OS/2 will nose-dive as soon as Windows 95 comes out. By the end of next year, he predicts, IBM will have pulled the plug on its money-losing system and “OS/2 will die a quiet death.”
Certainly IBM faces enormous challenges. For one thing, most software developers aren’t writing for OS/2. For another, programs written for Windows 95 won’t run on Warp. Considering that the entire industry is scrambling to rework its software in time for Microsoft’s August release, that’s a major drawback. Last week brought yet another problem: reports that IBM has failed to complete a finished version Of OS/2 for its highly touted PowerPC, the next-generation computer scheduled to come out this spring or summer. IBM isn’t saying why; industry insiders cite unspecified technical difficulties.
That’s too bad, for OS/2 has a lot going for it. Many experts rate it more highly than versions of Windows 95 they have tested. “It’s flat out better,” say; Silicon Valley consultant Mark Macgillivray. Last month the trade publication InfoWorld named OS/2 its Product of the Year. One reason is that IBM has loaded it with features Windows 95 won’t have, such as “point and click” access to the Internet. Warp runs on four megabytes of memory; Windows 95 generally requires eight, making it less compatible with older PCs. It’s snazzy, quick, easy to use. New multimedia, video and faxing capabilities are built in, and IBM claims it will be better than its rival-to-come at running several programs simultaneously-so-called “multitasking.” That means users will no longer have to wait to finish one task in a particular application before going on to the next, eliminating a lot of long waits (and frustration) at the keyboard.
IBM is trying hard to boost sales. Its ads portray Warp (the name is so trendily Trekkie) as an operating system for everyone, whether they’re sophisticated power-users or the most technologically challenged novices. IBM is no longer just going after big corporations, either. It’s targeting small businesses and the home. Last month, IBM announced it would install Warp on most of its own PCs. (Some 3.9 million were shipped last year.) That might ordinarily make a market, but for one hitch: the software will be “dual loaded” with Windows. Buyers will choose which of the competing operating systems they prefer, and experts bet most will opt for familiar Microsoft.
That highlights yet another hurdle. So far, not a single major U.S. computer maker “bundles” OS/2 with its computers, as most do with Windows. That automatically limits IBM’s market, says Tim Bajarin at Creative Strategies International, characterizing Warp’s future as “cloudy at best.” IBM tries to put the best face on this harsh reality. Several European companies are bundling Warp. “They value technological superiority,” says marketing director Wally Casey. He adds that IBM will also “consider” reworking Warp to be compatible with Windows 95. Casey dismisses the task as not daunting," though some experts say it could in fact take years.
That hesitancy may give a clue to IBM’s real strategy. “Officially, IBM is saying, ‘We’re 100 percent behind this thing’,” says one industry insider. “Unofficially, it’s watching to see how Windows 95 performs.” if it takes off, this source adds, IBM may rethink its commitment to Warp. If Big Blue’s software fails to grab a significant share of the market -some analysts put the bar at 10 percent–IBM might decide it can’t afford further development and opt instead to maintain Warp as a niche product. That would be an embarrassment. But then again, it won’t be the first time a company has lost to Microsoft.
