This week's launch of Windows 2000, sees Microsoft bolster its assault on the booming mid-range server business and accelerate its race to gain mind share with the world's largest enterprises. At stake for Microsoft is not only its ability to keep growing at the fairy-tale rate it has enjoyed for the past half-decade, but also its credibility in the crucial Internet server marketplace.

The new OS will help determine whether or not Microsoft remains dominant in the computing industry, analysts said. As the focus of IT computing shifts from local networks to the Internet, Microsoft will push Windows 2000 as a reliable platform for e-commerce sites and other Web-based applications and services. It faces stiff competition from the free Linux operating system, and a buoyant Apple readying the Unix-based Mac OS X.

"Windows 2000 is an operating system that is so critical for the overall success of Microsoft that it is hard to state it strongly enough," said Daniel Kusnetzky, program director at International Data Corp (IDC).

Top of the world Since the Windows NT 4.0 launch in 1996, Microsoft has bulldozed competitors in the departmental server business - most notably Novell and IBM - to help it report financial results that have wowed investors and made Microsoft a viable vendor in corporate back offices. Microsoft shipped more than 2 million copies of Windows NT in 1999, up almost 400,000 from 1998, according to IDC.

But its growth rate in the server OS market, although still strong, is tapering off, analysts said.

With the range of options now available, such as Linux and hosted applications, Microsoft won't be able to rely solely on the dominance of Windows with hardware manufacturers and ISVs to be successful, one analyst said.

"The transformation from being sort of stooges for Microsoft to being neutral operating system providers has been a dramatic shift over the past year," said Dwight Davis, an analyst at Summit Strategies. "No one is willing anymore to go blindly down the Windows path."

Pushy Microsoft is pushing Windows 2000 in the type of mid-range servers used to manage thousands of PC clients, run massive databases, and serve up busy e-commerce Web sites.

Currently dominated by Unix vendors, Microsoft has been largely locked out of the midrange market due to scalability and stability issues surrounding Windows NT. With Windows 2000, Microsoft hopes to change that, and it clearly has a ready audience.

"We found a lot of performance increases on our database servers and Web servers when we changed to Windows 2000," said David Banker, executive IT director at

Expectations are high, and after numerous delays Microsoft may get only one chance to prove itself, analysts said. IT managers won't look kindly on teething problems, and a string of early publicised failures could cause a setback.

"It is going to be on all of our students' desktops, and we'll have to support it," said John Carpenter, IT director at Georgetown University's business school, in Washington. "We are going to support it - good, bad, or ugly."

Windows 2000's close ties to new members of Microsoft's BackOffice family, due later this year, including SQL Server 2000 and Exchange 2000, intensify the pressure to make Windows 2000 a success, added Carl Howe, an analyst at Forrester Research.