Msft will end support for 98 and nt

Microsoft Bails Out The PC Market
Lisa DiCarlo, 01.07.03, 7:00 AM ET

NEW YORK - This summer, millions of businesspeople will be upgraded against their will. And no, we don't mean their flight plans.

Microsoft (nasdaq: MSFT - news - people ) will officially end technical support for Windows 98 and Windows NT 4 on June 30. The financial implications for Microsoft and others could be significant, even in the short term.
Pacific Crest Equities estimates there are 300 million PCs worldwide running these older operating systems--195 million in corporations and 105 million in homes.

Pacific analyst Brendan Barnicle believes that 25% of these enterprise customers and 17% of home PC buyers will replace their systems in the first half of this year, leading him to raise his earnings-per-share estimate for Microsoft's fiscal third quarter, which ends March 30, by 2 cents, to 49 cents. Consensus estimate for the quarter is 47 cents per share.

Barnicle also estimates that 150 million users are running older versions of Microsoft Office, which will not work well with newer versions of Windows. A massive upgrade of Office would be a boon to Microsoft, since at times it has been the most profitable product the company sells. The phaseout is within Microsoft's usual support framework.

Barnicle is optimistic about a relatively swift corporate upgrade cycle, since "an organization's livelihood might depend" on running the latest software, he says.

Microsoft will announce its fiscal second-quarter numbers on Jan. 16. In October, the company said to expect sales of $8.5 billion to $8.6 billion, up from $7.7 billion in the year-ago quarter.

Corporate and home users will not be forced to upgrade to new PCs--they can run old software on old PCs as long as they want--but the lack of technical support, including patches and upgrades, should spark the replacement cycle.

PC companies, such as Dell Computer (nasdaq: DELL - news - people ), Hewlett-Packard (nyse: HPQ - news - people ) and ailing Gateway (nyse: GTW - news - people ), would benefit from a new cycle, as would Intel (nasdaq: INTC - news - people ).

The industry has not had a significant upgrade cycle since 1999, when businesses replaced older systems with year 2000-compliant models. Since then, companies have tried everything under the sun to promote sales, including two-for-one offers, free vacations, and PCs packed to the gills with bells and whistles.

Looks like the answer will be a lot simpler than that.

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They may end support for 98, but I aint upgrading to XP, ever. I might consider 2K, but that'd be it. Does 2K support USB and firewire?