Microsoft has been heavily criticized for repeated delays that pushed Windows 2000's expected delivery back by more than a year, into the second half of 1999, when many companies plan to freeze computer purchases while they assess the Y2K issues. When revenue from Windows 2000 will show up on Microsoft's books depends on when it starts shipping the software to PC companies. Maffei cautioned analysts not to factor in any significant boost in revenue from sales of the new operating system at all during the fiscal year 2000. The reason for this is that the transition for corporate customers will occur slowly, although Maffei noted that PC manufacturers offering workstations and notebooks for corporate customers will be quick to offer the new product. Maffei also addressed questions about the growing interest in Web-based applications and application service providers, or ASPs.
ASPs offer smaller customers the option to rent access to software online instead of buying it.
Software as a service is a reality. However, he said it will be two to three years before this trend starts to have an impact on Microsoft's core market of high-end corporate accounts because of the technical limitations of the software rental market. Microsoft will experiment with a variety of strategies in this evolving market, he said, which could possibly include everything from simply providing software to ASPs, to hosting applications itself and offering connections to that software for customers, like Intel is doing. Other clouds are looming over the company. During the quarter, Microsoft lawyers were busy making closing arguments in the antitrust trial brought against the company by the Justice Department.