Microsoft Steps Up Efforts To Enter Network Market

Computer giant faces tough fight against more-established rival

COMPUTER experts are asking whether Microsoft Corporation can expand its empire upward from desktop computing into the world of corporate computer networks.

The market for linking computers together is huge, making this an alluring goal for the world's No. 1 software supplier. But analysts say getting there will be an uphill battle.

``It has been difficult for Microsoft to get off the desktop'' in past efforts, says Dan Ness, a senior analyst with C. I. InfoCorp, a San Diego market research firm. But Microsoft executives are right ``to branch out in as many ways as they can,'' he adds.

The company is already the dominant supplier of operating systems, the ground-level software for computers, and is a big player in applications, such as spreadsheets and other add-on programs. Microsoft is taking aim not only at broader business markets but also at the consumer market for entertainment and educational software.

Yesterday the company announced ``Microsoft Home,'' a line of video, sound, and text products such as an electronic encyclopedia, video games, and a movie guide.

Success is hardly guaranteed in these new ventures. The networking market will be particularly tough, since it already has a firmly established leader: Novell Inc. of Provo, Utah. Novell's NetWare products can tie many types of computers together.

Microsoft is trying to meet business network needs on several fronts:

* This fall the company shipped Windows NT, a new operating system with built-in networking features that compete directly with Novell. The NT software will typically reside on ``server'' machines at the center of a network of ``clients,'' made up of hundreds of computers.

* Yesterday Microsoft unveiled an upgrade of its low-end networking product, Windows for Workgroups. Where NT runs on costly machines with loads of memory, Windows for Workgroups is for personal computers. Special features allow the PC to link directly with others (with no central server) to share files and send messages in what is called a peer-to-peer network.

* Further down the road, Microsoft hopes to create a whole new form of business network. ``Microsoft at Work,'' announced in June, is a partnership with office-product companies aimed at integrating the use of phones, fax machines, desktop and portable computers, copiers, and printers.

Windows for Workgroups targets several markets: small firms that do not need costly client-server networks, or larger firms where the product can supplement existing networks. ``It allows you to make better use of all the PCs out on your corporate network,'' says Rogers Weed, product manager.

The program's original version has sold 1 million copies in a year, Microsoft announced yesterday. The product attained this landmark much faster than competing products made by Novell and Artisoft, Mr. Weed says. The upgraded version works more easily with Novell networks, offers faster networking, and adds new capabilities such as sending faxes.

Microsoft is pricing its new entries aggressively, with Windows for Workgroups selling at around $50 for current Windows users if they buy within 90 days of its introduction. Windows NT costs $1,495 per server, with free connections to all ``client'' machines using Microsoft operating systems.

``There's no question it's going to put pressure on Novell,'' says David Goldstein, president of Channel Marketing Corporation in Carrollton, Texas. With NT, Microsoft ``will compete harder with Novell than ever before,'' he says. But Novell has a two-thirds market share, which is ``theirs to lose,'' says George Colony, president of Forrester Research in Cambridge, Mass. ``NetWare is not terrific, but it's here and it's OK.''

Nordstrom, the Seattle retailer, is using NT to communicate data from machines in 17 stores back to its home office. ``We've found [it] to be very stable,'' says Larry Shaw, Nordstrom's PC coordinator. But he says software companies have been slow to come out with applications for NT.