Another Missed Deadline For Big Blue

Promises, promises. Lately, it seems that IBM makes as many of these as it does computers. Since last spring, for instance, Big Blue executives Lee Reiswig and Joseph M. Guglielmi have vowed regularly that IBM would ship an all-important new version of its personal-computer operating system, or basic control program, by the end of 1991. Now, in what could be a crushing blow to the software's prospects, they admit IBM will be unable, by the yearend deadline, to provide the system with a key capability that had been promised.

Hedging on the pledge is no small matter. IBM's credibility is central to its plan to regain control from former ally Microsoft Corp., the current purveyor of software standards. To PC owners, any delay is particularly disappointing because the promised software, OS/2 Version 2, would be the first to make today's most powerful PCs really hum. The new software would also run the spreadsheet and word-processing programs that users already have--the ones made for Microsoft's market-leading MS-DOS and Windows software.

Customers' expectations have been whipped up by the two IBMers' claims that OS/2 is "a better DOS than DOS and a better Windows than Windows." After hearing that, more than 20,000 customers at 2,000 companies have agreed to serve as testers for preliminary copies of the software--while waiting eagerly for the finished product. Now, IBM is saying that the new OS/2 won't be able to run Windows programs the way it should--at least not this year. To many, that's a letdown. Says a PC manager at a major Midwest manufacturing company: "The compelling reason why we'd want to use it in the first place is not there yet."

To be sure, some testers of the product give kudos to its features (chart). And Reiswig, assistant general manager for personal systems programming, says it's better to miss a deadline than skimp on quality. IBM will likely ship the new OS/2 by yearend, he adds, but without the advanced Windows capability. The finished goods will come later, maybe by March, and will be promptly sent to those who have paid for copies of OS/2, he says.

Nevertheless, IBM has little room for error, especially since the first version of OS/2 didn't catch on, and this go-around is widely viewed as OS/2's last stab at success. Says Forrester Research Inc. consultant Stuart Woodring: "There is a forfeiture of trust every time something like this happens."

MORE GRANDIOSE. The timing couldn't be worse. For one thing, IBM has planned a big bash to celebrate OS/2 2.0's completion at a giant trade show in mid-October. Then there's the portentous powwow on Oct. 2, when IBM officials are set to announce even more grandiose software plans--this time with newfound ally Apple Computer Inc. The Apple deal calls for an ultra-advanced operating system promised for the mid-1990s. Based on leading-edge technology called object-oriented programming, that project throws into question just how long IBM will be stressing OS/2.

Both the new OS/2 and the deal with Apple are aimed at the same thing: leapfrogging Microsoft by defining the way PCs of the future are used. That's crucial for both companies because profit margins are quickly shrinking. "PCs will soon be a commodity like color TVs," says Reiswig. "We have to provide the ability to take advantage of the hardware." That, he adds, comes through software.

Then again, IBM's news may not be as bad as it seems, since customers are becoming resigned to such delays. "With software, nothing is sure until you have it, and it works," says Sheldon J. Laube, Price Waterhouse chief information officer. But if IBM is to meet its aggressive goal of having 2 million happy users of its new OS/2 by the end of next year, it had better make good on its word, and fast.

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