INTERNET PLAYERS TO SHAKE "WINTEL" DOMINANCE IN COMING YEAR, KPMG EXPERTS SAY; Windows 95 May Not Rule in 96; Sun/Netscape Announcement Is First Shot in Upcoming Hardware and Software Wars

Business Wire, Dec 7, 1995

SAN FRANCISCO--(BUSINESS WIRE)--Dec. 7, 1995--Will Windows '95 dominate '96?

Not necessarily.

This week's announcement by Netscape and Sun Microsystems -- of plans to develop the Javascript programming language and distribute it free of charge -- is more than a bid for Internet leadership. It's the central element of a campaign to unseat industry giants Microsoft and Intel, and to establish the Internet itself as a rival operating environment, according to expert consultants from KPMG Peat Marwick's Information, Communications and Entertainment (ICE) practice.

Microsoft is due to announce its Internet counter-strategy today -- a strategy that may include licensing of Sun's Java programming language. But Microsoft's ultimate success may depend less on their Internet products, than on the larger question of whether future users will prefer to borrow computing power from the Internet or continue to own it themselves, the experts say.

"Netscape, Sun and their allies are gambling that the Internet will become a complete computing environment, so that Javascript, rather than Windows, will emerge as the operating system of choice," said Mary Pat McCarthy, national director of the KPMG ICE Software practice. "Their goal is to have tomorrow's networked applications built in Javascript.

"Microsoft will need to make a stand on the merits of its own Internet products, but this is a new field for Microsoft, and we know that in the past the company hasn't been universally successful in expanding into new areas -- a case in point is the failure of their attempted merger with Intuit," McCarthy said. "Of potentially more importance is the future of the Internet as a networked computing environment that could displace Windows/Intel and other platform-dependent environments. If the Internet wins out, Microsoft will not be the only company to be dealt a significant blow -- groupware publishers and products such as IBM's Lotus Notes, which runs on closed networks instead of the Net, would be particularly at risk."

The outcome could profoundly affect hardware manufacturers as well. "The Internet model provides the rationale for Oracle Systems and others who are advocating the notion that users will only require the equivalent of a `$500 PC' -- a stripped-down machine that connects you to the Net, where users can quickly access operating systems and software capabilities," says Ed Rodriguez, national director of the KPMG ICE Electronic Devices practice. Oracle is a partner in the Netscape/Sun project, as are other major hardware players including AT&T, Hewlett-Packard, Apple Computer and Silicon Graphics.

McCarthy, Rodriguez and other KPMG ICE experts are available to comment on this and other major computer-industry developments of 1995 and the prospects for 1996. To include them in year-end coverage, contact Andrea Gregg of KPMG ICE at (415) 951-7503 or Alan G. Ampolsk of Fleishman-Hillard, Inc. at (212) 265-9150.

One of KPMG's five industry-focused lines of business, the Information, Communications and Entertainment (ICE) practice provides assurance and advisory services to clients who produce content, distribution and delivery systems for the information superhighway. KPMG is the only assurance and advisory firm to dedicate a full-service line of business to these industries as a group.

KPMG Peat Marwick LLP is the U.S. practice of KPMG, the Global Leader among professional services firms. Worldwide, KPMG has more than 6,000 partners as well as 67,000 professional servicing clients through 1,100 office in 837 cities in 134 countries. In the U.S., KPMG partners and professionals deliver a wide range of value-added consulting, assurance, and tax services in five markets: financial services; manufacturing, retailing, and distribution; health care and life sciences; information, communications and entertainment; and public services.

CONTACT: Andrea Gregg, (415) 951-7503

or

Alan G. Ampolsk, (212) 265-9150