Institutional investors are expected to be slow to adopt Microsoft Corp.'s Windows 95, despite the publicity avalanche that precedes its Aug. 24 release.
The new computer operating system - predicted to be immediately popular with consumers - is still being evaluated by the investment community.
A survey of institutional clients by Northern Trust Co., Chicago, found only 13% plan to install Windows 95 upon its release. Seventy-six of 309 Northern Trust clients responded to the survey, said Elisa Spain, manager of the product group at Northern Trust. Most of its clients, 67%, use the current Windows version.
"Whenever new products like Windows 95 come out, there is a lot of hoopla and people get churned up about it. But in reality, the adoption of operating systems (at companies) doesn't happen overnight," said Carey Azzara, manager for demand side research at International Data Corp., a market research firm for information technology in Framingham, Mass.
Some companies - including Northern Trust and the investment management group at State Street Bank & Trust Co., Boston - seem to prefer Windows NT for internal use. Windows NT has advanced security features not found in Windows 95 and has been on the market since 1993. Windows NT Advanced Server 3.5 provides centralized network management features. It also can run on RISC and Alpha processors, making it great for networking.
The active equity money management firm Beutel, Goodman Capital Management, Houston, will continue to use Windows for Workgroups, which has the familiar Windows interface and is bundled with most new computers now. Any change is probably a year away, said Jennifer Snyder, a compliance coordinator and a member of Beutel Goodman's management information specialist department.
"We are very happy with it," she said of the existing software.
Others said they are testing Windows 95 with competing products. Even if they adopt Windows 95, it's unlikely it will be installed before early 1996, they predicted.
Mellon Trust Co., Pittsburgh, appears to be leaning toward Windows NT for internal use in its institutional division, although Mellon officials are testing Windows 95, said James Dever, a media relations specialist at Mellon.
Officials at IDS Advisory Group Inc., Minneapolis, primarily a domestic equity investment firm, are still evaluating Windows 95 - as well as Windows NT and OS/2, an operating system of IBM Corp., Armonk, N.Y.
At consultant Frank Russell Co., Tacoma, Wash., officials continue to evaluate Windows NT and Windows 95. Russell might use a mix of both programs, but probably not before 1996.
The investment management division of State Street Bank adopted Windows NT. However, all the other departments at State Street are still evaluating Windows 95 and Windows NT in a collaborative effort, said Thomas E. Stenson, assistant vice president of network planning and management.
Meanwhile, State Street, Northern Trust and Russell are preparing to meet the software compatibility needs of any client that immediately adopts Windows 95.
Some reasons behind hesitancy to immediately adopt Windows 95 include compatibility problems with current software as well as potential programming problems in the first release of Windows 95.
"I never buy new products because of the bugs in them and other problems," said Beutel Goodman's Ms. Snyder.
Bugs - programming errors commonly found in new software even after extensive testing - can cause computer programs to freeze, behave erratically or even produce information errors.
Even if IDS Advisory adopts Windows 95, the firm won't use "the first rollout," said Tom Brakke, a senior portfolio manager. Mr. Brakke said IDS will wait for a bug fix, which will probably come in the first quarter of 1996.
Richard A. Duncan, manager of system research and planning at Russell, concurred: "We will not be moving to Windows 95 on Aug. 25. I can assure you of that," he said. Mr. Duncan expects a second version of Windows 95 in early 1996.
A second concern is existing software made by independent vendors might not run flawlessly on Windows 95. People don't want operation disruptions, even if they're not big problems, noted State Street Bank's Mr. Stenson.
Many companies have different computer operating environments - different networking products, different hardware, in-house written code, etc. - so a problem could develop when using a new piece of software even when it isn't Microsoft's fault, said Mr. Stenson.
Another reason for not using Windows 95 is that some companies prefer Window's NT security features. Security can be a critical issue for companies that typically run graphical operating systems on networks. Some computer experts also believe Windows NT has better crash protection when using multiple applications simultaneously.
To take full advantage of Windows 95's speed, software specifically written for the new version is necessary; upgrading will be an expense. Another expense will be random access memory (RAM) - Windows 95 needs about 16 megabytes to run effectively, while most computers have four to eight megabytes. Windows 95 is expected to run best using a 486DX2-66 or the faster Intel Corp. Pentium processor.
Some corporate managers of information systems estimate it will cost $500 to $1,000 per machine to upgrade an older computer for Windows 95. The upgrade doesn't sound like much unless you have 50 or 200 or more computers to upgrade.
But even though members of the investment community aren't rushing to install Windows 95 on company computers yet, some of them say they like its features.
A key reason for Mr. Brakke is multitasking; Windows 95 can run 15 or more programs at once, he said. With Windows 3.1, he said, he can only run seven programs at most at once.
As a portfolio manager, Mr. Brakke needs to look at and run in-house customized software programs, communication programs, news and information service programs, core word processing and spreadsheet programs, charting and other programs simultaneously. It takes time, and is aggravating, said Mr. Brakke, to have to keep opening and closing programs.
Windows 95 also supports plug and play, making it easier to add peripherals, and permits file names up to 255 characters instead of the current limit of 11 characters.