BUSINESSWEEK ONLINE : FEBRUARY 22, 1999 ISSUE

   SPECIAL REPORT
   The Mother of All Software Projects
   Microsoft's Windows 2000 program is big. Really big. And it has
   problems to match


   Welcome to the software factory. Here, in buildings 9, 10, 26, 27, and
   28 on Microsoft Corp.'s sprawling Redmond (Wash.) campus, the
   company's mammoth Windows 2000 operating system is assembled and torn
   apart once every 24 hours.
   The ''daily build'' begins at 6 p.m. That's when engineering managers
   gather all of the new features and bug fixes that thousands of
   programmers produced during the day and bolt them together like so
   many auto parts. Twelve hours later--if all goes well--the build is
   done and quality assurance technicians take over. They test the code
   on 200 computers and ferret out anywhere from 250 to 400 new bugs.
   ''Triage'' teams comb over the bug reports and dole out assignments.
   Programmers type away all day in their rabbit-warren offices. Then, at
   6 p.m., the whole process begins again.
   It's a factory-style process, but this is no widget plant. With 30
   million lines of code, Windows 2000 is by far the largest and most
   complicated commercial software project ever undertaken--dwarfing even
   IBM's mainframe software. Microsoft's goal: to produce the first
   operating system that runs everything from laptops to ''dumb''
   terminals to huge back-office computers. To accomplish this, it's
   welding in pieces of software that rivals treat as separate programs.
   And because the process has been under way for so long--since
   1995--the design goals have shifted. Customers are demanding
   Internet-style software and more simplicity, adding to the time it
   takes to get it done. ''This is a monumental project,'' says analyst
   Jon Oltsik of market researcher Forrester Research Inc. ''It's the
   Panama Canal of software--but the oceans keep shifting on either side,
   too.''
   To Microsoft's critics, Win2000 is the ultimate act of hubris by a
   company they would like to see fall flat on its face. ''It's a
   cancerous growth of code,'' scoffs William N. Joy, a top scientist at
   Sun Microsystems Inc., whose Solaris operating system is about
   one-third as large. Linus Torvalds, creator of the Linux freeware
   operating system, calls the making of Win2000 ''witchcraft'' and
   predicts Microsoft will have to lop off some features if it ever hopes
   to get the product out the door.
   Microsoft's top engineers are growing accustomed to the sniping. Their
   response: a prickly we'll-show-'em attitude. ''We just keep focused on
   customers and quality, no matter what stones are thrown,'' snaps James
   E. Allchin, the senior vice-president in charge of Windows products.
   Still, Allchin admits that building Windows 2000 has been a
   soul-wrenching experience. ''One day I can be horribly depressed, and
   the next day we'll be in the clear again,'' he says.
   APRIL DEADLINE. The long and winding road has taken a toll. Moshe T.
   Dunie, a vice-president who had led the core engineering team, left on
   an unscheduled sabbatical in mid-December. ''He had been building
   Windows full-time for 12 years,'' explains Mike Nash, marketing
   director for server products. ''When you miss your kid's 12th piano
   recital in a row, you know you need a breather.''
   But there's no rest for the remainder of Microsoft's army of
   engineers. Dunie's replacement, Brian Valentine, 39, is a hard-driving
   individual who earned his reputation as a closer by delivering the
   company's hot-selling Exchange corporate E-mail package three years
   ago. He has set an ambitious deadline of Apr. 21 for releasing the
   third and final Win2000 test version to more than 250,000 testers
   worldwide. Feb. 15 is lock-down day: After that, no new features are
   to be added. ''The only way you ever stop is you stop changing the
   code,'' he says.
   Valentine has had no problem getting fired up for the job. He grew up
   poor in the sleepy town of Centralia, Wash. ''I have a nice
   perspective on what it means to be in charge of the most important
   project in the history of mankind,'' he says. With that kind of
   hyperbole at his command, it's no wonder Valentine has been able to
   get the rest of the crew pumped up--again. They had fallen into a
   morale slump in the autumn after working overtime to release the
   second test version last August. Two weeks after Valentine took the
   job, on Dec. 22, he assembled 3,000 engineers in the cavernous
   cafeteria of building 26 and delivered an old-fashioned halftime rant.
   WORKING HOLIDAY. It was nothing fancy. He laid out his 10 rules for
   success (Rule 1: Make decisions in 10 minutes) and his six rules for
   completing projects (Rule 1: Get into lock-down A.S.A.P.). He told
   them they were crossing the chasm from the design phase to release.
   And he told them how important the project is to Microsoft. The
   reaction? Cheers. Hundreds volunteered to work during the traditional
   one-week Christmas shutdown. ''For him it was something new and
   exciting, and that kind of energy spreads,'' says Frank Artale, one of
   the engineering managers.
   What's next? The grueling task of trying to make all the pieces of
   Win2000 work together, then work with the payroll, sales automation,
   and myriad other applications that customers are already using on
   thousands of different computers and peripheral devices. But quality
   isn't Microsoft's strong suit, according to Bruce M. Brown, who heads
   BugNet, an online service that tracks software bugs and their fixes.
   In the past, users have tagged bugs in the various versions of Windows
   faster than Microsoft could fix them.
   Microsoft is intent on improving quality. Today it employs one tester
   for every programmer, up about 30% from the mid-'90s. And it's
   enlisting the help of customers to ensure that this product doesn't
   deliver another blow to its already poor reputation. Under the
   so-called Rapid Deployment Program, 40 companies, including Merrill
   Lynch & Co. and Ernst & Young, test updates of Win2000 once a month
   and keep in touch with Microsoft daily via E-mail and phone. When the
   time comes, the companies get to vote on whether Microsoft sends out
   the third test version. ''If they can't deploy, there is no way we
   ship it,'' says Valentine.
   So far, Microsoft's rapid-deployment partners seem to be satisfied
   with its progress. ''I haven't seen anything break the system,'' says
   John Parkinson, chief technologist at Ernst & Young. Merrill Lynch has
   found plenty of bugs--but no major design flaws. Still, even these
   allies are concerned about whether Microsoft will be able to make all
   of its features work well enough to be included in the final product.
   Last summer, when test version two shipped, there were big pieces
   missing. ''There may not be enough software hours in a day to make it
   all work together,'' frets Gregor S. Bailar, chief information officer
   for the National Association of Securities Dealers, another tester.
   BEATING BUGS. That's a funny thing about software. The more code you
   produce, the more bugs you get--typically at least five per thousand
   lines of code. So the solution isn't just throwing more people at the
   problem. Even Microsoft's Allchin admits: ''We're on a treadmill.''
   But Microsoft claims it's making progress. Artale says the number of
   Win2000 bugs wiped out in a day recently exceeded the tally of new
   bugs.
   When will Windows 2000 finally ship? That's hard to predict. With such
   a complicated project, you never know when you'll run into a
   ''show-stopper'' that throws the schedule off. Microsoft is only
   saying it expects the big event to come before the end of the year.
   The pressure to deliver is intense--both internally and from
   customers. Valentine says he gets half a dozen E-mails a day from
   Microsoft Chairman William H. Gates III. But the core message is
   always the same: Don't ship Windows 2000 before its time. As the
   months go by, though, that may turn out to be a difficult order for
   Valentine to carry out.
   By Steve Hamm in Redmond, Wash., with Otis Port in New York


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