Chances are it's a safe bet. While Microsoft concedes that Windows NT servers won't replace the world's supply of mainframe computers anytime soon, Jeffrey S. Raikes, Microsoft's group vice-president for sales and marketing, predicts that in the next few years, NT could unseat IBM's stalwart AS/400 minicomputer--a $3.4 billion annual business. By selling NT, Office 97, and a suite of networking software called BackOffice, Raikes' goal is to increase Microsoft's average annual revenues per corporate computer user from less than $150 today to more than $200 in the next two years. Analysts like what they see. They predict the software maker will sell $5 billion worth of NT and BackOffice by 2000, double what's expected this fiscal year. ''Today, we see Microsoft software at the heart of almost every desktop,'' says analyst Neil Herman of Salomon Smith Barney. ''In 10 years, we'll see Microsoft software at the heart of 90% of the servers out there, too.'' One company already feeling the heat is Netscape. On Jan. 5, the Silicon Valley highflier announced that its quarterly sales would be $125 million to $130 million--well below the $165 million analysts had expected. Worse, it will report its first loss in nine quarters. The reason: Netscape's server and browser sales are down because of stiff competition from Microsoft and IBM (page 69). ''Microsoft is the primary cause of Netscape's problems,'' says analyst Bruce D. Smith of Merrill Lynch & Co. That doesn't mean Microsoft will own enterprise. The operating system accounts for just 20% of the installed base of computer servers. And for the rest of that business Microsoft faces a revitalized IBM that is well entrenched in Corporate America and becoming a formidable competitor on the Net. After stumbling in the early '90s, IBM has made a remarkable comeback by using PC technology to sell mainframe computers costing less than one-tenth what customers paid in the late 1980s. That has kept many major customers true blue. Database giant Oracle also has an incredibly loyal following. It has 39% of that sector, vs. less than 4% for Microsoft's SQL Server. Microsoft's database software is still seen as not powerful enough to handle the really big jobs at giant corporations. ''Microsoft has given their database away, but it hasn't helped--because their database isn't any good,'' says Oracle's Ellison. And then there's Java. Sun Microsystems' much hyped programming language offers the prospect of an alternative to Windows, since applications written in it can run on any operating system. So far, Microsoft has convinced hundreds of corporate customers that they can save money by running even their biggest jobs on NT. But many companies still have millions invested in mainframes, and moving everything to Windows could take years. Java offers an alternative. This software--used to write other programs--runs on a variety of computer architectures. That helps it to act as a digital glue for creating programs that allow companies to use existing software, such as mainframe programs, while still tapping into new Internet businesses. Early this year, Java will get better yet. Improved security and performance could make it more appealing to use on a slew of devices. ''Between Java cards and Java rings and Java phones and Java set-top boxes and Java everything else, we're going to destroy them on unit volume,'' predicts Sun CEO Scott G. McNealy. For all this, analysts don't see Java replacing Windows anytime soon. The 700,000 software developers using Java pales next to the 4.5 million that Windows claims. Even John F. Andrews, chief information officer for transportation giant CSX Corp. and a huge Java fan, says: ''Java's a punch, but it's not a knockout.'' That's because Microsoft is well protected. Many corporations have already standardized on Windows and its desktop applications. So now, they're interested in buying software from Microsoft that can help tie their computer systems together more simply and run their large databases, accounting systems, and manufacturing operations. ''The plan ultimately is to run everything on one platform. That's the carrot out there,'' says Dean Halley, an information-systems executive at Credit Suisse First Boston Corp. THE INTERNET When it comes to new markets, none is as vast and potentially lucrative as the Internet. Analysts predict that Net revenues from software and commerce will reach dizzying heights--as much as $100 billion by 2000. And no single company is investing so much or so broadly--or holds as many of the pieces--as Microsoft. In the two years since it vowed to become a leader in cyberspace, Microsoft has been true to its word. The most visible proof is Internet Explorer. Since releasing the first version of IE a little more than two years ago, Microsoft has jetted from zero to 40% of the market. Moreover, if the software maker's plans to weave the browser into Windows 98 go unhampered by the Justice Dept., analysts expect IE to shoot past market leader Netscape to become No.1 this year. Microsoft's browser has one huge draw: It's free. Cash-rich Microsoft can afford such tactics, while scrappy rivals such as Netscape have to charge a few dollars. And that can make a difference. Internet service provider Concentric Network Corp., for example, switched from Netscape's browser to IE over price. ''We're operating on slim margins, so it matters,'' says Vice-President James Isaacs. That has sent Netscape looking for more lucrative server business. ''If I had to depend on the browser for profits, I'd be flat-ass broke,'' says Netscape CEO James L. Barksdale. In the face of a loss for the quarter, Netscape may be forced to match Microsoft's giveaway strategy. Internet Explorer is just the tip of the iceberg. Across the board, Microsoft is making the Net its No.1 priority. ''It's hard to think of much that we're doing that isn't influenced by the Internet,'' says Gates. ''All of our software is very tied up in helping people use the Internet in a better way.'' That includes deep-pocketed corporate customers. As they refashion their businesses around the Internet, Microsoft is out to make sure that Windows NT will be the software of choice. In the past few months, Microsoft has updated all of its corporate software to boost the latest Internet features. BackOffice, for example, now includes Commerce Server, specialized software that companies such as Barnes & Noble Inc. and Dell Computer Corp. use to run their online sales operations. As it does in the browser market, Microsoft gives away much of its basic Internet server software. It packages Internet programs, such as Site Server for managing Web sites, with BackOffice at no additional cost. And each copy of NT includes Internet Information Server, a basic Web-server program. That has helped catapult Microsoft's share of Web and corporate intranet servers to 55%, with all rival Unix makers combined at No.2, with a 36% share. The Net initiatives that draw the most attention, though, are Microsoft's attempts at building new Web-style businesses. It has set up 16 Web sites for everything from online investing to travel reservations to home buying. Some of these Web sites are already leaders in their categories. Microsoft's Expedia is in a dead heat with Preview Travel and Travelocity for the top spot in online travel, with more than $2 million in bookings a week. CarPoint has quickly become a popular spot for car buyers. This year, CarPoint is expected to begin offering insurance and financing services that will make it a one-stop shop for auto needs. Forrester Research Inc. predicts that CarPoint will rack up sales of $10 million a month within a couple of years. MSNBC, Microsoft's news venture with NBC, ranks third--after Softbank's news site ZDNet, and Walt Disney's site--in the most recent PC Meter Survey of Web-site viewership in the news, information, and entertainment category. Microsoft plans to launch a couple of new sites this year. One, code-named Boardwalk, will let home buyers shop for real estate and mortgages. The other is an online bill-paying service that will be operated as a joint venture with First Data Corp. ''There will be three or four major networks on the Internet, and we expect to be one of them,'' says Jeff Sanderson, general manager for Microsoft Network, the software giant's online service. By some measures, Microsoft is already there. PC Meter rates Microsoft's 16 Web sites combined as No.4 in its monthly survey--behind only America Online, Yahoo!, and Netscape. LOCAL UPRISING. The prospect of Microsoft entering everything from travel to car sales has put competitors on alert. Indeed, even a rumor of Microsoft's imminent arrival can jolt formerly complacent industries into action. Take newspaper publishers. Last year, when Microsoft announced it would launch Sidewalk, a series of Web sites offering local-entertainment listings, newspaper publishers geared up to protect their $24 billion in annual local advertising. Some 136 newspapers signed up with Zip2 Corp., a Mountain View (Calif.) supplier of online publishing technology that helps publishers create electronic versions of their newspapers. ''Microsoft tries to scare people into giving up, but it's just not working,'' says Zip2 CEO Rich Sorkin, who claims that his combined newspaper sites are racking up 8 million viewers a month--nearly triple the traffic Microsoft's 10 Sidewalk sites are drawing. So are critics' fears founded? Gates claims Microsoft has no grand plan to control the Net. What's more, not all of his Web ventures have been hits. Microsoft Network, the company's online service, has failed to live up to its early hype. LONG-TERM VIEW. While some of these new business are starting to pay off, Microsoft views the estimated $250 million a year it spends on Web sites as an investment in the future. ''Anybody involved in this is projecting out 5 to 10 years and asking what can they start to build now that can become more valuable as the Internet becomes more mainstream,'' says Gates. For that reason, Microsoft's biggest Web opportunity may lie in doing what it does best--creating software for others to use and build upon. It has begun selling its online travel software to airlines, including Northwest Airlines Corp. and Continental Airlines Inc. And American Express Co. is selling travel services to corporations based on Microsoft software called Microsoft Travel Technologies. ''They paid us quite a bit for that,'' says Gates. The potential looks huge: American Express Interactive is being rolled out in 20 large corporations, including Monsanto and Chrysler. An additional 180 companies will be using it by the end of 1998. All told, these companies represent more than $5 billion in yearly travel purchases, according to Microsoft's Richard Barton, general manager of Expedia. Still, it is unlikely that Microsoft will dominate the Web the way it has PC software. For one, it must compete against the giants in their fields, be they bankers, stock brokerages, real estate empires, auto makers, or travel agents. And the Web is still a work in progress, with new sites and opportunities popping up every day. Even with Windows as a starting point for most computer users, ''everything else is just a click away,'' says Bill Bass, a new-media analyst for Forrester Research. For his part, Gates doesn't show any willingness to let up to placate his critics or government investigators. And there's no sign in Redmond of complacency. In fact, Gates sees threats all around--even from operating systems that few people have ever heard of and Web sites that haven't been created yet. The key for Microsoft, he says, is satisfying customers, innovating, and keeping prices low. ''If we don't do all of these things,'' says its 43-year-old chairman, ''Microsoft will be replaced.'' It's that sort of paranoia that has enabled Mircosoft to survive and thrive. It's possible, of course, that competitors will blunt his new attack in at least some areas. But unless the government succeeds in a full-scale antitrust assault, Bill Gates and Microsoft are destined to become a still more potent force in the world's most important industry. By Steve Hamm in Redmond, Wash., with Amy Cortese in New York and Susan B. Garland in Washington, D.C.