Companies planning on moving their old programs to Microsoft's new .Net software plan had better prepare for sticker shock: Making the conversion could cost roughly half of the original development cost, Gartner says.

According to a new cost model devised by Gartner, the cost of moving older Windows programs to .Net may range from 40 percent to as much as 60 percent of the cost of developing the programs in the first place.

That may come as a blow to penny-pinching information systems departments in big companies, even those very familiar with Windows programming.

Typically, moving to a new software release isn't so costly. But, warns Gartner's Mark Driver, .Net isn't just a new release of Windows.

"People mistakenly assume the cost of upgrading will somehow be the same as going from one version of a well-established product to another. That's definitely not the case (with .Net)," said Driver, who devised the cost model.

Ari Bixhorn, Microsoft's product manager for Visual Basic.Net, disputed Gartner's conclusions. He said most conversions to .Net are about 95 percent error-free, meaning they can be completed at a cost much lower than what Gartner estimates.

Gartner, however, considered factors other than code conversions in its analysis, such as training and lost productivity. Bixhorn said he didn't see either training or productivity problems as much of a concern.

Microsoft's .Net plan includes new releases of the company's Windows operating system and other server software, along with development tools and infrastructure to make programs more Internet-aware. One new technology supported by .Net is Web services, which promise to make linking internal computer systems, and systems residing in multiple companies, far easier than current methods.

What's unclear is whether the additional cost of moving to .Net will slow Web services releases. Several technology buyers told News.com this week that they are waiting for additional standards and better compatibility before they commit to large-scale projects.

The most prominent piece of .Net released so far is Visual Studio.Net, a new version of Microsoft's development tool package, which debuted in February.

Visual Studio.Net includes new versions of familiar tools such as Visual Basic and Visual C++. But the tool bundle is radically different than predecessors. It includes a new development language called Visual C# (pronounced "see sharp"), and introduces the .Net Framework and Common Language Runtime, which are technologies for managing and running programs.

The new development tool package also ushers in ASP.Net, a specialized type of software called a class library, replacing an older technology called Active Server Pages (ASP) for creating Web applications that support new Web services technology.

Still, long term, Driver predicted that making the switch to .Net for building new programs would help lift productivity and create more efficiency within companies.

"Over the course of the lifetime of an application, .Net might give you 20 percent cost advantage or more over using the older technologies," he said. "You will be able to recover that migration cost over the course of three to five years."

Companies making the switch could do so all at once, but most will likely make the change over a longer period of time. Either way, the cost of migration stays the same.

"It's an issue of paying the 60 percent up front or over the course of three years," Driver said.

The largest cost is code conversion. Because it is difficult to calculate, the 60 percent estimate in some cases could be too low.

The cutting edge can hurt
Gartner based its migration cost estimates on Visual Basic.Net and not on its cutting-edge, Java-like Visual C# programming language. One reason: Cost. A forthcoming study will say the migration cost associated with C# would be even higher than the standard Visual Studio .Net tools, Driver said.

"Some clients have asked about going directly to C#," Driver said. "For the vast majority, going from Visual Basic to Visual Basic.Net may be painful, but it's going to be the least painful of the strategies."

C# is seen as a crucial programming language for advancing .Net. Use of the language doubled in six months, according to a March study by Evans Data.

Without a doubt, companies switching to the new tools and migrating software applications over the long haul will find the switch over the easiest, but even they face difficulties in planning. Driver used the example of a developer running the older version of Visual Studio and Visual Studio .Net over a protracted period.

"That becomes untenable at some point," he said. "You've got to make the switch. So even if you go with a hybrid model, you've got to remember that you're spreading your resources thin over two different platforms."

There are other concerns about making the switch to .Net. At the top of the list is security, Driver said. Following a January memo from Chairman Bill Gates, Microsoft cranked up emphasis on security. But problems have still surfaced in recent months.

"Some people are hesitant to put Internet Information Server (behind a public Web site) because of security issues. Well, .Net doesn't really address those problems," Driver said. "IIS is still just as vulnerable with .Net running behind it as the older ASP (Active Server Pages) code running behind it."

IBM and Sun also are pushing hard into Web services, advancing their own technology strategies and tools.

Security will be an important part of that emerging market. Market researcher ZapLink said on Thursday that the Extensible Markup Language ( XML) and Web Services security market would top $4.4 billion in 2006.