Will NT Server Bail Under Vendor Pressure?

By Christy Hudgins-Bonafield  If 1997 goes down in history as the year Windows95 came under fire, then 1998 i s apt to be remembered as the year Windows NT and NT Server entered the fray. Government investigations of Microsoft Corp.'s competitive practices extend far beyond its browser-bundling practices. Although much attention focuses on a December preliminary injunction that stops Microsoft from requiring that its Web browser be bundled with Windows95, the posse pursuing Microsoft has grown too large, loud and boisterous to begin and end with the browser. Already there's Caldera, which is asking the courts to open up Microsoft APIs in conjunction with its charge that Microsoft illegally knocked DR-DOS out of the OS game. Sun Microsystems, too, has gone to court claiming Microsoft violated its contract by sacrificing Java portability in favor of Windows. On the government side, a Justice investigation is augmented by individual state inquiries--led in large part by Texas, which went to court to push Microsoft to tell its partners that they are not bound by contract to consult with Microsoft before talkin g to investigators. Japan and the European Commission also have launched investigations of their own. One reason for the spate of court actions is the mounting pressure on governments to address Microsoft's surging server dominance before NT's competition withers. CIC (Computer Intelligence Corp.) estimates that Microsoft and Novell are nearly neck-and-neck in the Intel PC server market, with Microsoft holding a 36 percent share and Novell, 41 percent. Within two to three years, however, Microsoft will surpass Novell at 51 percent to 42 percent, CIC predicts. And if the entire OS market is lumped together, according to Dataquest estimates, the 80 percent share of new OS units Microsoft already commands will jump to 92 percent by the turn of the millennium. By that time, Unix's share will amount to a piddling 1 percent of all new units. In the midrange--Unix's traditional stronghold--market researcher Dataquest says it sees Microsoft operating systems out distancing Unix new-unit market share 40 percent to 38 percent by the year 2000. In CIC's server-specific midrange forecast for new and existing units, it's Microsoft at 24 percent to all the Unix players at 66 percent. Why is everyone ganging up on Microsoft? After all, a common school of thought says Microsoft's muscle has delivered incredible productivity gains by integrating apps and OS, providing a single point of contact, and bridging the once-dissimilar worlds of desktop and server. Should a company be hounded for successfully increasing global business productivity? How can the government turn on the goose that's laying golden eggs for the U.S. economy? How can monopoly action be taken against a company that doesn't yet command half of all PC servers, let alone all servers? And how can Justice act when its own 1995 Consent Order says NT is not covered? To answer these questions, we talked to those in business, the Justice Department, Microsoft, its competitors and their legal representatives as well as antitrust experts and economists. For an analysis of the legal theories under which the Justice Department could pursue Microsoft see www.NetworkComputing. com/online/ms97a.html. The Business Perspective Meet Tom. He's a high-level strategic planner for a Fortune 100 retail business actively replacing the bulk of its Unix servers with NT Server, a business decision he supports. Tom is known for his outspoken stance against government intervention, but he finds himself in an unusual and ironic position. He'd like to see the government force Microsoft to open its Windows and Windows NT APIs. Tom is afraid of becoming overly dependent on technology from a single company. He's also chagrined that Microsoft is "already so pervasive that it can only be criticized by those who can't be fired or don't care that they get fired." Tom belongs in neither category. He wants Microsoft to concentrate on building a server operating system that gives him confidence, one that scales and is reliable. Instead of fixing its server problems, he says, Microsoft keeps "putting more doodads on the OS, adding more working parts to the OS that make it break more often." Microsoft is bundling applications, Tom says, to take over new markets. His own company is able to pick applications on a best-of-breed basis, but Tom believes many companies just take what they are given. "Microsoft has market share," he explains, "because it has thrown everything, including the kitchen sink, into what you need."

Industry Briefs By Kelly Jackson Higgins