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Microsoft, Take 2

I suspect more than a few of you will disagree with me. In fact, about 60 percent of our survey respondents said they don't believe significant improvements in reliability, scalability or performance would result in NT or Windows if Microsoft's OS and applications businesses were segregated. Maybe this is a knee-jerk negative reaction to the idea of any government intervention, or maybe there's a fear that industry chaos would, at least in the short term, harm the OS--and it might. But I am convinced that OS bloat ultimately nourishes Microsoft's growth strategy but does little for those organizations tied to the OS.

Microsoft's bundling practices have turned many of us into high-tech addicts. Applications are doled out for free. We dabble. The dose increases. The reliance intensifies. The addiction begins. The question arises: Have the initial pleasures of the habit given way to a harmful addiction?

At least for now, few seem willing to line up for a Microsoft arm patch. Texas, an early leader in the Microsoft antitrust investigatory activities, has already backed down, citing strong local support for Microsoft. Our own user survey shows that just 44 percent of managers favor government action to compel Microsoft to open its APIs, and only 25 percent favor legal action creating a "wall of silence" between Microsoft's OS and applications businesses. Antitrust action is not supposed to be a popularity contest, but the truth is that without significant public and industry backing, pursuing divestiture activities against a leviathan like Microsoft would be political and judicial suicide.

This probably accounts for the seemingly odd way the Department of Justice is approaching antitrust enforcement when it comes to Microsoft. The DOJ first asked for sanctions under a weakly worded consent order with Microsoft. Next, the states and the DOJ made noises about pulling Microsoft's browser from the OS or forcing the addition of Netscape's competing browser. The mandated addition of competing products in the OS is, of course, untenable. The DOJ certainly doesn't want to get stuck in the eternal goo that would mark any attempt to delineate the functions that should be included in an OS, and there's no technical logic for it to require the inclusion of competing products--a precedent that could eventually overwhelm the OS.

If we use as a yardstick the early railway trestle cases that helped define "essential facilities" for antitrust purposes, it would be difficult to disagree that the government is within its rights to demand that a trestle built by one company must be shared with others. But is this a relevant measure for the Microsoft case? In this instance, the government seems to be demanding that the "trestle," a.k.a. the OS, be reconstructed so that at least two application trains can simultaneously traverse it. That solution obviously carries too steep a cost.

So, is the DOJ technologically naive? Not likely. It appears to me that the DOJ is buying time to build a case against Microsoft that extends far beyond the browser, and to generate public support for that case. Demands that Netscape's browser be included in Windows may be nothing more than a stall tactic and a way to prop up competition in the interim. And if our survey is any indication, the DOJ has the time to build momentum. Few businesses are quaking in their boots over the prospect of Windows98 or NT 5.0 delays. On a scale from one to 10, where 10 is severe, the median damage companies predicted they'd suffer from a one-year delay in Windows98 is a "1." The anticipated damage from a one-year delay in NT 5.0 was pegged at a "3."


Other Features
Inside Outsourcing
By Brian Walsh


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