Microsoft judgement deemed largely irrelevant

The court victory for the US Government against Microsoft is already largely irrelevant.

While the trial has been going on, Microsoft has been carrying out business as usual by investing in the next generation infrastructure of the Web - and making sure it dominates it.

The world has moved on. Just look at Microsoft's very recent history of business dealings with telcos and internet businesses:

• 5 November - The day Judge Jackson charged the company with using bully-boy tactics, Teligent announced it had raised $500 million in new capital. This is to expand the company's buildout of broadband networks around the world. The investor group, which will control 14 per cent of Teligent, is led by Microsoft which is investing $200 million in the business.
• 18 October - Microsoft signed a joint venture agreement with Telmex, the leading telecom company in Mexico, to create and operate a leading Spanish-language Internet portal in the Americas.
• 14 October - Satellite Internet broadcaster iBeam Broadcasting received $42 million in funding from Microsoft, and several other investors.
• 12 October - At Telecom 99 in Geneva Bill Gates announced Microsoft is targeting telecoms services as its number one business area for the 21st century, with a special new focus on wireless communications.

Sun Microsystems has certainly recognised the danger here. In its statement reacting to the judge's ruling, it said: "Microsoft should be prohibited from buying the distribution channels of the future [e.g. cable and wireless] and from buying rather than inventing technologies. Microsoft's unfettered use of a cash hoard created out of monopoly profits is a competition killer.

"The government needs to foster competition in the software industry by assuring that the technical interfaces of Microsoft's monopoly products are open. Microsoft must be forbidden from entering into exclusive or preclusive agreements."

It is unlikely the end of this legal battle will achieve what Sun wants.

The art of compromise

Though Judge Jackson didn't mince his words when giving his 'finding of fact ruling' on Friday, he made no legal ruling. Microsoft may have been hoping for more ambiguity in his announcement, but it was expecting to have to reach some compromise.

A legal ruling will take two to three months and during this time Microsoft and the US government will rapidly try to find a position acceptable to both sides.

Analyst Dr Simon Moores of the Research Group said: "Microsoft doesn't want to be pilloried or fined, and the government recognises it as a company leading the US into the 21st century and doesn't want to make too much of an example of it."

Moores thinks heavy handed government action might even discourage other businesses from achieving the aggressive and rapid growth which is creating a healthy economy. This includes Sun.

Moores believes a likely way out will be for Microsoft to make the Windows 16-bit source code open to competitors. "It may open up to competition at the consumer level," he said. He doubted that it would be necessary to make NT or Windows 2000 open.

A point in Microsoft's favour

The ruling, though exciting to hear, is unlikely to lead to any changes in the corporate market. And a few users certainly felt Microsoft had done its bit to create more choice for businesses at the server end of the market.

Alistair King, chairman of the UK Digital user group Decus, said: "People wanted to get away from the expensive proprietary systems of IBM, Digital and Hewlett-Packard. They are buying NT over HP-UX because it's doing what they want."

King's personal view was that the culture of religious devotion to computing in the US coupled with widespread hatred of Bill Gates had led to the trial and verdict.

Steve Last, technical manager at Nissan Motors GB, said he found the judgement perverse. "Microsoft has done more than anyone else to make a difference and change computing. Web development only really took off when Microsoft got involved. The way they built up the server side and data access gave us a platform to work with.

Last added that Nissan was being advised to run applications over the Internet and Intranet but found it too difficult before Microsoft entered this market, but "they get no recognition for it."

Toby Rowland, chief operating officer of online health specialists Clickmango.com, said: "As a business user and buyer of software products we see the benefit of software that comes from one supplier, as it can offer integrated software and a reliable level of service. To see that broken up and standards proliferate wouldn't be welcomed."