ISSUE 556: The high tech office- June
The conduct restrictions on Microsoft
deserve more press
avoided writing the seemingly compulsory Microsoft Monopoly
column over the past few years. I could claim it's because the story
has been done over and over again. But really, I've avoided writing it
because I realized I was firmly of two minds about the issues.
There's no doubt Microsoft holds an
effective monopoly in a number of important markets (only some of which
were up for discussion in the trial). Despite the existence of
alternatives, Microsoft Windows and Microsoft Office really are the
defining products today for operating systems and office productivity
Holding a monopoly, however, isn't
illegal and may simply be the result of being a successful business.
But much of the testimony in the trial
painted Microsoft as a bully, taking advantage of its power position to
push around even large hardware firms. The reported threats to pull Compaq's
Windows 95 licence if that company offered Netscape's browser
preinstalled left me shaking my head.
At the same time, Micro-
soft rightly point outs that a stable, predictable and uniform
computing platform has made it much easier for hardware and software
developers to produce new products. Consumers have benefited from a
huge drop in hardware and software prices. Can anyone honestly say that
a computer industry led by the likes of Sun, IBM or Apple
would have resulted in the current low prices?
Microsoft, however, failed to be
a credible defendant in the eyes of the judge and has lost much of the
sympathy it may have held with the public.
Bill Gates' bizarre videotaped
testimony and many of the company's in-court actions seemed to dare the
judge to find the company guilty. Judge Jackson ordered the
company split in two, into one company selling operating systems and
another selling everything else. Microsoft is appealing the decision.
If the company is eventually split up,
I'm not convinced that would have much effect on the computer industry
or on consumer prices. Some in the industry suggest that two
well-funded Micro-clones may be more competition than one. The judge
hopes that a company producing Microsoft Office without ties to
Microsoft Windows will feel free to produce versions for other
up-and-coming operating systems, such as Linux. Instead, there are
fears that such a company could happily focus on a single Windows
version, letting the Mac-version languish.
The conduct restrictions placed on
Microsoft for the next three years are more important than the split,
but are getting much less press. As a result of these orders:
* Microsoft must
create uniform, public pricing and conditions for
supplying Windows to
computer manufacturers, putting an end to practices that let Microsoft
the availability of a Windows licence as a threat. This gives
manufacturers more freedom to bundle non-Microsoft products with their
computers. As well, manufacturers can freely produce systems set up
with non-Microsoft operating systems.
manufacturers can configure Windows the way they want. (In my opinion,
this can be problematic. In the mid-1990s, many companies offered
highly customized versions of Windows 3.1, resulting in confusion for
consumers and technical support. We need a balance between
manufacturers' desire to differentiate their products or respond to
customers and the benefits of a common platform.)
* Microsoft must
publish any "secret stuff" in Windows that may impact software
companies' ability to produce applications. If Microsoft wants to make
changes to its operating system that impact other companies' hardware
or software products, it must notify those companies in advance.
If enforced, these conduct orders
should reduce the sorts of bullying behaviour about which Microsoft's
customers and competitors complained. In the end, though, does it
matter? While desktop computing will remain a major industry for years
to come, it's a mature, stagnant industry. Despite Microsoft's PR
campaign about protecting the rights to innovation, it's hard to
generate much excitement about new versions of Windows or Office.
Instead, the real innovation is
happening in areas where Microsoft simply isn't a major player. The
action has moved to telecommunications, wireless connectivity and
handheld devices. Like some generals, the U.S. Justice Department
and Microsoft have been too busy fighting the last war. *