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ISSUE 556: The high tech office- June 20 2000


The conduct restrictions on Microsoft deserve more press

I've 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 suites.

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 play favourites.

* Microsoft cannot use
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.

* Computer 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. *


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Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan