The Liberty Alliance Project, a coalition of companies led by Sun Microsystems, made big news this week when two corporate behemoths, AOL Time Warner and then American Express, joined its ranks. Most who look at the Alliance see it as Sun's latest attempt to take on Microsoft for a share of the operating system and server market.
But that misses the point: This is a coalition of companies concerned about mainly one thing: Letting Microsoft have the identity authentication business all to itself. Liberty Alliance partners have hundreds of millions of customers, and they are utterly concerned about preserving and protecting those relationships as business increasingly moves online. They simply don't want Microsoft--and its Passport authentication scheme--standing between them and their customers.
Along with Amex and AOL, the Alliance includes Fidelity Investments, Bank of America, Sony, eBay, Sprint, Nokia, Cingular Wireless, NTT DoCoMo, American Airlines, United Airlines, and General Motors. AOL had been considered a major holdout, and skeptics have wondered why the Alliance hasn't attracted a major credit card company, an industry with a big stake in user authentication and online commerce.
By banding together--and with the likes of AOL and AmEx in their camp--the Alliance members are setting themselves up as a major roadblock to Microsoft's plans.
Given this kind of opposition, which, by way, encompasses some of Microsoft's best customers, Microsoft should just take a deep breath, swallow hard, and accept the power-sharing agreement implicit in a decision to join the Alliance itself.
Microsoft should not miscalculate: Yes, Passport exists. Sun has yet to create a competing product. But even if Sun can't deliver a viable authentication technology itself--which I accept as a given--the Liberty Alliance has the financial and technical muscle to make certain an anti-Passport product makes it to market.
In fact, I'm convinced the Liberty Alliance would be prudent to obviate its dependence on Sun by creating a joint venture company, whose charter would be to create user identities that could be used across a variety of Web sites and new Internet services as they appear. The service would also maintain the databases necessary to securely manage user information, like credit cards and addresses, that might also be shared among the sites.
This business, which I conceive as a not-for-profit cooperative, would be owned by Alliance members--but it would be governed in cooperation with customers, who would not have to be Alliance members. The company might charge a tiny per-transaction fee to fund its operations. This is a model similar to credit card companies such as MasterCard and Visa, which are effectively owned by member banks.
If Microsoft doesn't join the Alliance, the ensuing battle would essentially pit American big business versus Microsoft. This fight would undoubtedly move to Washington, since the feds would certainly be watching any endeavor that links groups of e-commerce businesses into online cartels.
But instead of merely facing the Department of Justice and some states, Microsoft would be facing the lobbying interests of companies larger and better connected than itself. Compared with that, joining the Liberty Alliance seems like a minor annoyance and an acceptably small loss of face.
Given Microsoft's tremendous ability to spin any story to its advantage, this could even be rotated in a way that postures Redmond as simply responding to customer demand and affirming its support for open standards.
I am not so naïve as to believe that only one authentication system will prevail; rather, I hope to see many companies providing these services. But the Liberty Alliance provides the greatest likelihood that these systems will work together and that everyone--businesses and customers alike--will receive their full benefit.
Should Microsoft join the Liberty Alliance? Why or why not? TalkBack to me and vote in my Quickpoll below.