Microsoft antitrust judgement: Winners and losers

Contemplating a market where the old rules may not apply, rivals and partners of Microsoft are no doubt assessing their prospects in a future defined by last Friday's milestone federal antitrust ruling.

They're asking themselves these kinds of questions: Will the findings of fact recently revealed by US District Judge Thomas Penfield Jackson rein in the software giant? What will the ruling mean to the competitive dynamics of the fast-moving software and computing markets?

Who are the companies that stand to be most affected as the antitrust case ripples through the market? Here's our rundown of the biggest stakeholders, along with what they may stand to gain -- or lose:

America Online: Jackson's findings of facts would have had more import on AOL if this decision had been handed down in 1994. The two companies may still hold their noses in the others' presence. But business is business, and there's a deal to reserve a piece of the Windows desktop for AOL. More interesting is the potential impact on the escalating battle over instant messaging -- but since AOL's been the instigator, don't expect MS to back down. Over the next year, the two companies will increasingly clash for primacy in the nascent market for application and handheld devices.

Apple: The world of Macintosh-based systems remains unaffected by the judicial findings of fact. Mac users will continue to buy Macs and Wintel customers will continue to buy PCs.

AT&T: Has bigger problems to solve than think about Microsoft. Besides, MS is now an official investment partner, having taken a hunk of AT&T during the course of the telco's $58 billion acquisition of cable TV provider Media One.

Be: Windows' market dominance has turned Jean-Louis Gassee into "Jean-Louis Passe." The flamboyant French entrepreneur has had to rein in whatever ambitions he had for supplying an operating system to the masses. At this point in the game, even a breakup of Microsoft into so-called 'Baby Bills' wouldn't significantly improve Be's prospects.

Dell: Does whatever Microsoft tells it to do. In return, Microsoft cuts Dell big breaks wherever possible.

Gateway: Same as Dell -- though the folks running Gateway are blunter about how they really feel about the Redmondians.

Hewlett-Packard: This is a company that once told Microsoft it would choose another vendor if only there were an alternative to Windows. If Linux becomes ready for prime time, will HP put its money where its mouth is? Not likely.

IBM: The operating system wars are long over but senior execs who lived through those battles today enjoy a sense of vindication. But you can't translate that into market share. OS/2 remains a niche product and IBM isn't about to revive its operating system competition with Microsoft. In court testimony, IBM complained that Microsoft put Big Blue at the end of the line for the Windows 95 license after IBM decided to bundle Lotus SmartSuite with its systems. Rest assured Microsoft won't dare run that game again.

Intel: For better or for worse, the two companies are joined at the hip. Still, Intel came out smelling like a rose after its brush with the law. The only spillover from the Microsoft trial will be an even keener sense about how far Intel can push before running afoul of the trustbusters. But this company has always been more vigilant than its Wintel partner about policing itself.

Novell: The company nearly imploded before Eric Schmidt took over as CEO in April 1997. Since then, it's staged a remarkable turnaround. The big question: What impact will next February's Windows 2000 (a.k.a. Windows NT 5.0) release have on Novell's bread-and-butter NetWare line.

Oracle: Unconfirmed reports had company CEO Larry Ellison spotted doing handstands on Highway 101. Over the years, Microsoft, via Windows NT operating system and its SQL Server database, has steadily made inroads into Oracle's preserve -- the big-money market for the data processing infrastructures of big business. Thanks to the ruling, Oracle may be able to make hay with Microsoft's troubles by pitching potential horror stories to database clients.

RealNetworks: Microsoft refugee and now RealNetworks CEO Rob Glaser can sleep easier at night. Last year, a reluctant Glaser hauled himself to Washington to tattle on ex-buddy Gates in front of a Senate sub-committee. Glaser complained Microsoft purposely designed code to disable Real's audio player when installed on the same system as Microsoft's rival product. Microsoft denied the charge. Still, a huge market is up for grabs. After Friday's bombshell, it's doubtful Microsoft will try to take him down -- at least in a blatant way.

Red Hat: Largest distributor of the Linux operating system which is considered an alternative to Microsoft Windows NT. In this zero sum game, anything that's bad for Microsoft is good for Red Hat. Evidence: On Monday, Red Hat's stock soared more than $18 (£10.80), or 21 percent, in the wake of the milestone antitrust ruling.

Sun Microsystems: Bill Gates' latest travail gives CEO Scott McNealy tons of delicious fodder for the inevitable Top Ten list he'll deliver during next week's Comdex keynote. Microsoft's tactic to "embrace" Sun's Java programming language -- via its own homegrown MS version, of course -- was designed to bolt the programming language's future to Windows. Microsoft said everything was above board but Sun protested about contract violations. The two companies are in court. Now with Jackson talking about predatory monopolies, Microsoft might decide to cool it for the time being.

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