Did Microsoft foresee EU-Vista row?

Probably, say analysts, who suggest the situation could have been better handled if issues were properly clarified sooner.

Even with its experience in dealing with antitrust issues, Microsoft was still unable to avoid yet another antitrust claim concerning Windows Vista. But analysts say it could have an easier time handling this problem if there had been more openness and transparency.

Despite vowing to play fair with the release of Vista, the Redmond, Wash.-based company is still struggling to get the approval of the European Union (EU).
"Monopoly is not always a bad thing."
-- David Mitchell
software practice leader, Ovum

Microsoft's tussle with the EU over Vista has triggered rumors that it could further delay the launch of the next Windows OS release--though the software vendor has since decided to go ahead with the January debut.

But with all its experience in dealing with various antitrust lawsuits in the past, should Microsoft not have foreseen this coming?

According to Michael A. Silver, research vice president at Gartner, the software giant could have and probably did foresee issues with the EU. "The issue is clarifying and responding to them," he said.

David Mitchell, software practice leader at research house Ovum, said: "In my view, the dispute [with the EU] is as much to do with the behavior of the EU as of Microsoft.

"There have been quiet discussions between the two [parties] for over 18 months about Vista, but not concrete enough for Microsoft to actually make any product changes to address issues that the EU were raising," he said, in an e-mail interview.

Mitchell said that when the debate finally became public in mid-2006, there was increasing need for greater clarity over the nature of any intervention by the EU because the lack of it was "damaging to the industry".

Discussions between the two parties then escalated, with more clarity and focus, and eventually resulted in the modifications to Vista, he said.

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Silver noted that Microsoft needs to be "more open and inclusive" in allowing products from other vendors to be easily integrated, particularly in terms of security.

He explained: "Keeping the systems more closed, like [it did] with PatchGuard, may--in Microsoft's opinion--result in more secure systems.

"But, in many ways, the third-party ecosystem made Windows the success it is today and Microsoft needs to accommodate other vendors, not just to assure competition for legal reasons but also to ensure a wider variety of vendors can innovate."

Microsoft, for example, could come up with products that offer better security and move the industry forward in this area, he said.

Monopoly, not always bad
Mitchell said: "Monopoly is not always a bad thing; it's the behavior of an organization when they do have a monopoly, or near monopoly, that is the point." In the utility transmission sector, for instance, monopoly is the only effective way for the industry to operate, he explained.

"For me, the key responsibility that Microsoft has is to its customers--having to build products that anticipate and serve their needs. They also have the responsibility to allow an economic ecosystem to develop around their company, enabling different types of partners to operate in that economy."

However, Mitchell added, Microsoft does not have an obligation to slow down development "in order to artificially protect certain niches". He pointed to a time when DOS (disk operating system) was used, and there was a market for development libraries which allowed menus to be used in DOS programs.

The analyst noted that nobody would have prevented Microsoft from developing Windows in order to allow that niche to flourish, because it would not have been in the consumer's interest.

Mitchell said: "We're in a similar situation now, where Vista will open up new niche markets that didn't exist before and companies will need to evolve as the shape of the market evolves."