Could Microsoft end up its own worst enemy? That seems to be the government's thinking. Assistant US Attorney General Joel Klein summed up the Department of Justice's reason for recommending a Microsoft breakup: The best competitor to Windows will come from a Microsoft Office company.
Klein reiterated the Windows vs. Office line of reasoning on Sunday morning's "Face the Nation" on CBS.
The DoJ and 17 of the 19 states that sued Microsoft for antitrust violations -- a group that last Friday proposed a remedy of breaking Microsoft in two -- are arguing that a Microsoft Office company would have incentive to port Office and BackOffice applications to non-Windows platforms. The resulting availability of Microsoft applications on Linux, Unix, the Mac OS and other platforms would propel demand for these products, the government argues.
Some software developers agree with this future scenario; others think Office or BackOffice for Linux might do little more than kill off Microsoft competitors in these markets and leave customers with fewer choices.
"The market pressures are there for Microsoft to embrace Linux. A number of OEMs might come around to adopt Linux if Microsoft ends up backing it," said Ransom Love, president and CEO of Linux vendor Caldera. "Corel and Sun/StarOffice would face new, significant competition, but at least (a breakup) would create a level playing field. ... And Microsoft would benefit from working on Linux, too. Maybe they'll finally get their apps to run better on ... a better-written multitasking OS."
Office as an alternative platform But at the same time, the government also has glommed onto the concept that Office, in and of itself, would be a viable alternative platform to Windows on the desktop.
A hosted version of Office -- meaning one that runs mostly on back-end servers and offers users a thin-client interface for access -- could supplant Windows as the dominant desktop environment, some have argued. If not a hosted version of Office, then possibly some kind of "digital dashboard" -- a customsable portal-type of front-end based on Microsoft's Internet Explorer browser -- Outlook email client and/or its MSN interface could end up as an alternative to the Windows start screen, others have suggested.
But both of these alternatives -- hosted Office or a portal front end -- would, at least the way Microsoft has pitched them, still require Windows. While some Microsoft competitors like Sun Microsystems and Oracle are touting a world of OS-free clients, once known as "network computers," Microsoft and others have not bought into that model.
While some market watchers said the DoJ's proposal was half-baked, at least from a technology perspective, others said the agency knew exactly what it was doing when proposing the breakup remedy.
"I'm surprised how forward-thinking the government proposal is," said Gartner Group analyst David Smith. "Where have the real threats to Microsoft come from lately? Middleware like Java; browsers. Even Office is basically a collection of components exposing APIs (application programming interfaces), so it's middleware, too."
Smith said he expects that the DoJ breakup plan, if enacted, would result in Microsoft having to retool many of its current and future-stated product plans.
"It would throw a big wrench into NGWS (Next Generation Windows Services) and many other Microsoft strategies that are predicated on integration, like hosting," he said.
But Giga Information Group isn't bullish on the DOJ's proposed remedy. "The remedy doesn't make any sense and shows the government doesn't really understand technology," said Giga analyst Laura DiDio. "It will, in one sense, stymie innovation, but not for the reasons (Chairman Bill) Gates cites. There will be customer confusion."
Even without being subject to a government-enforced breakup, Microsoft was running into problems, DiDio said. "Microsoft is like any empire, from the Romans on down: They're destined to implode. A better idea (than breakup) would be to open up the Windows source code ... to prevent them in their contracts from strong-arming their 'partners.'"
Giga sent a note to its clients on Monday claiming the DoJ remedy would have little impact on customers over the next two to three quarters, but it noted that, in the longer term, the impact is harder to determine. On the server side, DiDio said, customers could benefit from "extras" that Microsoft (the Windows company) might opt to give away to stave off potentially strengthened competitors like Sun, the Linux vendors and Novell.
"Watch for possible giveaways by Microsoft, things like free hardware, free and/or concurrent licences, steeper discounts, more liberal entrance into beta programs," DiDio said. "And remember: Microsoft is always at its best when it's challenged."
If you were hoping Microsoft was heading for a bit of a beating Steven Vaughan-Nicholls reckons you will be sorely disappointed -- go with him to read the news comment at AnchorDesk UK.
Take me to the DoJ/Microsoft special.