A rchive Date
[ 09-06-2000 ]
Category
[ International Relations ]
sub-Categoy
[ Microsoft ]
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[Ballmer: Ruling would mean higher prices
By IT Week Staff
June 8, 2000 1:08 PM ET
LONDON -- While Wednesday's ruling in Microsoft Corp.'s antitrust case came as no surprise here, what is surprising is how quickly the changes could be felt in IT departments throughout the United Kingdom.
U.S. District Court Judge Thomas Penfield Jackson yesterday ordered the software giant to be split in two over the next year. The ruling, following the remedy proposed by the Department of Justice, also includes a number of wide-ranging conduct remedies.
Microsoft CEO Steve Ballmer, at a conference in the Netherlands the day after the judgment, said Microsoft would try to delay the ruling until it has a chance to appeal.
"If this was adopted, I'm quite sure that people would see less innovation," Ballmer said. "And I'm quite sure that consumers around the world would see higher prices for software and higher prices for personal computers."
Users, however, seem less concerned about higher prices than a changeable Windows configuration, which could vary depending on the hardware maker.
"There's the possibility of losing a centralized Windows standard and replacing it with something similar to Linux," said Simon Moores, chairman of The Microsoft Forum, which represents about 3,500 corporate IT managers in the UK. "Many companies have made large investments in Microsoft software over the past 15 years. Now they're looking at a period of uncertainty in which the comfortable layer of standards may disappear along with the higher price."
"Microsoft may have been dealt with too severely," Moores added. "This will have far-reaching implications across the industry."
Analysts here characterized the remedy as both harsh and ineffective.
"The idea of splitting the company into two is bizarre," said Robin Bloor, CEO of Bloor Research. "The Windows monopoly has nothing to do with applications, and the idea that the applications division would suddenly stop implementing on Windows only is bizarre. Microsoft may be showing less respect to the law than it should, but this remedy won't be effective in breaking the monopoly."
Although the European Union has let the U.S. take the lead on the case, legal observers said regulators here could follow up with more conditions.
"They agreed to let the U.S. take the lead, but that doesn't mean they won't add to this decision if they think it needs something more to protect competition in Europe," said Pat Treacy, competition specialist with UK law firm Bristows.
IT managers split
Most IT managers interviewed by IT Week said they didn't expect the ruling to have an immediate effect on their buying plans, although some had trouble concealing their glee over the ruling, even if adds uncertainty to their future.
"It couldn't happen to a more deserving group of arrogant corporate predators," said Chris Phillips, a CAD manager for an architectural firm in Birmingham. "However ... 'better the devil you know,' and even Word has its moments."
Others said the ruling would have no effect.
"The ruling will not weaken the company, only strengthen it," said one IT manager who asked not to be identified. "Myself and all my colleagues will continue to use Microsoft for a long time yet, and by the time the ruling gets acted on there will be two dominant forces in the PC marketplace." And both of those will be Microsoft, he said.
Still others addressed what some are already calling the "fatigue factor."
"I started watching the man from Microsoft UK [Microsoft UK managing director Neil Holloway] on the box last night thinking, 'This is an important issue,'" said David Palmer, Head of IT for the Ackworth School in West Yorkshire. "But somehow his 'company-speak' resulted in me losing the will to live, so I turned him off and had a scotch instead. .... It has gone on for so long that the only lasting impression I have is of Bill Gates displaying extremely dysfunctional behavior as he rocked backwards and forwards while being questioned."
Some IT managers addressed the possibility of uncertainty creeping in:
"Perhaps in the future, when we renew some of our major systems, we might look elsewhere if alternatives are available of equal quality and consistency, but that is probably some time away," said Geoff Elvish, systems manager for North of England Newspapers in Durham. "If it reduces the cost of Microsoft products then many would certainly benefit from that.... But if it were to devalue the quality of the products we use, because of reduced profits hitting their R&D, then that is in no one's interest."
"If done properly, this should not in any way hinder the operation of the applications side," said Michael Doyle, network administrator for Co-operation Ireland, a charity in Dublin. "If it does hinder the operating systems side, then it's because the judgment is restricting their previously dubious practices."
"The thing I find most humorous is that Microsoft is claiming to provide low-cost products. Have you seen the cost of Office Developers Edition? I don't call that low cost."
 World Fact Book (CIA)]
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