Can Microsoft Really Change?

Bill Gates seemed humbled, contrite even, when he indicated Friday morning that the Microsoft of the future would be a more restrained industry leader.

Bill Gates seemed humbled, contrite even, when he indicated that the Microsoft of the future would be a more restrained industry leader.

In a brief mid day press conference praising the agreement, Microsofts chief software architect confessed the three-year suit had a "profound impact" on him personally. The company, he said, will "focus more on how our actions will impact other companies."

Was this just lip service? Or will the market see a Microsoft that refrains from manhandling competitors? Can one of the most aggressive monopolies and successful companies in U.S. history change the way it behaves?

The things he said – that Microsoft needs to be "a better industry leader, communicating in a new ways and more open to design flexibility" was Gates roundabout way of admitting the companys misdeeds. Maybe reciting this publicly was part of the agreement. For sure, they were a departure from the unyielding and defensive rhetoric weve heard for three years.

Recent evidence suggests Microsoft both has and hasnt changed its colors. After all, this is the company that just expelled Java from Windows XP. On the other hand, the company yielded on the controversial new Software Assurance licensing agreements after customers squawked. And it recently opened up Passport, its digital authentication and identification scheme.

That it had pushed the envelope on these fronts suggests the glass is half empty. That it bent to the will of critics says half full. Where Microsoft is today is reminiscent of IBM a decade ago as it transitioned from proprietary to open computing. When IBM initially prayed at alter of open computing, no one believed it. It took years to convince various constituencies of its open intent, proving that a controlling corporate persona cant be erased overnight.

So lets just hope Microsoft wasnt just placating negotiators and U.S. District Judge Colleen Kollar-Kotelly, who must sign off on the settlement.

It should also be noted Microsoft dodged the biggest bullet of all – being barred from adding whatever function and software it wants into the Windows monopoly, which was pretty much the crux of the case argued in the courtroom. On this stance, Microsoft never wavered.

When pressed on how the case affected him personally, Gates quickly steered the conversation back to the impact the settlement will have on Microsoft. "Certainly it was a long complex [process] and sometimes draining. During the three years, there was lot of uncertainty over Microsoft. That uncertainty is now resolved."

What better message could Gates send investors, whod periodically seen Microsofts share price driven down when the case was turning against it? That message was reinforced by Gates position on the litigation, which he termed "never a good thing for any company or industry."

Listening to the answers by phone from both Gates and CEO Steve Ballmer made them sound rehearsed and scripted. Asked if the Sept. 11 tragedy in New York accelerated Microsofts desire to settle, Microsoft CEO Ballmer twice said those events "stood on their own," implying it didnt. You wouldnt want these guys getting mushy and emotional, would you?

The extraordinary meaning of what was said was markedly different in the way it sounded, but granted, its been a long haul. Ballmer wrapped it up with a somewhat glib comment about Microsofts getting the green light to put "innovations" into Windows.

"Personally, Im happy to have our chief software architect focused on those innovations."

Are we seeing a kinder and gentler Microsoft? Write me at [email protected]