Microsoft Wins Another Round, But Change is Coming

Opinion: Redmond has quashed its antitrust foes in the U.S. and some in the industry may look to the European Union for satsifaction. However, even greater market change may be coming from another place entirely.

Have you ever noticed how sometimes the actual end of something occurs a long time after people stopped paying attention? So when the end really does finally come, people just shrug. The latest example is Wednesdays decision of the Microsoft antitrust lawsuit—a case that most people believe ended in the U.S. a couple of years ago.

Sure, Microsoft is always being sued for something, and has even devoted an entire to the subject. But this case was the center ring, the Greatest Show on the federal circuit. That Microsoft case, which seem to be at its official end now that Massachusetts has been thanked for playing and told to go away.

I am not sure what the Bay State hoped to accomplish by staying in after all the other states that had sued Redmond followed in the feds footsteps and settled up their accounts. But good money is often thrown after bad and now it appears the case is over.

Of course, some cases can go into hibernation in the federal courts if one of the parties doesnt dont want it to be over and has enough money. But it looks as if Massachusetts has had enough.

That throws the spotlight onto the European Theater where Microsoft continues to appeal a huge fine and a requirement for it to ship a version of XP without Windows Media Player.

Heres the question for the lawyers, judges and the politicos: If Microsoft can drag the appeal out until Longhorn ships (or close enough to that time) will the company just be able to write a check and walk away? Or must Bill and Steve fight on the land, in the air, on the seas, and accept nothing but total victory? It is, after all, just money were talking about and Microsoft has a lot of that.

You will be forgiven if you dont understand what Windows Media Player has to do with Europes "Microsoft Problem." Like taking Media Player out of some copies of Windows XP is somehow going to make Real Networks a major threat to Fortress Microsoft?

Maybe a decade ago, had Microsoft been kept out of the multimedia player business entirely, Real could have become the deal in multimedia. But once it gets into a market, Microsoft can afford to fight attrition warfare seemingly forever.

What Microsoft did or didnt do to Real or Netscape or anybody else in the past really doesnt matter very much. Its over, done with, the damage done, and the worlds attention has moved on. There are no legal remedies that can be applied today that will turn back the clock and change yesterdays losers of Microsoft battles into tomorrows winners.

Nor do I believe Europe will be able to force huge changes in Microsofts behavior. Not unless they are willing to do a lot more that they are proposing now. Even if Microsoft just threw in the towel, paid the fine, dumped Media Player, and promised to sin no more, not much would change. Anyway, it looks as if Microsoft plans to fight and by the time anything is decided the result will matter exponentially less than it does today.

Hot news: The legal challenges to Microsoft wont accomplish anything, but what the courts cant do, the marketplace may take care of. And you may or may not like the outcome, regardless of how you feel about Microsoft today.

I am reminded of an old cartoon, from Gary Larsons The Far Side, as I remember. It showed a group of dinosaurs holding a meeting. This was during the AT&T break-up and someone had taped the companys "death star" logo on the podium from which the head reptile was addressing the others.

The caption had the speaker saying something like: Ladies and Gentlemen, the picture is pretty grim. The worlds climates are changing, the mammals are taking over, and all of us have a brain about the size of a walnut."

Now I am not saying that Microsoft is a dinosaur, but the climate in which the company operates is changing. And when the climate changes, so can everything else.

The coming big battles for Microsoft wont be fought in the courts. Or in the U.S. Or even in Europe.

On a global basis, Microsoft finds itself increasingly out of touch as mass computing comes to emerging economies, especially in Asia. These people are finding they dont have to pay—or at least not very much—for the sorts of platforms upon which the Microsoft fortune was built.

The real threat to Microsoft isnt anybodys legal system but a marketplace that sees Microsofts biggest sellers as commodity products that can easily be replaced with home-grown Linux-based solutions that cost pennies on the dollar for what Microsoft charges.

Microsoft isnt alone in this battle. All the big first-world computer companies are threatened. How these companies—and their governments—respond to this economic climate change will have tremendous consequences.

Meanwhile, the legal battle will continue, but our attention should already on an entirely different continent.


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