OT: Ballmer: Future of Windows at Stake in Settlement
(Powerful words from Microsoft CEO...)
story.news.yahoo.com
Tue Mar 5, 1:19 PM ET
Robyn Weisman, www.NewsFactor.com
With proposed settlement hearings due to begin Wednesday, Microsoft (Nasdaq: MSFT - news) on Monday released a 143-page deposition from CEO Steve Ballmer, which was conducted last month. Microsoft was required to make the deposition public under an order from presiding judge Colleen Kollar-Kotelly.
In the deposition, Ballmer argued that sanctions sought by the nine remaining plaintiff states would force Microsoft to remove its Windows operating system (OS) from the marketplace altogether.
"It guarantees that the only way to comply effectively is to remove the product from the market," Ballmer said. "If you can't ship Windows, the whole game's kind of over."
States Refine Terms
In response, the nine states that have yet to accept the settlement modified their demands, stating that Microsoft would be required only to sell a modular version of Windows rather than to supply a version that, according to Ballmer, would doom the OS.
"The modified measures should deflate Microsoft's overblown rhetoric and apocalyptic predictions about the proposed remedies," Connecticut state attorney general Richard Blumenthal said.
Consumer Justice?
But Peter Kastner, chief research officer at research firm Aberdeen Group, told NewsFactor that meddling by the state attorneys general could cause immeasurable damage to consumers if Microsoft is forced to dismember Windows.
"Obviously, they know nothing about how software is designed, written, tested and profitably marketed," Kastner said. "This is not some clean-sheet academic exercise in microeconomics but real-world messing with the business and leisure lives of a hundred million citizens."
Kastner contended that an anti-Microsoft ruling would make it extremely inconvenient and expensive for consumers to buy, install and maintain all of the different "middleware" that the state attorneys general are saying must be removed from Windows.
"I think it would be a huge disruption to the economy and a royal pain for consumers, while costing them more in dollars and a lot more in lost productivity and leisure time," he said. "This is progress in the name of justice?"
Motor Available Separately
According to Kastner, Ballmer is really saying that it would be so uneconomical for Microsoft to delete from Windows its vaguely defined "middleware" features that the company's shareholders would be better served by a decision to halt distribution of the Windows product.
Kastner agreed with Ballmer and offered an analogy for the state lawyer's argument.
The courts rule that because "automobile dealers bundle too much together, you are [henceforth] only allowed to buy the chassis from the car dealer," said Kastner. "You'll have to choose, buy and install seats, motor, wheels and tires from other sources."
Windows Removal Unlikely
Rob Enderle, vice president and lead Microsoft analyst at Giga Information Group, told NewsFactor that despite Ballmer's assertions, it is unlikely that Microsoft will remove Windows from the marketplace.
"That's on a par with the odds of winning the lottery," Enderle said.
But the final settlement by which Microsoft will have to abide should be livable, Enderle added.
"If the states require unlimited versions, it would be incredibly costly and put Microsoft at risk for failure," Enderle said. "The court's end goal is not to put Microsoft out of business, but only to mitigate its monopoly."
Diet Windows
Enderle said Microsoft needs to supply a version of Windows that is thin enough to mollify the [aggrieved] states. He added that the states have problems with only a handful of the middleware included with the current version of the OS: Passport, Windows Media Player, the Outlook Express e-mail client and, of course, Internet Explorer.
Enderle said that Internet Explorer would be the most difficult software to remove because it is wedded so closely to the Windows OS.
However, Enderle added, "A free-floating Internet Explorer might be a good thing for the marketplace -- at least from a consumer's standpoint."
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