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Art, the reason there will be a settlement is the software industry in general could not live with the new anti-trust paradigms that would come out of any court ordered initiatives. I have read a lot of the suggested solutions that have been in the press this weekend and they go much further than anything the software industry will accept. "Free Source Code"? Virtually every software manufacturer distributes only Object Code. Patent initiatives? Without the ability to patent techniques and implementations along with copyright and licensing of the actual code there would no intellectual property protection which means no way to get a return on your investment. IBM's software business is huge with both period and annuity revenue streams enjoying the highest product margins and, in addition, the technology divisions cross license this intellectual property to the tune of about a billion dollars a year which is enormously profitable. The actual intellectual battleground of the 21st century is not in software residing above the External User Interface such as Windows but Microcode that is embedded in chips or resident on internal disks within a machine and below the External User Interface. What happens here? Interface disclosures are usually done at the attachment level such as industry standard interfaces like SCSI and so on, or unique hardware interfaces such as Parallel and Escon channels but what if it had to be done at the internal architectural level where memory interlocks with the instruction set implemented by microcode. Now no one is a manufacturer of a solution but only pieces of a puzzle which never gets solved well. MSFT should not have strong armed PC manufacturers nor bundled the browser with the operating system for free without snap-out. But if they had a snap-out, with a charge that delivered a modest profit and gave the PC manufacturers that option even though leading with a bundle that was a better deal, none of this would have happened. MSFT created critical mass. They beat OS/2, WARP, and all the other options. They compete against other alternate platforms such as Servers with centralized software using distributed computing, UNIX implementations, Java architectures, free solutions such as Linux, Internet appliances and Network Computing which use no operating systems at all. They had a very strong argument they were best of breed. Their share was because they were accepted in the marketplace. But they stepped over the bounds with bundling and violating tying law provisions within anti-trust. That is what has to be corrected. No one, including IBM, can afford to have some Federal judge along with the DOJ and a bunch of parasitic Attorney Generals rewrite the entire software industry. It would simply not be in the national interest to do so since it would give away much of what has been developed in this country by all of the IT companies. It would allow countries that are developing software industries like India to rape and pillage our intellectual property. MSFT lost the big picture vision. They started majoring in minors and letting egos and personal power dictate their thinking. It is in this arena that Gates has come up short. Just as IBM reinvented itself and now services are part of the future and mainframes are only a piece of the revenue pie, MSFT must do the same. They have to settle this case and move on with strategic thinking looking beyond the PC world and Windows. They need to understand how they are going to prosper in an Internet environment that does not require an operating system. If they settle and move on they will prosper. If they fight this to the end they could eventually go the way of Wang, DEC, and others who missed the big picture. |
