To All: And this from a newspaper that is not usually pro-MSFT:
Posted at 10:24 p.m. PDT Friday, April 28, 2000
How Microsoft breakup could impact consumers
BY JON FORTT
Mercury News Staff Writer
When the dust eventually settles in the aftermath of a divided Microsoft Corp., the consumers could be left with more choices in software applications -- or new headaches.
On the one hand, analysts say, consumers could find more software options that are pre-loaded on their PCs, adding more value to the cookie-cutter bundles now available. These new offerings could occur relatively soon if the federal judge goes along with the government's request to, at the very least, place limitations in the way Microsoft deals with other software developers.
But other argue that the comfortable familiarity of the Windows software could disappear.
``There will probably be more surprises in day-to-day use of computers,'' said Richard Doherty, founder of the Envisioneering Group, a consulting firm in Seaford, N.Y. ``Very few of the companies we deal with have seen Microsoft as the innovator that they call themselves, but Microsoft has advanced the industry through this amazing consistency.''
If the government dismantles the Redmond, Wash.-based software giant, it probably won't happen for a couple of years at least, since Microsoft has vowed to appeal the court's ruling that the company abused its power by bullying competitors and stifling innovation.
Much of the effects of consumers remain speculative, until the case is finally resolved. Still, some industry watchers say the long-term view could result in a consumer boom. They say that breaking Microsoft into two companies, one controlling operating systems and the other software, services and other products, will bring software prices down and give computer manufacturers leeway to better customize software to suit a customer's needs.
For instance, PCs could come with software packages geared specifically toward children, said Ed Black, chief executive of the Computer & Communications Industry Association, a trade group, in Washington D.C. As it stands today, most computer makers feel obligated to pre-load only Microsoft's software bundles, because of the company's dominant position in the market.
Software choices
``That kind of innovation, those choices, could start appearing very quickly,'' Black said. ``You have all these hardware choices today when you walk into a computer store, where you can pick and choose, but you can't do that with software.''
A breakup would create an opportunity for rivals of Microsoft's Windows operating system, said Rob Enderle, vice president for desktop and mobile technology at Giga Information Group. Apple Computer Inc., whose computers and operating system make up about 10 percent of the consumer PC market, has been gaining market share lately. Also, Microsoft instability could be good news for Linux, a reliable operating system popular with the high-tech crowd but still hard to use for the consumer audience.
``All of a sudden now, this can become an economic incentive for Linux,'' Enderle said. ``Somebody's going to say it's worth putting in the user interface for the average consumer, so you don't have to be a techie to use it.''
Not everyone thinks a Microsoft breakup would be a good thing. Not surprisingly, Microsoft Chairman Bill Gates called the Justice Department's breakup recommendation ``anti-consumer'' and ``punitive beyond reason.'' Some consumers Friday seemed to agree.
While shopping at a PW Market in San Jose on Friday, Pat Higuera said she realizes that monopolies sometimes abuse power, adding that it was a shame that Netscape lost its domination after Microsoft began bundling its browser Internet Explorer with the Windows operating system and giving Explorer away for free. ``But I've always liked Microsoft products,'' she said. ``Everything pre-loaded? I really like that.''
More competition in either the operating systems business or software applications could mean more choices. But that could mean a variety of systems that might not garner the market share to offer a full array of applications for the end user.
Bob Kaku, an information technology worker at Lockheed Martin, said he remembers the days when Apple's Macintosh platform was more competitive with Microsoft Windows. He isn't looking forward to dealing with non-compatible systems again.
Creating confusion
``It's going to create a lot of confusion in the marketplace,'' he said. ``I'm really kind of against breaking up Microsoft.''
It would not be the first time the government divided a company's operations.
In the early days of film, the giant Hollywood studios controlled most every aspect of the business, deciding what movies were produced, who acted in them, and what local theaters got to show them. If a theater wanted to show Metro-Goldwyn-Mayer's hit ``Gone With the Wind,'' it also had to show several other less impressive ``B'' movies.
After 10 years of litigation, the Supreme Court decided in 1948 that studios could no longer own both production and distribution. Theaters were free to show what they wanted, and independent studios began cropping up, fueling the beginning of the modern movie era.
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