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Weekly Column

The Once and Future King: Now the Only Way Microsoft Can Die is by Suicide

Status: [CLOSED]
By Robert X. Cringely
bob@cringely.com

When I wrote last week about my conclusion that the legal system -- any legal system -- is unequipped to change Microsoft's monopolistic behavior, I had no idea that within 24 hours, Sun Microsystem would be throwing in the towel, trading its so-called principles for $1.95 billion in cash. So I guess I was right. Only now, a few thousand readers out there expect me to blithely produce an answer to the problem of what to do to bring Microsoft into the civilized world. Well, I say it can't be done.

Readers had ideas of their own. Some thought the government would dissolve Microsoft, but failed to note that the DoJ case against Redmond is over and Microsoft won. Where the governmental resolve would come to dissolve one of the greatest successes in world business is beyond me.

Some readers predicted Microsoft would collapse under its own weight and under the insurgence of Open Source software, especially Linux. Most of these readers have a higher regard for the competitive value of Linux than I do. All those who think Linux will clean Microsoft's clock who are also people who have never compiled software, please hold up your hand. See, it is the technical community (those who compile -- the Compilers) that sees Open Source as the ultimate winner while all the people who actually buy software don't. The truth is that Microsoft is positioning itself to take on Linux on Linux's turf if that's required. Bill Gates has been quite clear that his company's need for huge cash reserves is to keep it going for up to five years in the face of ZERO sales. So Microsoft could match Open Source pricing without the Open Source and while the compilers might not be swayed, everyone else (the other 98 percent of the market) would be.

Nor would Microsoft's pricing be considered predatory if its chief opponent was free software. The fact that most non-free software from commercial developers would also die would be inconsequential, or that would be the claim. But when the decks were cleared and Microsoft was down to, say $20 billion in cash, you can bet the rates would go back up in what might be properly perceived as traditional monopolistic behavior. Only in this case, it would be Microsoft responding to its competition and only inadvertently killing everyone else. On the face at least, it would be legal, thanks to Open Source -- the Ralph Nader of software.

The smartest reader of all suggested that companies be taxed on their market share so that a company like Microsoft with 90 percent share would pay a 90 percent tax rate. The nice part about this idea is that it actually would encourage competition as well as industry alliances. The naive part is that it assumes legislative resolve that does not exist and also assumes Microsoft actually pays taxes which, for the most part, it doesn't. Still, the idea is clever.

What we actually have this week is a Microsoft $1.95 billion lighter, but also far less restrained from acting the bully. Take Redmond's troubles in Europe, for example. The EU's ruling against Microsoft was based on the peculiar claim that Microsoft's actions were to the detriment of a list of competitors that included Apple Computer and Real Networks and Sun Microsystems and others, but DIDN'T include any European companies. Sure, the corollary part of the argument was that European consumers had their choices unreasonably limited, and were probably overcharged as a result, but the actual competitors being protected by the bureau charged with promoting competition weren't even EU constituents. And now the most vocal of those competitors, Sun, is out of the game completely, saying only nice-nice about Microsoft from here forward.

How convenient.

A billion to Real and another to Apple, and Microsoft will have silenced all of its victims, bolstering its European legal appeal and making the EU look stupid in the process. You heard it here first.

But Microsoft gets much more than just this from its deal with Sun. Every patent case against Microsoft that might have been bolstered by support from Sun will have lost that support. Remember that in the Burst v. Microsoft hearing, I wrote about here a few weeks ago there were two lawyers sitting at the table opposite Microsoft -- one from Burst and another from Sun. Well, that Sun lawyer won't be showing up for the next hearing or any other except, possibly, to assist Microsoft. I'm not at all saying this will deter Burst from winning, but I never thought it would come to that, anyway, and that Microsoft would settle out of court. Now, from Microsoft's perspective, Burst has even greater incentive to settle and maybe to settle for less. I hope not.

Look at the language of the Sun-Microsoft announcement. "Microsoft and Sun will work together to improve collaboration between the Java and .Net technologies, while Microsoft will be allowed to continue to provide product support for the Microsoft Java Virtual Machine in its products. Microsoft was set to end support later this year, raising compatibility and security questions for users." While some people think this means Microsoft will bundle Java again, I think that Microsoft will choose to pursue their own .NET Java (J#), instead. However, with platform independent Java less of a threat, it is easier to agree to improve collaboration. Microsoft will now make their Java work inside the .NET framework as a real option for those who insist on using Java. Meanwhile C# and VB.NET will still be the main .NET languages.

All this simply recognizes that it is too late for Java to succeed in the Windows world. .NET is now too good.

Sun no longer poses any threat to Microsoft. Part of this feeling is based on agreements between the two companies that have to exist but weren't announced. For all we know, Sun may have given up the future of Java altogether and will allow it to wither away and be replaced by .NET. Whether that's the case or not, Java Desktop (Sun's biggest strategic threat to Windows) is over. Sun now goes back to being just a maker of big Unix servers intended to support a Windows-centric IT world. And the whole Java culture, which is to say IBM and Oracle, is threatened. Microsoft hobbles three opponents in one deal.

The worst thing about this deal is that Sun brought it upon itself through a campaign of ridicule and hate promulgated personally by CEO Scott McNealy. This is McNealy's failure and nobody else's. The quotes last week from McNealy were laughable, the about face nothing short of shameful. How are Sun's big customers going to believe what the company says in the future in the face of such a change? How can they base huge technical investments on the word of Sun?

McNealy should have watched "Godfather 3" -- "Never hate your enemies, it clouds your judgement."

So what happens now that Microsoft is essentially unfettered thanks to a few payoffs and a $10 million per month legal bill. What I see coming is karmic retribution that begins with a phase I think of as "the fleecing of the customers," in which we will be forced to buy more and more stuff we don't really want or need. Here's an example from someone in a position to know who prefers to go unidentified:

"A company wanted to hold off on upgrading Microsoft Office for a year in order to do other projects. So Microsoft gave a 'free' copy of the new Office to the CEO -- a copy that of course generated errors for anyone else in the firm reading his documents. The CEO got tired of getting the 'please re-send in XX format' so he ordered other projects put on hold and the Office upgrade to be top priority. This is an implementation of Microsoft's treadmill way of abusing its customers. Put them on a treadmill and start spinning it so fast that the customers can't look at anything else besides Microsoft products. They even have their own language, something that would fit perfectly into Orwell's 1984. A 'neutral PC' has 100 percent Microsoft software. Their 'embrace and extend' is really 'embrace, extend, and exterminate.' Even how they view competitors, they have the term 'NOISE' (Novell, Oracle, Intuit, Sybase, and Everyone else). When they say they work in a heterogeneous environment, they list MS 95, MS98, NT4, W2K. Oh yeah, that's heterogeneous. In Silicon Valley, hardware people look forward to the day someone like Cisco buys their company or technology and makes them rich. Software people fear the day that Microsoft notices their niche because they will get sucked dry. Some have even said that venture capital people are tending to avoid software companies '...because Microsoft will pull a Netscape on you."

After the fleecing of the customers comes the stage I call "believing your own PR," in which Microsoft becomes complacent and arrogant, too used to ruling the world of IT. This stage has been reached before by IBM, DEC, Wang, and a few others.

The final stage I call "missing the boat," which involves a significant advance in non-Microsoft technology that Redmond chooses to address by not addressing -- they just dictate that it shall not be so, thinking that as always their word is law. Maybe this last stage has to do with Open Source but probably not. This stage has to be something beyond Netscape's browser or Sun's Java, because Microsoft was willing to embrace those and destroy them. Missing the boat means a zig that threatens the heart of Windows, probably associated with a hardware platform shift. Only this time, Microsoft will be too slow and customers, feeling abused and tired of the treadmill, won't be so afraid. Bill Gates (it will still be Bill, because this will happen in the next decade I am sure) will again turn his corporate supertanker and add full power, but this time the competing ship will not only have a head start, it will be able to accelerate faster than Microsoft.

It has happened before. In fact it ALWAYS happens.

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