Can you name some top technologies and companies that jeopardize or have jeopardized Microsoft’s hegemony over the operating system world? If you asked me that question, I would have said Apple, Linux, Java, and the Netscape browser owned by AOL, all of which at one time or another have been considered a good alternative to the Windows platform.
But it was Microsoft’s latest agreement with Novell — in which it agreed to pay Novell $536 million and promised to share technology in order to have Windows and Suse Linux interoperate — that rang a bell. So I checked the archives.
On Aug. 6, 1997, at MacWorld in Boston, Bill Gates stood onstage with Steve Jobs to announce a broad product and technology development agreement. “To further support its relationship with Apple, Microsoft will invest $150 million in non-voting Apple stock,” Gates declared.
On May 29, 2003, Microsoft and AOL Time Warner announced an agreement to, among other things, a “royalty-free” seven-year license of Microsoft’s browsing technology. Microsoft paid AOL $750 million.
And it was on April 2, 2004, that Steve Ballmer took the stage with Sun’s Scott McNealy and announced “a technology collaboration agreement to enable their products to work better together.” As part of that deal, Microsoft gave Sun a total of $1.95 billion.
Does anybody else see a pattern emerging here?
Of course it’s part of Microsoft’s overall strategy on how to deal with its antitrust problems. For example, you can add BeOS to the list. On Sept. 5, 2003, Microsoft paid Be $23.5 million to settle an antitrust suit. The Microsoft press release also noted that “Be is currently in the process of completing its dissolution.”
But there is more to it than that.
The reality is that for every Windows Server that Microsoft doesn’t sell, it is in danger of losing the entire stack, the services, and the applications on top of it.
“It’s like losing the keystone in an arch,” Rob Enderle, principal analyst at Enderle Group, tells me.
So what are these deals really buying Microsoft? Some might say, as Ballmer did at the Novell press conference, it is just listening to what customers want. But there is an old curmudgeonly reporter in me who sees something else.
Despite promises of interoperability, Microsoft does not disclose the technical linkages between its desktop products such as Office and the server-side products such as e-mail. You need these disclosures for full interoperability. Although the spin promises interoperability, with Apple, Sun, and Novell, I wonder if it isn’t a brilliant ploy to ensure that IT will get locked in to using Microsoft products. Take the latest deal with Novell. Novell in essence has done nothing less than validate the Microsoft path. Microsoft now has a Linux solution coupled to Microsoft, adding legitimacy and the Linux cachet to Windows.
Further, the cynic in me says that through virtualization, Microsoft will surround Linux so that Linux will run as a guest on a Windows platform, with Windows underneath. In time, Microsoft might improve the function and performance on the Windows side, but Linux will somehow get disadvantaged. Then, says the Microsoft salesperson, “You are already running Windows. Why don’t you use Windows up and down the stack? It works better anyway.”
Five or 10 years from now as Microsoft continues this strategy, IT will wake up and discover it is not the heterogeneous shop it thought it was. And I wonder: If that happens, will we ever get the full benefits of innovation and competitive pricing?