The moment the Court of Appeals verdict was out Microsoft's powerful PR machine cranked into full spin cycle. Millions of dollars were spent in a matter of hours to manipulate public opinion. Flacks and lobyists fired up the phone banks and called reporters, journalists, politicians, TV personalities and even members of Chambers of Commerce to spread the official spin. Within hours everyone knew Microsoft had won a great victory for "The Freedom to Innovate(tm)".
Why was this spin campaign so successful? It was intense, but more important everyone already knew Microsoft was going to win. They knew that because Microsoft had been telling them so for months.
Even so, some where not fooled.
What Actually Happened?
With a libertarian, strongly pro-business Court of Appeals (known to dislike the convicting judge), and a Republican Department of Justice, Microsoft was totally confident their anti-trust conviction would be overturned.
What they didn't count on was judicial integrity. The Court of Appeals judged the case on merit rather than on prejudice. Microsoft lost on every single point. The court held that:
The court also included firm guidelines on how to judge which Microsoft actions are illegal and which are not.
Where the Court of Appeals disagreed with the District Court was on matters involving the penalty phase of the trial. Even so, they did not "overturn" the decisions of the District Court, they set them aside to be retried before a different judge. The Court of Appeals did say judge Thomas Penfield Jackson had given the "appearance of bias", but stated that careful examination of the case showed no actual evidence of bias.
A number of other flaws in the penalty phase were mentioned, including the way the DOJ argued the points of browser tying. The DOJ must re-argue these points, and the Court specified exactly what they must to do prove them, which they almost certainly will do.
What Happens Now?
First and foremost, Microsoft stands convicted as a predatory monopoly in clear violation of the law. They have no realistic hope of appeal, even to the Supreme Court.
Will There be a Settlement?
Microsoft executives say they want a settlement, but this is just a public relations ploy. They told the government they won't negotiate if "structural remedies" are considered, knowing full well this is unacceptable to the States.
There's much less on the settlement table now than in the original settlement negotiations. Then, Microsoft could have avoided conviction as a monopolist by settling. Confident they would win on appeal, they would not accept a meaningful settlement, so they must now negotiate from a severely weakened position as a convicted monopolist.
Microsoft will, however, engage in settlement talks as a delaying tactic. Their strategy is to do as much damage to the industry as they can before they are finally punished. The more delays, the more damage they can do.
Of course, a settlement later in the game is still possible if Microsoft sees its case as totally hopeless.
How Does this Affect Your Business
Business technology decisions will be increasingly complex and increasingly critical to business success. Microsoft has used it's monopoly power to stifle new and innovative technologies. Companies with new ideas were simply bought and liquidated. With that monopoly power weakened, we will again enter an era of rapid change.
Microsoft will continue to offer the "path of least resistance", but that path is no longer the main highway. Microsoft's PC centric technologies are dated and they are engaged in a desperate scramble to retrofit them to a network centric world. This will not be entirely successful.
Linux, IBM and Sun are particularly well positioned as business transitions from PCs to the network centric model. Larger companies are already moving specialized systems to Web and Linux based applications. A prime example is Home Depot's store system. This trend is also starting to appear in smaller businesses.
Aware of this threat, Microsoft has launched the .Net and Hailstorm initiatives to make it look as though the new technologies are coming from Microsoft. Their goal is to tie businesses and consumers so tightly into their system they can establish a new monopoly.
A major part of the .Net strategy is to centralize the software you use and your own business and personal data on Microsoft owned serves so they can charge you a monthly fee for access to your own stuff. Access will be, of course, by Windows PCs and Windows mobile devices, only through Microsoft's .Net servers and only by using Microsoft .Net software, which you rent by the month. Fall behind on your .Net payments and you are out of business.
This is not speculation, folks, this is precisely what Microsoft is telling us they intend to do, and we see no reason not to believe them. Of course this will bring them right back into anti-trust court, and once again they will seek to delay conviction and remedy until it is too late to do any good.
Businesses that embrace and deploy new technologies intelligently, retaining ownership of their software and data in the new network centric environment, will have greater flexibility, lower costs and a sweeping competitive advantage. Those who follow "One Microsoft Way" will remain mired in the PC desktop era, but with their business data, personal information, software and network access under the control of a convicted monopolist.
- Andrew Grygus
- Automation Access
Velocity Networks: Network Consulting Service - Internet Service Provider - Web Page Design and Hosting
All trademarks and trade names are recognized as property of their owners