Users Largely Skeptical of Plan to Split Microsoft

FRAMINGHAM (05/01/2000) - For a variety of reasons, end users are largely skeptical of the government's plan to split Microsoft Corp. in two.

Many end users, in interviews today, said they doubt that the government's proposed breakup would have much impact on the industry or their product decisions. But they worry that a breakup could lead to integration problems and possibly hurt Microsoft's product development.

Some users, such as Ashok Bakhshi, manager of application systems at Schindler Elevator Corp. in Morristown, New Jersey., said a court-ordered breakup may be largely irrelevant in the face of an industry shifting to Internet technologies.

"If they had done this five or six years ago, maybe it would have made a difference, but right now Microsoft is not a leader in the new age in any way," said Bakhshi.

There are other reasons why Bakhshi is skeptical about the breakup's impact on information technology departments. Even if users are forgoing best-of-breed software in some cases to use Microsoft products, it's a trade-off worth making, he argued.

"I believe that it doesn't have to be best-of-breed in everything; a lot of times, simplicity and integration is more powerful then best-of-breed," he said.

Other end users see two dominant, powerful companies being created, but not necessarily new competition.

"I think the remedy is going to produce two big gorillas instead of one big gorilla," said Michael Redman, information systems director at Nicholson Manufacturing Corp. in Seattle. Nicholson makes a variety of products, including presses for hay bales and aerospace tools.

"It isn't clear to me that splitting the company into two pieces is going to change much as far as competition is concerned. Half of a very big company is still a very big company," said Redman.

The government on Friday filed its remedy plan in U.S. District Court in Washington in the Microsoft antitrust case. The plan seeks to separate Microsoft's operating systems from the applications, which include Office, servers and developer tools. The plan also calls for a host of interim remedies, including requiring Microsoft to share application programming interfaces with third-party developers as soon as they are used internally.

Microsoft will file its response May 10. A hearing is set for May 24. Appeals may delay any final conclusion in this for anywhere from one year to several years, less if the case is sent directly to the Supreme Court.

Any breakup, if it were to happen, is many years away. But users are already mulling the potential impact.

Andy Balazs, vice president of information systems and services at Medical Mutual of Ohio, said he doubts a breakup will make his job easier.

"I just don't (see) where I'm better served in having one more salesman in my office and having one more company to deal with," said Balazs. "I don't see where it makes my job as an IT buyer any easier."

Balazs doesn't rule out the possibility that a split-up could improve competition, but that doesn't necessarily bring new benefits to IT managers, he said.

"My cost of conversion is way higher then the benefit of conversion," said Balazs. "If you start out as a full Microsoft shop, you probably wouldn't spend the money to convert."

A breakup isn't going to change the pace of innovation in the high-tech industry, argued Nancy Bauschinger, IS director at RIS Insurance Co. in Berkeley, California.

"Innovation is going to happen in this world, because we're all driven by curiosity. It's going to happen no matter what," said Bauschinger. "Microsoft is not driving innovation in the world of technology."

Enrique Crespo, global messaging manager at Ingersoll-Rand Co. in Woodcliff Lake, New Jersey, said he supports the idea of separating Microsoft applications from the operating systems and believes it will spur competition.

But before that happens, end users aren't going to have it easy, he said.

"I can tell you categorically that we, the user community, are going to suffer in the first few years," said Crespo. Integration issues will be the key problem, he said.

Jerry Richards, vice president of systems at Wausau Insurance Wausau, Wisconsin, said he believes a breakup would be a "big mistake" that could hurt consumers in the end. He also worried Microsoft's battle will distract it from its own internal product development.

"I would be more concerned that it would freeze or delay a lot of the progress that has been made around NT and Windows," said Richards.

Richards said he believes that the government's case is wrong. "I don't think they've done anything wrong. I don't think they hurt me. In fact I think they've helped my company."

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