It's old news by now: the European Commission has slapped Microsoft with a fine of 497 million euros and given the company a few months to strip its Media Player out of Windows and disclose the Windows server interfaces. Heck, it was already old news even before the official announcement, since word leaked out almost a week early.
The short-term word to corporate IT departments is old news, too: when a vendor is under fire, negotiate for better terms. If you can, leverage Microsoft's troubles to get a sweeter deal.
Is that a brutally tactical view? Sure. Is it in Microsoft's best interest? Maybe not. But you're not working for Microsoft. And Microsoft -- or any other vendor -- would do it to you if the situation were reversed.
You're not willing to negotiate hard with Microsoft at a time like this? Then don't complain about Microsoft's prices or terms. That's true of every other vendor, too -- IBM, Dell, SAP, Hewlett-Packard, Oracle, Cisco, Sun, right down to the smallest players. Either you take your opportunities, or you accept what vendors dictate.
OK, that's the story for the short term. But what does the European Commission's decision to slap Microsoft mean a little further out?
It might not mean anything. It might mean a seismic shift in the balance of power in the software business (but it won't). Or it might mean good news for Microsoft and all its customers.
What if Microsoft appeals and wins? Nothing changes. No impact.
Or what if Microsoft just has to pay the fine but doesn't have to limit what it bundles into Windows? The fine is about 1 percent of Microsoft's current pile of cash. No impact.
What if Microsoft loses and, instead of knuckling under, decides to walk away from Europe? Huge impact -- Microsoft's revenue would immediately drop by 30 percent. But that won't happen, if only because Linux would instantly become the de facto standard in Europe. Microsoft would pay any fine and gut Windows of any bundling rather than cede a third of the world to Linux.
Or -- here's a wild idea -- what if Microsoft loses and then gets serious about competing?
It could happen. True, Microsoft's business strategy for almost 30 years has been based on bundling. First it was Microsoft Basic bundled with early desktop computers. Then customized versions of MS-DOS bundled with early PC-not-quite-compatibles. Then MS-DOS bundled with virtually every PC, then Windows and Office bundled with PCs, then Web browsers and media players bundled with Windows.
Microsoft has searched for new business lines for years. But there's never been any urgency -- everyone in Redmond knows that only Windows and Office have to make money. Anything else can be bundled or piggybacked or "integrated" with those products.
But what if Microsoft decided to light a fire under its employees and cut the legs out from under its antitrust foes with a single stroke? What if Microsoft abandoned integration and simply made great add-on products that worked better than those of its competitors?
Suddenly, every product group in Redmond would be under the gun to get it right the first time. And leapfrog the competition. And listen to customers. And market like crazy.
Stripped of that bundling cushion, Microsoft products would have to get a lot better, a lot faster, on their own. Competitors would have to get better faster, too. The whole industry would have to get sharper.
The culture of Microsoft would be revolutionized. Microsoft employees would become aggressive competitors instead of defensive monopolists. They'd have to -- or they'd be gone.
And with no more bundling, the biggest antitrust accusation against Microsoft would be gone, too.
Best of all, IT shops would get the benefit of all those better, competition-honed products. That would be news.