Microsoft's Waiting Period Begins

SAN MATEO (06/07/2000) - Now that U.S. District Judge Thomas Penfield Jackson has officially called for the breakup of Microsoft Corp., the high-tech industry will have plenty of time to sift through the restrictions Microsoft must live under, and ponder the possibility of two Microsofts.

"It's all very anticlimactic," Al Gillen, an International Data Corp. analyst based in Iselin, New Jersey, said Wednesday. "It's going straight to appeal."

Many observers shared Gillen's sentiments, both because Microsoft has vowed to fight Jackson's ruling, and because a court-ordered split of the software giant has been a distinct possibility ever since the judge ruled that the company had violated U.S. antitrust laws on April 3.

"I'm just glad there's going to be a break for a while," said one attendee at Microsoft's TechEd conference in Orlando, Florida. "I'm more concerned about the [Sun Microsystems Inc.] Java lawsuit against Microsoft, anyway. That affects what I'm interested in -- Java development for Windows -- more than the Justice Department's case."

Jackson determined that Microsoft had not only maintained a monopoly on the operating systems market with Windows, but it used that monopoly to dominate other markets, most notably Internet browsers.

The breakup plan would create a separate Windows company. The other company would handle the rest of Microsoft's offerings, such as its popular Office desktop applications suite, server application products and Internet endeavors.

The uncertainty hanging over Microsoft's future is cause for concern in many shops, large and small, that have made heavy investments in Microsoft's software.

"I suppose they have acted like scoundrels in the way they have put this empire together," said one business analyst with an East Coast brokerage, "but we have so much invested in their servers and clients that it will be much better for us if the government does not break them up. We will be dealing with the cleanup for a couple of years."

She added that until there is some resolve in the case, her firm will cut back on further investment of Microsoft platforms, particularly servers, and will explore the possibilities of alternativesOpponents of government intervention expressed apprehension over the turn of events.

"If Microsoft did something wrong, they should be punished," said Sam Patterson, CEO of, a software component collective in Marietta, Georgia. "But we can't have a remedy that hurts the most innovative industry we have, the IT industry. To put shackles on anyone ... that would hurt this industry."

Patterson - who serves as treasurer for the Association for Competitive Technology, a Washington D.C.-based industry trade group that has been steadfast in its defense of Microsoft, a dues-paying member -- said "time will tell" whether a breakup order stands up on appeal.

However, he said any government regulation of the software maker will be a dangerous precedent.

"I don't care if it's about Microsoft, Sun, or Component Source," Patterson said. "If the government gets involved and doesn't understand the [technological] issues, we have a huge problem. Am I going to be hurt if I add features to my application?"

Gillen said Jackson's goal of curbing further monopolistic abuse by Microsoft is coming at a critical time, as the company is integrating Web services into its operating system and Windows 2000-based server applications.

"Microsoft is slowly but surely tightening up the holes for competitors to play in the server infrastructure market," Gillen said. "A breakup would affect some of that integration, but does it do anything to prevent, for example, Commerce Server from favoring SQL Server? Probably not."

Microsoft Corp., in Redmond, Washington, is at

The U.S. Department of Justice is at Jackson's ruling can be viewed at

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