Microsoft Fallout Dawning on Users

WASHINGTON (05/05/2000) - It was two years ago this month that the government filed its lawsuit against Microsoft Corp., and many users interviewed at the time said the trial had little importance in relation to their jobs. It was way off their radar screens.

But that's changing.

Users of Microsoft's products are beginning to consider how the trial and the government's plan to split the company in two may affect them.

"I can tell you categorically that we, the user community, are going to suffer in the first few years" if the proposed breakup actually occurs, said Enrique Crespo, global messaging manager at Ingersoll-Rand Co. in Woodcliff Lake, New Jersey. "The worst part is going to be this whole issue of integration."

Despite his contention, Crespo said he supports the government's plan to split Microsoft's applications - including its Web browser, developer tools and servers - from its operating system business. And it may be a "positive thing" for competition, he added.

On Wednesday, Microsoft will file its rebuttal to the government's "radical and overreaching proposal," said company spokesman Jim Cullinan. The company's brief will ask for the opportunity to examine issues raised by a breakup, he said. Microsoft isn't spelling out what it will seek, but legal experts expect the company to ask for new witnesses and evidence to argue its case.

It may take several months or more before the judge imposes a remedy. Appeals will follow. The case could conclude within a year if it is sent directly to the Supreme Court; otherwise, it may take several years. In the meantime, users are questioning what the ultimate fallout will be.

Andy Balazs, vice president of information systems and services at Cleveland-based Medical Mutual of Ohio, said he doubts the value of a breakup.

"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."

Even if a breakup leads to more competition, that doesn't change the economics of information technology purchasing, said Balazs.

"My cost of conversion [to non-Microsoft products] is way higher than 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 key concern is how a breakup would affect application integration. Ashok Bakhshi, manager of application systems at Schindler Elevator Corp. in Morristown, New Jersey, argues that even if users are forgoing best-of-breed software in some cases when they use Microsoft products, it's a trade-off worth making.

"I believe that it doesn't have to be best-of-breed in everything; a lot of times, simplicity and integration [are] more powerful than best-of-breed," Bakhshi said.

The impact of any breakup on IT as a whole will be minimal, according to some users.

"I think the remedy is going to produce two big gorillas instead of one big gorilla," said Michael Redman, IS director at Nicholson Manufacturing Co. in Seattle. And a breakup isn't going to change the pace of innovation in the high-tech industry, argued Nancy Bauschinger, information systems director at Fidelity Insurance Service 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."

But Jerry Richards, vice president of systems at Wausau Insurance Cos. in Wausau, Wisconsin, said he worries that users could be affected if the court case distracts Microsoft from its 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, who said he disagrees with the government's position in the case.

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