Users Stick With Microsoft Despite Monopoly Label

FRAMINGHAM (04/10/2000) - Even users who are appalled at Microsoft Corp.'s hyper aggressive business behavior or who think the vendor has caused harm aren't likely to choose the high road over financial realities.

Trust, integrity and other hard-to-measure traits do factor into business choices. Yet users are torn between caring about such characteristics in Microsoft and trying to make smart business decisions.

Although 45% of 132 information technology professionals surveyed by Computerworld last week said Microsoft's practices have hurt users by stifling competition and innovation, not many seem inclined to act on it.

Charles Stevens, vice president of the Enterprise and Partner Group at Microsoft, said last week that the case isn't the most pressing topic that CIOs bring up in meetings with the vendor. "It's about the 20th question that comes up," he said. Customers whom he talks to like Microsoft and continue to want to do business with the company, Stevens added. "We've always had the highest standard of ethics," he said. "We make many mistakes. The only thing you can do is be very honest and work doubly hard to do better."

Some CIOs would like to consider a vendor's ethics when deciding whether to do a deal, but they don't have that luxury when it comes to Microsoft, said Deb Mukherjee, chief technology officer at Farmers Insurance Group of Companies in Los Angeles.

Even if a user wanted to move off Windows, Mukherjee said, "changing infrastructure is so expensive that, at the end of the day, [financial concerns] win."

Yet IT managers must share some of the blame for Microsoft's competitive excesses, said Clifford Dubord, IT manager at a nuclear power plant owned by Niagara Mohawk Power Corp. in Oswego, N.Y.

"I think in many cases, the IT industry fostered what Microsoft did, enabled it," by not protesting forcefully against Microsoft's high-pressure tactics, Dubord said.

Indeed, that often happens under monopoly rule, said David Aaker, co-author of Brand Leadership (Free Press, 2000) and a former professor at the University of California at Berkeley.

The dominant company has "such great market power, so people sort of accept it.

They got used to it," Aaker said.

A monopolist doesn't necessarily abuse its power, but knowing it doesn't have much competition often fosters bad behavior, said Thomas Donaldson, a corporate-ethics professor at The Wharton School at the University of Pennsylvania in Philadelphia.

"The market usually self-corrects unethical behavior," he said. That is, people stop buying from companies whose tactics they don't like.

"But with strong monopolies, it's difficult," Donaldson added. "The product the customer wants is locked up [by one vendor]."

And customers know it. Microsoft has "pretty much done whatever they have chosen to do, with little input from the ultimate consumer as to whether we agree with it, disagree with it, like it or don't like it," said Cam Franklin, an infrastructure manager at Alcoa Building Products Inc. in Sidney, Ohio.

Moreover, customer loyalty involves making two commitments to a company: financial and psychological, said Patricia Obermaier, president of The Alleris Group Inc., a consultancy in Herndon, Virginia. "It's the psychological part that might give Microsoft trouble right now," she said.

Meanwhile, the rhetoric has turned personal in Microsoft's public relations campaign to discourage a drastic remedy. As much as they say the antitrust suit doesn't distract them, the company's two top executives are very much personally involved in the campaign.

On Defense

After the ruling, Steve Ballmer, Microsoft's president and CEO, said he found "disturbing" what he called "veiled references to our values" in Jackson's ruling.

"We are a company with incredible integrity," Ballmer said. "I know how we run the business, and the intellectual honesty and personal honesty we demand from our people internally and in dealing with third parties."

Microsoft Chairman Bill Gates then flew to Washington last week to tell his side of the story to select members of Congress in closed-door sessions.

Although some pundits have said Microsoft has tempered its behavior during the 2-year-old antitrust case, most respondents in the Computerworld poll disagreed.

Just 15% said they had experienced a difference in Microsoft's behavior since the case was filed in May 1998, citing improved customer service and a better attitude in general.

However, it would be hypocritical and an implied admission of wrongdoing if Microsoft changed dramatically now, said Yee Wah Chin, an antitrust lawyer at Squadron, Ellenoff, Plesent & Sheinfeld LLP in New York.

"It would be like Hillary baking cookies," Chin said.

Staff writer Kathleen Ohlson contributed to this story.

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