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Column/Microsoft Stays As One – Maybe That’s Too Bad

With the Department of Justice antitrust suit seemingly shifting away from a breakup, Microsoft can better concentrate on building its next generation of software. And we're left asking, "what if?"

What if Microsoft had been divided into a separate applications and operating systems company? Don’t get me wrong – I think the DOJ suit was wrongheaded meddling into a market that changes too fast for anyone to monopolize. And while there’s always plenty of price-gouging going on, Microsoft certainly doesn’t have a monopoly on that. (Besides, the whole issue was over "free" software, right?) But, Microsoft really is two companies anyway, with two conjoined business lines. With a few exceptions, Microsoft’s applications only support one core operating system. In the enterprise space, this is a risky strategy for independent software vendors. Is this still a viable strategy for the "Applications Microsoft"?

IBM abandoned its one application/one operating system approach some time ago, and has separated much of its software from proprietary operating systems (and has encouraged its ISVs to do so). Big Blue, the undisputed king of proprietary platforms, has recast itself in the image of a "platform-neutral" vendor. Through .NET, Microsoft has taken some steps in that direction.

Granted, Windows 2000 is proving to be a robust and scalable operating system. And with it, Microsoft is successfully chasing Unix and mainframe systems upstream into the enterprise. But with the rise of Web-enabled computing, Java, and Web services, the larger "legacy" systems have a new lease on life. At the low end, Microsoft finds itself increasingly fighting to defend its core base against Linux. The open-source operating system has been eating into that base, the small and departmental-level server market. Likewise, the device and handheld markets – not exactly Microsoft turf yet – have been usurping the rule of Windows PCs as clients. So Windows is being squeezed into a mid-market layer – a big layer, but nonetheless showing its limits.

The Linux threat is not overblown. The operating system is growing the same way Microsoft grew up many years ago – through the grassroots, underneath the corporate radar. Let’s face it, DOS was the Linux of the 1980s. When DOS-based Intel machines came on the market, they were cheap, and quickly deployable for small applications and databases. DOS on Intel broke the mold with revolutionary commodity pricing for hardware and software. And, significantly, the software was separated from the hardware.

Now the same forces are working in Linux and open source's favor. Open source takes the commodity pricing and software-hardware separation model and takes it a step further. Since Linux and other systems can be informally deployed on both old and new Intel systems, its reach into the enterprise is occurring stealthily, and cannot be tracked in market numbers. An old Pentium-based server that can’t support Windows 2000 can be easily pressed back into service running Linux. Deployments are informal, as-needed, and quick. I recently spoke with one company that delegated the task of setting up its Linux-based e-mail server to a summer intern. Concern about restraining IT budgets makes Linux and open source even more attractive.

Unbundling Microsoft applications from Windows would have opened up new possibilities. SQL Server, Exchange, and Commerce Server, no longer tied into the Windows operating system, could run on Linux boxes. Last year, some analysts speculated that a court-mandated breakup could have put a Microsoft applications gorilla right into the middle of the Linux market. Sure, there is extremely tight integration between Microsoft applications and operating systems. But imagine the possibilities. Instead of fighting Linux and open source, Microsoft could have embraced it. Joseph McKendrick

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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