A Humbling Ordeal

Like everyone else in the IT industry, I’ve been following the Microsoft anti-trust trial. It’s fascinating stuff, and I’m amazed at some of the facts that have come to light.

On the surface, the trial is about Microsoft using its power to bundle Internet Explorer with Windows 98 to the detriment of Netscape. But at a deeper level, the trial is about much more. It’s about big egos and who will have the power in our industry for a long time to come. The trial directly affects all of us because vendors will make major product decisions based on the outcome.

The trial has taken a few strange twists.

Remember several months ago when the folks at Microsoft arrogantly defied the court and told the judge it was impossible to separate Internet Explorer from Windows 98? I’ll bet the Microsoft guys privately howled with laughter when the judge removed the icon from his screen and asked them to explain why that meant Internet Explorer wasn’t really gone.

The Microsoft guys sneered at the whole world early on. They insulted the court, they insulted the congressional panel looking into competition in the IT industry and they insulted anyone who questioned their motives.

And then -- after arrogantly telling the world that removing Internet Explorer would ruin Windows 98 -- they bungled their videotaped demos purporting to prove it. And in an exhibition of incompetence, they bungled a second chance by doctoring the demos.

We can all learn a lesson from Microsoft’s behavior. I believe that when an organization becomes too cocky, the people inside become sloppy. They forget to do their homework and assume the rest of the world is too dumb to catch on. Such organizations become vulnerable when this happens.

To its credit, the government did its homework. Suddenly the Justice Department lawyers were not as technically inept as Microsoft may have hoped. They devastated the demos and barbecued Microsoft’s witnesses to the point that I had a hard time keeping up with all the plots and subplots that emerged.

For a while, it seemed as if every day unveiled another bombshell. First it was Microsoft executives contradicting each other, their own e-mail and Bill Gates. Then came the videotape fiasco. Next we learned about Microsoft’s tactics against IBM when Big Blue refused to abandon OS/2. And, most recently, we learned that Microsoft leaked a bunch of documents about the AOL and Netscape merge as a public relations ploy.

Now, I’m just a skinny bald guy from Minnesota, but it seems to me that unless Microsoft offers an attractive deal to the government during the next few weeks, the court will take those boys out behind the woodshed and spank them hard. I see no way the judge or any appeals court could possibly rule in Microsoft’s favor.

Spanking a Microsoft that’s gotten too big for its britches might be good everyone, including Microsoft. But the consequences could be bad for everybody. Do we really want the government involved in software design decisions? Do we want a judge or government panel approving new product releases?

For Microsoft’s own good, and everyone’s best interest, I hope this trial is settled quickly.

If I were a Microsoft decision maker, here’s what I would offer: First, no more secret deals with hardware vendors and no more penalties for not dropping a competing product. That is the essence of monopoly power, and Microsoft seems to have abused it for years.

Next, release the source code for Windows 95/98, Windows NT, Windows 2000 and all future versions of Windows. Offer source licenses to any takers for a few hundred bucks, in return for buyers registering with Microsoft and agreeing to pay royalties for any products sold that are based on that source code. Put in lots of stringent anti-piracy controls, but allow other vendors to add value to the Windows code base as they see fit.

In return for these concessions, the government would drop the lawsuit and stay out of the software design business.

The writing is on the wall for Microsoft -- the software world is changing. Microsoft can fight it and lose, or it can change its tactics, offer this deal and still collect royalties. And if history is any guide, this could be a good deal for Microsoft. Remember the famous IBM consent decree a generation ago: IBM grudgingly agreed to sell their hardware instead of only offering leases. IBM’s profits soared after they signed that decree, even as costs dropped for buyers. It was good for everyone.

If Microsoft swallows its pride a little bit, the same thing could happen here. The Microsoft code base could become a de facto standard and could spawn an entire competitive industry, with all players gladly paying royalties to Microsoft. So, Mr. Gates -- how about it? Will everyone win by settling, or will Microsoft lose when the court decides? --Greg Scott, Microsoft Certified Systems Engineer (MCSE), is Chief Technology Officer of Cross Consulting Group (Eagan, Minn.). Contact him at gregscott@scottconsulting.com.