Panel Conclusion: Microsoft Will Survive

LAS VEGAS-- Microsoft is the big dog on the IT porch. But with the emergence of theInternet, handheld devices, the governments anti-trust action, and distributedcomputing, will this remain the case? These questions about the future of theworld’s most recognizable and controversial computer software company were putto a panel of experts here at Fall Comdex.

PanelistDan Kusnetzky, program vice president, system software, at IDC, said Bill Gateshas at the very least realized that his company can’t stand still and keeprelying on Windows and Office sales to stay on top. “I think Microsoft viewsthis as their industry. But Gates is seeing that the PC is no longer the sunwith every planet revolving around it. He’s not sure what the next big thingis, so he wants to be involved in everything,” Kusnetzky said. “It’s hard to saywhere they’re going -- they’re going everywhere.”

Kusnetzkypointed to Microsoft’s efforts -- either through in-house development or thefunding of other companies -- of wireless and broadband technology, serveroperating systems, hardware, embedded operating systems, and “investment incompanies everywhere.” He said Microsoft could be spreading itself too thin,trying to keep its finger in every pot in the industry.

Everyoneacknowledges Microsoft’s chief direction is its .NET vision of software as a service,with information delivered through the Internet to any device in any form theuser wants. The panelists, speaking to an audience of about 100 ITprofessionals, had mixed feelings about the new direction.

PanelistChuck Toussieng, manager of the internal applications group at Digital Island,said he sat through three .NET demonstrations at the Microsoft pavilion atComdex, and came no closer to fully understanding what it is or does. He didhave good things to say, however, about the underlying .NET technology of XML.“Microsoft is coming out with products and methods that fly over connections.[XML] is pretty powerful at the base level.”

Joe Levy,president and CEO of the publishing company CXO Media, sees a Microsoftstrategy of gradual implementation of .NET in the enterprise. “I think they’rehedging their bets, and seeing if they can get .NET embedded in everything,”Levy said. Once embedded, Microsoft will have more leverage in the Internetspace.

Kusnetzkysaid he sees the same kind of creeping .NET presence. “It starts with Exchange2000, SQL 2000 -- [products] that already have .NET components, so you’llupgrade to [full] .NET in the future,” Kusnetzky explained. This can already beseen with Whistler, the next iteration of Windows 2000, which will haveenhanced XML capabilities.

As for theanti-trust lawsuit and Judge Thomas Penfield Jackson’s order to split thecompany down the middle, the panel was skeptical of this happening, or theimpact it could have on Microsoft if it does.

Levy said,“Gates is convinced they’re going to beat the government. The reason Microsoftwon’t be broken up is because it’s not what Bill wants.”

Toussiengsaid the impact of a breakup could be minimal. “Even if Microsoft is broken up,what happened to AT&T [when the government broke it up]? Microsoft has somany divisions…do you think if they’re broken up, they won’t send each othere-mail about what they’re doing?”

Kusnetzkyadded that depending on what happens with .NET, “The whole court case may bemoot by the time [the final resolution] comes down,” since the case was basedon previous events that have no bearing on Microsoft’s new direction. He saidit’s in the company’s best interests to get .NET into the mainstream as soon aspossible. For Microsoft, “this is a race -- can they get this on the groundbefore the judge’s decision?”

Thepanelists and most of the audience -- which was polled on differentMicrosoft-related issues -- seem to believe that Microsoft’s future is solid,if not the spectacular success it was in the ‘80s and ‘90s. Other products maybe flashier or have more advanced technology, Levy argued, but better the devilyou know. “CIOs don’t care about best of breed. They want something that works.They’re convinced Microsoft will be here five years from now. They don’t knowif other vendors will be here five years from now.”

Kusnetzkyagreed. “CIOs are looking to lower costs and making sure things work. Microsoftcan very strongly make the case that if you have Windows 2000 on your server,if you look at the whole picture, it will cost you less.” The products may notalways work the best, he said, but they work well enough and are tightlyintegrated.

Theaudience was asked about what recommendations they would give Bill Gates ifthey could have his ear. Some suggestions included stop trying to mandatehardware design; make Microsoft’s products stable; adhere to widely acceptedstandards rather than violating them; and make upgrading easier and cheaper.

Microsoft Corp., Redmond, Wash.,
IDC, Framingham, Mass.,
Digital Island Inc., San Francisco,
CXO Media Inc., Framingham, Mass.,