IT leaders split over Microsoft breakup

Reaction among US IT Leaders to Wednesday's order that the software vendor should be broken into two pieces covered a spectrum from uncaring to angry to glad.

          Reaction among members of Computerworld's Premier 100 IT Leaders to Wednesday's order by US District Court Judge Thomas Penfield Jackson that the software vendor should be broken into two pieces covered a spectrum of reactions ranging from uncaring to angry to glad.

          "I think it will make it harder (for users). Microsoft is a standard that we all use," said Ed Toben, CIO at Colgate-Palmolive in New York. The breakup would destroy that standard, which could mean higher costs and reduced end-user confidence that all the parts of a corporate system would work well together, Toben added.

          At the other end of the scale was David Greenblatt, chief operating officer at Net2Phone in Hackensack, New Jersey. While Greenblatt said splitting up Microsoft might cause some initial confusion and turmoil in the IT industry, he predicted that the move eventually would mean better products, more ideas and greater competition.

          Jackson ordered that Microsoft be separated into two companies — one for its operating systems and the other for the rest of its software products. The judge basically okayed a breakup plan put forward by the US Department of Justice, a move that Microsoft said it would appeal.

          While most of the 15 IT Leaders interviewed in the aftermath of Jackson's order agreed with Greenblatt that the breakup will lead to an initial phase of confusion and turmoil, they weren't as unified on his assessment that the long-term benefits would help users as well as the software industry.

          Bill Homa, CIO at Hannaford Bros. in Portland, Maine, and Allen Joust, vice president at San Diego-based eHNC Inc., agreed for the most part with Greenblatt that the world would be a better place with two Microsofts instead of one.

          However, Toben's position that the breakup would hurt users drew support from Jim Prevo, CIO at Green Mountain Coffee in Waterbury, Vermont, Boris Bosch, head of database administration at New Orleans-based Energy Services Inc. and William Wallace, CIO at WingspanBank.com, the Internet-only banking division of Wilmington, Delaware-based First USA Bank NA.

          "I think Microsoft was absolutely stupid in the way they strong-armed the industry over the years," Prevo said. "There was no reason for it, and they really cooked their own goose. They acted more like a group of arrogant propellerheads than responsible businesspeople."

          But Prevo added that he's concerned about the breakup order's potential for handcuffing Microsoft's technology development. "I do think Microsoft should be punished for its illegal business practices of the past," Prevo said . "However, I'd like to see (users) benefit more from the remedy than Microsoft's competitors (do). I don't think that is the case in the current judgment."

          Despite its warts, Microsoft made possible a world in which IT departments could support more homogenous computing environments where data flowed freely between applications, and barriers to switching from one hardware vendor's systems to another's were reduced, Prevo said.

          The dominance of Windows "gave the market exactly what it wanted ... at the expense of the natural forces of evolution," he said. "A single big vendor does naturally stifle innovation and experimentation. It's a fact of life. We have to decide which we want most and make it legal for that environment to exist."

          That's a sentiment shared by James Barry Jr., CIO at Last Minute Integrators LLC in Beverly, Massachusetts. "It won't change who we buy from, but it will add another layer of complexity, one that is probably unnecessary," he said.

          While the DOJ may think a breakup would be beneficial to corporate users and consumers, "we have seen no negative impact from Microsoft as it is," Barry said. "There are other ways of dealing with unfair competition without breaking up the company. I don't even see it (the breakup) as helping the consumer to a great degree."

          The fact that Microsoft products are so tightly integrated has been a benefit for Last Minute Integrators because it kept costs down, Barry said. With a breakup, it may not be as easy to ensure that the products he chooses will be as tightly integrated as they were before, which may mean higher operating costs and more complexity, he added.

          Another IT Leader who thinks the decision would cost users is Gary Cooper, vice president of information systems at Tyson Foods in Springdale, Arkansas. "It isn't obvious to me that Microsoft needs to be split up," Cooper said, adding that the real impact of the breakup will probably be a doubling of the overhead work for his back-office IT staff.

          The real winners in Bosch's opinion were Microsoft's opponents and not users. "I think the government went a little bit too far on this one, in my humble opinion," he said. "Those types who are happy it happened to Microsoft, like Oracle (and) other competitors, they better watch out. It could happen to them next."

          However, Bosch said he doubts the breakup will impact his company or its technology purchasing plans at all. "It shouldn't," he said. "It isn't going to change the technology, just the way they market the technology."

          Both Prevo and Wallace also said that a post-Microsoft world is going to end up costing companies time and money because vendors will engage in "finger-pointing" exercises whenever there's a problem with systems or application.

          But Homa had a more optimistic view. The planned breakup should "be healthy for IT because I think it will open up competition," he said. "It will make PC manufacturers less reluctant to deal with other (software) vendors and to offer other options (besides Microsoft's products)."

          At first, the breakup may mean increased costs for everyone because "right now we have all of our eggs in one basket," Joust said. But he added that he's willing to bear added costs for what he sees as the longer-term benefit of the breakup. "It will make things better," Joust said. "There will be more competition, more companies to meet people's needs."

          Mark Mathias, president at Los Angeles-based Eureka Digital, also voted in favor of the breakup's ultimate benefits.

          "In many ways, I think the breakup of Microsoft could potentially be advantageous," Mathias said. "Microsoft is a huge, huge company, and making it a smaller company could make it potentially more agile. There could be some very creative things to come out of two companies."

          While Homa agrees, he said he doesn't expect Microsoft to go down quietly. "I expect they will fight it in every way they can and not bend at all," he said.

          That's another short-term consequence that bothers Premier 100 members such as Toben, Prevo and Keith Thompson at OrderTrust in Lowell, Massachusetts. Microsoft "might be saying it is business as usual, but this is a very unusual event and this has to be taking their eye off the ball," Toben said.

          "The biggest issue for me is the amount of time and money Microsoft is spending fighting the litigation that would otherwise be engaged productively in the development of technology," Prevo added.

          But Greenblatt said those problems will eventually fade and be forgotten as new companies develop in the wake of the Microsoft demise. He compared Jackson's order to the breakup of AT&T in 1984 and said it may create the same kind of fiercely competitive industry that has grown out of the AT&T case.

          But Richard Hudson, CIO at Global Marine Inc. in Houston, cautioned against drawing too many parallels to the AT&T breakup because of the different natures of the telephone and software industries. Hudson said he doubts the decision will have any real impact for the foreseeable future because it will be tied up in court on appeal. "This thing won't be decided for years," he said.

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