Redmond's real woe

The trouble with talking about the Microsoft antitrust settlement is that everything keeps changing.

          The trouble with talking about the Microsoft antitrust settlement is that everything keeps changing.

          No sooner were industry pundits screaming about how the Justice Department's settlement deal is a politically motivated sellout than the focus shifted to speculation about what would happen if the states didn't sign on. And then how many states wouldn't sign on. And then whether Microsoft. would pull out of the deal. And then whether the judge would delay remedy proceedings while the public comments on the proposed settlement.

          And that was just in the first five days.

          Of course, for most corporate IT people, this is a sideshow. While Judge Colleen Kollar-Kotelly collects comments on the proposed settlement and holds remedy hearings for the states that rejected it, we're a lot more concerned about how we can keep from losing our staffs as our budgets get slashed.

          Besides, a lot of IT people are asking, will anything the court does really force Microsoft to change?

          It's a little late for that. Change isn't coming. It's already here.

          For Microsoft, change started arriving in early 2000, when its stock price stopped doubling every year and started to drift.

          More change came in the months that followed, as the dot-com economy went from go-go to gone-gone, and the huge pile of cash Microsoft had quietly invested in other companies turned into, well, a small pile of cash.

          Then still more change, as more and more big corporate customers decided they were finally satisfied with their Microsoft products and stopped upgrading.

          And yet more change as increasing numbers of consumers, worried about the cooling economy, decided they didn't need new PCs either and stopped buying.

          Along the way, wireless handheld devices (you know, cellphones with screens) became the Next Big Thing and Microsoft wasn't a player. The internet turned out to be a great place for shopping but not so popular for buying while Microsoft had bet heavily on .Net and Passport. And when Microsoft tried to strong-arm its customers into upgrading in lockstep, customers didn't just resist, they slapped back hard and Microsoft had to back down.

          And, oh yeah, Microsoft's appeal to the Supreme Court was denied, and the ruling that Microsoft is a lawbreaking monopolist was pretty much set in stone.

          That last one is what the court is worried about now. What Microsoft should be worried about is all the rest.

          Microsoft's financial and compensation model depends on a stock price that keeps climbing. Its product sales model depends on customers who keep upgrading. Its planning model depends on being able to control the game and limit change.

          In other words, right now, Microsoft's whole business model is broken. Being declared a monopoly and having to face the music is just adding insult to injury.

          Microsoft doesn't really need to illegally leverage its Windows monopoly. What Microsoft really needs are some new ideas. PC operating systems are no longer a growth market. Neither are office applications or web servers and e-commerce infrastructure isn't looking like the next rocket to the moon, either.

          The IT world has changed. Microsoft needs new products to survive that change. If it finds them, the company will have a new direction a new way to grow. If it doesn't, Microsoft will soon be clawing at corporate IT customers for every loose nickel, desperately searching for any way to stay alive consent agreement or no consent agreement.

          So when Microsoft rolls out its Xbox game machine this week, watch very closely. Sure, it's another sideshow but for IT shops, it could be a sideshow that matters. And for Microsoft, it could be the future.

          Hayes, Computerworld US' senior news columnist, has covered IT for more than 20 years. Send email to Frank Hayes.

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