Analysts agree that DOJ action targets OS-browser integration

IT analysts agree on one thing - that US Department of Justice court action against Microsoft targets Microsoft's goal of integrating the browser and the operating system. But they differ considerably over whether the action has merit and whether or not it will affect users. This may not be the last piece of bad news for the softweare giant. O'Reilly & Associates has called for a similar probe into Microsoft's practices in the Web server market.

The US Department of Justice's court action against Microsoft won't directly impact consumers much, but may affect Microsoft's strategy to integrate the operating system and browser, analysts say.

"Windows 98 is characterised by the complete integration of the operating system and the Web browser that will be its user interface," a statement from Zona Research says. "If Justice has its way, Microsoft will have to draw a line between the OS and the Web browser, a delineation that is becoming increasingly hard to draw."

The DOJ asked a federal court to hold Microsoft in contempt for violating a 1995 court order barring Microsoft from engaging in anti-competitive practices. The DOJ cited Microsoft's requirement that PC manufacturers license and distribute the Internet Explorer browser as a condition of licensing Windows 95.

Barring Microsoft from integrating its OS with its browser would affect other companies, too, Zona says. If the DOJ achieves the right through the courts to "design and distribute" Microsoft's software, "what prevents Justice from telling other companies how to design and distribute their software?"

Zona's statement predicts that Microsoft will prevail and said that if not, "we are looking at the possiblity of a government managed software industry" and a regulated market that could impede technological advances.

However, Ira Machefsky of Giga Information Group says other software companies would not be held to the same standard as Microsoft, which dominates the desktop.

The DOJ is saying, "Microsoft is not going to be allowed to leverage one platform technology into what we believe to be another platform... [but] other companies are not monopoly powers," Machefsky says. "It's almost as if the judge is going to be asked to decide if the Internet is a platform, or if it's just a peripheral."

Machefsky also predicts that a DOJ victory would result in a diversity of products in the Internet marketplace and less chance that Microsoft will dominate that arena.

A Dataquest analyst predicts that even if the court sides with the DOJ and finds that the browser represents an unlawful extension to Microsoft's operating system monopoly, Microsoft will find a way to achieve its goal of bringing "Windows and the Web together."

Microsoft could include browser-only versions of Netscape Navigator with Windows 95 and future Windows OSes, or create a "minor Chinese Wall" between the Internet Explorer browser and Windows which will evaporate for the end-user, says Allen Weiner.

"As long as Microsoft dominates the operating system and gives people the means to go to different Microsoft applications, they still win," Weiner says.

Dwight Davis, editorial director of Windows Watcher newsletter, and David Coursey, editor of newsletter, both say end-users wouldn't immediately feel the impact of a DOJ victory. That is primarily because many OEMs will likely choose to continue bundling Internet Explorer regardless of what happens.

"Whether this will actually change the marketplace is unclear," Coursey says. "It doesn't mean anyone will choose to bundle Netscape Navigator. ... The more interesting and far-reaching question is whether this means the DOJ is going to take a really hard look at Microsoft - not whether Netscape is going to gain one or three percent marketshare."

Tim O'Reilly, chairman and CEO of O'Reilly & Associates, which markets WebSite Web Server software, says he hopes the DOJ expands its actions against Microsoft to include its activity with its server products. Last summer, Netscape asked the DOJ to investigate Microsoft for alleged anti-competitive practices in the browser and server markets.

"Obviously the side with more visibility and more impact on the larger group of consumers" is the browser rather than the server, says O'Reilly, who was one of the few Microsoft rivals to speak up against the software giant a year ago.

Even more damaging to Microsoft in the corporate marketplace could be Sun Microsystems' recent lawsuit against Microsoft over Microsoft's Java implementation in Internet Explorer, says Davis. "That could persuade corporate buyers who are considering standardising on Internet Explorer."

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