Customers Shrug Off Microsoft Ruling

SAN MATEO (04/03/2000) - Though Microsoft Corp. took a financial beating after today's ruling, many of the company's largest customers seemed to shrug off the U.S. government's antitrust findings, which brand Microsoft a monopoly.

For those enterprise customers, it is hardly a new thing that the company may spend much of its time scrimmaging a lawsuit rather than developing new technology.

The only difference now is that Microsoft will sink a lot of effort into a judicial appeals process, which could drag the case out for years.

That process "will no doubt tend to tie up executive management, but Microsoft is a very large and capable company. I don't think the rest of (its) business is going to grind to a halt," said Andrew Weiss, chief technology officer at Merant International, an enterprise application development company in Rockville, Maryland.

Michael Gartenberg, an analyst at Gartner Group Inc., in Stamford, Connecticut, agreed. "The case is a distraction Microsoft would rather not have, they'd much rather concentrate on business," he said.

"But, frankly, they've been embroiled in this for two years and still have managed to ship Windows 2000 and get the Pocket PC ready to go. And they couldn't have done that any faster even if they hadn't been tied up in this case," Gartenberg added.

While not drawing immediate backlash from its enterprise customer base, the company did not fare so well on Wall Street. Microsoft fell US$15.56 1/4 to $90.68 3/4 per share in late trading, as the company appeared poised for harsh penalties in the government's antitrust case.

Shortly after markets closed, U.S. District Judge Thomas Penfield Jackson delivered that ruling, handing out his conclusions of law and ruling that Microsoft violated federal antitrust laws.

The ruling dovetails with Jackson's November findings of fact in which he labeled Microsoft a monopoly. Jackson hit the company specifically for use of its Windows operating system dominance to quash competition in other areas -- particularly the Internet browser market.

Still, many Microsoft customers believe some good can come from the penalties that Microsoft will face or from a potential settlement of the case, which still could come about.

"The pending case has potentially a very significant impact on my business for all the obvious reasons," said Eric Kuzmack, lead analyst at Gannett, in Silver Spring, Maryland, and a member of InfoWorld's Corporate Advisory Board (CAB).

"Obviously, any change in licensing that makes it easier to understand and manage would be welcome," Kuzmack said. "We find that their licensing agreements require a team of PhDs just to figure out how to legally open the shrinkwrap."

Microsoft might also walk away from its tough fight with the government with some better business practices, added Geoff Wells, vice president of Information Technology at the ABC Broadcasting Group, in Burbank, California.

"I could see it having a marked increase in the number of vendors offering add-in products, and also making licensing complicated -- but possibly more competitive," said Wells, who also is an InfoWorld CAB member.

Microsoft Corp., in Redmond, Washington, is at http://www.microsoft.com/.

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