BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Saturday, 3 November, 2001, 09:00 GMT
Microsoft continues aggressive ways
Microsoft chief executive Steve Ballmer (left) and chief software executive Bill Gates
Microsoft has faced a three year anti-trust investigation
Kevin Anderson

Microsoft has always been known as a fierce, tenacious and single-minded competitor. No one ever disputed that.

The only dispute in the three-year-long anti-trust battle was whether the company crossed the line from fierce competitor to illegal monopoly.

If anything Microsoft may feel that its position and approach were vindicated

Dan Kusnetzky, IT consultant

The company has remained an aggressive competitor over the course of the trial. Industry analysts do not expect the software giant to change its ways, even in light of restrictions on its behaviour outlined in a proposed settlement announced on Friday.

Building the empire

In the three years that the government has pursued its anti-trust case against Microsoft, the software giant actually expanded its share of the desktop operating system market, said Dan Kusnetzky, vice president system software for IT consultancy IDC.

Bill Gates at the launch of the Windows XP operating system in New York earlier this month
Microsoft was criticised for its aggressive marketing of the new Windows XP system

In 1999, Microsoft had 88% of the desktop operating market. By the next year, they had increased this to 92%. In comparison, their next closest competitor held a 4.1% market share in 2000.

"This was during a time when there was all this uncertainty," Mr Kusnetzky said.

He has great respect for the company. "It's an amazing machine. I admire these people, who were far sighted enough and bold enough to do what they have done," he said.

Microsoft is not afraid of change. It will cannibalise a weak product to launch a stronger product.

And he said that it turns competitors' mistakes to its own advantage, adding, "It's one of their biggest areas of genius".

A Microsoft world?

Mr Kusnetzky says Microsoft has not changed either its tactics or its overall strategy. With the settlement, "if anything Microsoft may feel that its position and approach were vindicated," he said.

That game has a name: Microsoft wins; the other guy loses

Dan Kusnetzky, IT consultant

Their strategy is to own the file formats, programming interfaces, communications architecture, development tools and tools that connect applications to applications and applications to the operating system.

"Once they get an ownership position of those things, they make all the other vendors chase them," he said.

"That game has a name: Microsoft wins; the other guy loses."

And with the proposed settlement, "Microsoft may not just have won the battle, it may have won the war," he said.

With Windows XP and its Internet services strategy called .Net, he said that Microsoft is now out to extend its dominance to the Internet.

Winning the war for Microsoft would mean having to use a piece of the company's software in almost anything one did with respect to using a computer.

But the war is far from over.

The computer industry is undergoing huge changes and soon a significant amount of computing may happen on devices that we do not traditionally think of as computers, computing appliances and other devices with no screens or keyboards that are controlled using voice commands.

And Microsoft enjoys no special advantage in these markets.

Increased scrutiny

Microsoft has changed its behaviour a little over the course of the trial, says Rob Enderle, desktop operating systems analyst for the IT consultancy Giga Information Group.

"It's friendlier with hardware OEMs (computer makers). It was much more dictatorial then," he said. But as a competitor, "it is just as aggressive as it has ever been".

And it continues to bundle more features and applications into the operating system pointing to the tight integration of .Net internet services with Windows XP.

"It is attempting to expand into the next big marketplace," he said.

Windows XP frequently suggests that users sign up for Microsoft .Net services as they install the new operating system.

With such aggressive marketing, Mr Enderle doesn't know how Microsoft will avoid future legal hassles over perceived anti-competitive behaviour.

"Whether it is the EU or the US Department of Justice, they are going to have additional issues with anti-competitive behaviour. Once they are branded a monopoly, they will face greater scrutiny," he said.

Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories