The 1,200 member Software Publishers Association has turned up the heat on one of its largest members – Microsoft Corp, by issuing a report that calls for the Department of Justice antitrust investigation into Microsoft’s domination of the desktop market to also consider the company’s potential monopolizing of the corporate server. By Dan Jones The […]
The 1,200 member Software Publishers Association has turned up the heat on one of its largest members – Microsoft Corp, by issuing a report that calls for the Department of Justice antitrust investigation into Microsoft’s domination of the desktop market to also consider the company’s potential monopolizing of the corporate server.
By Dan Jones
The report, Competition in the Network Market: The Microsoft Challenge, drew a swift reply from Robert Herbold, Microsoft’s chief operating officer, who wrote to SPA president Ken Wasch, claiming that the report was a 40-page attack on Microsoft’s server business, prepared by our most aggressive competitors, and also implying that the timing of publication was a sop to Sun Microsystems, which has just become a member of the SPA. The author of the report, Lauren Hall, chief technologist at SPA, admitted that the paper was member driven but denied that a report actually naming Microsoft was a significant escalation over the SPA’s previous foray into the murky waters of the anti- trust case – a set of business principles it issued early this year (CI No 3,340), which were clearly drafted with Microsoft in mind but did not name the company. Hall described the principles as general guidelines, while the NT report focused solely on Microsoft’s activities in the server market. It is hard to escape the conclusion that Microsoft is paying the price for not running for a seat on the SPA board this year – a first for Redmond. Hall admitted that it was impossible to say how much influence Microsoft could have wielded if it had still been on the board, but noted that Microsoft is still a member of the SPA government affairs committee that passed the paper last week.
Taking dominance server side
The report charges that Microsoft, which it claims sees NT as a replacement to Windows 95/98, is using its operating system monopoly to establish a similar monopoly in the server market by ensuring that developers who write for Windows will only receive certification if the product also runs on NT. It claims that this has made NT’s dominance a ‘fait accompli.’ Microsoft, it alleges, is using a dominant marketplace position to force the adoption of its technical standards. The report says that the bundling of applications with NT that are built around Microsoft’s own COM component object technology – part of the NT architecture – makes it ‘generally costly and difficult’ to replace these free applications with third-party alternatives. This, combined with the report’s contention that Microsoft products often only work with NT-compliant products, results in users who are locked into an MS-approved environment, according to the Association. Microsoft was also charged with using ‘vaporware’ announcements to ‘nullify competition’ and ‘predatory pricing’ strategies – as no other competitor could afford to offer product suites with such discounts and neither could competitors gain the benefits that Microsoft gets from price incentives schemes linked to the OS, because there is no alternative. Hall said that the purpose of the paper was to highlight areas of concern and start a discussion on competition in the server market – however, the paper and the toughening of the SPA’s position on Microsoft have poured oil on an already heated debate.