WinInfo Daily UPDATE, March 12, 2003


According to sources close to the investigation, the European Union (EU) has found Microsoft guilty of violating EU antitrust laws and is now debating a punishment. Sources close to the deliberations say that two requirements are on the table: forcing Microsoft to share more proprietary software code with competitors and making the company separate its media player from Windows. Whatever the EU decides, the union appears to be considering sanctions against Microsoft that go well beyond the punishment the software giant faced in its US antitrust case.

"We are making progress on the Microsoft case, but we do not yet have any announcements, any statements to make," a spokesperson for EU Competition Commissioner Mario Monti said yesterday, responding to queries about the case. "I am asking you to be a bit more patient and wait until the Commission has come to a conclusion on this case, which probably will take still months."

Before the EU can announce charges and Microsoft's punishment, the union will work to ensure that its case is airtight, both legally and technically. For the Windows Media Player (WMP) charges, this process is probably fairly straightforward. But requiring Microsoft to open up more technical information to competitors is fraught with problems, and the EU must figure out how to specify the technical details in a way that ensures a competitive playing field. The EU is convinced that much of Microsoft's success is a result of illegally tying its desktop products to its Windows Server products. So one of the EU goals is that Windows desktop users who sign on in the morning might be connecting to Linux or other servers on the back end, although the users won't see a difference.

The EU case against Microsoft is the culmination of a 3-year investigation that concentrated largely on server, rather than desktop-related, concerns, as well as charges that the company unfairly harmed competition by bundling WMP with its dominant OS. A final decision in the case isn't expected until June.


According to a CRN report, Microsoft has quietly cancelled plans for a project known internally as OfficeLite, which would have combined a subscription-based version of Microsoft Office with MSN 9. The project would have exposed Office information, such as Microsoft Outlook tasks, calendar, and contacts, through the MSN 9 UI, offering consumers and education customers a low-cost alternative to the company's monolithic suite. Office 2003 will likely ship in early June, but MSN 9 won't be ready until the fall, sources tell me.

"The OfficeLite effort has been shelved for the \[Office 2003\] time frame," an internal Microsoft memo reads. "\[We have learned\] several important things about creating nonperpetual versions of Office \[and\] working with MSN." Another memo suggests that Microsoft made the decision to table OfficeLite because the company decided to more heavily promote the low-cost edition of Office for students and teachers, which the company introduced during the Office XP product life cycle.

An early preview of OfficeLite showed deep integration between Office and MSN. Users could access Outlook contacts through a new My Contacts area in MSN that let them share calendars and group contacts in various graphical ways. Dragging a file into a contact sent the file directly to that person by using new peer-to-peer (P2P) technology based on Windows Messenger. And contacts who were members of a Microsoft SharePoint Web site could view collaborated documents they'd accessed recently. Microsoft says that the work on OfficeLite won't be in vain, and the company intends to repurpose much of the technology for future MSN-based subscription services.


Last weekend, SCO Group, which now owns much of the intellectual property for the UNIX OS, sued IBM for more than $1 billion, charging the company with misappropriating SCO's technologies and building them into Linux. The suit, which has far-reaching ramifications for the open-source software (OSS) solution, charges IBM with "misappropriation of trade secrets, unfair competition, breach of contract, and tortious interference" with SCO's business. SCO says it will revoke IBM's UNIX license to ship IBM AIX if the company doesn't stop its anticompetitive practices within 100 days.

"SCO is in the enviable position of owning the UNIX operating system," said Darl McBride, SCO's president and CEO. "It is clear from our standpoint that we have an extremely compelling case against IBM. SCO has more than 30,000 contracts with UNIX licensees and upholding these contracts is as important today as the day they were signed." The SCO charges against IBM are vast. "IBM is affirmatively taking steps to destroy all value of UNIX by improperly extracting and using the confidential and proprietary information it acquired from UNIX and dumping that information into the open-source community," the suit reads. "IBM's tortious conduct was also intentionally and maliciously designed to destroy plaintiff's business livelihood and all opportunities of plaintiff to derive value from the UNIX software code in the marketplace."

The legal move is interesting. In recent years, Linux has become the darling of the UNIX crowd, with numerous high-profile companies considering the move to relatively low-cost Linux boxes over more expensive proprietary UNIX solutions. Companies that back UNIX, such as Hewlett-Packard (HP), IBM, and Sun Microsystems, have seen their UNIX holdings diminish dramatically as Linux became more popular. What differentiates IBM from other UNIX licensees, however, is that IBM decided to turn most of its engineering and support strength away from UNIX and toward Linux. That move touched off the SCO suit, but you have to wonder whether the move from UNIX to Linux wasn't simply an inevitable, commonsense market decision.

IBM says it's unfazed by SCO's lawsuit. "We've reviewed our contracts, and our UNIX license is irrevocable and perpetual," said Mike Fay, vice president of communications for IBM's systems group, noting that IBM will continue shipping AIX.

TAGS: Windows 8
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