WinInfo Short Takes: Week of December 23

An often irreverent look at some of the week's other news...

EU Wraps Up Microsoft Probe: Happy Holidays or April Fools?
The European Union (EU) said this week that it would wrap up its 3-year-old antitrust investigation of Microsoft early in 2003. The EU could give Microsoft a slightly late holiday present and let it off easy or pull out the rug from under the company and impose strict sanctions and fines. Mario Monti, the EU's commissioner for competition, said yesterday that he "cannot exclude seeking different remedies in certain areas" than the United States sought in its historic antitrust case against Microsoft. The EU case differs from the US case somewhat because the EU case concentrates on the multimedia and server markets rather than the desktop. If the EU finds Microsoft guilty of antitrust violations, it could fine the company up to 10 percent of its annual worldwide sales.

What the Media Center PC Should Have Been?
A company called Yuclid has released a $700 PC that's designed for use as a home entertainment center. If you think that sounds a bit like a Media Center PC, you're right. The Yuclid Digital Media Console offers users Windows XP Home Edition, a rewriteable DVD drive, a wireless keyboard and mouse, digital video recording (DVR) capabilities, access to XP's digital-media and gaming features, and a simple consumer electronics-type UI. But at $700, the Yuclid Digital Media Console is quite a bit less expensive than the least-expensive XP Media Center PC, especially one with a recordable DVD drive.

What the Media Center PC Should Have Been? (Part Two)
Meanwhile, Japanese electronics giants Matsushita Electronic Industrial and Sony are working together on a Linux-based OS for consumer electronics hardware products. The Linux version will need to boot quickly and offer the type of performance consumers expect, the companies say. It will also need integrated DVR functionality. Sound familiar? Yep, that's right: The companies are obviously designing the new OS to compete with XP Media Center Edition--just like the Yuclid device mentioned above.

A Low-Cost Microsoft Office? Say It Isn't So!
Microsoft is reportedly considering a lower-priced version of its Office suite that can better compete with Sun Microsystems' StarOffice,, and other up-and-coming Office alternatives. To respond to these threats, David Jaffe, lead product manager for Office, says that in mid-2003 the company might offer a stripped-down version of Office 11 that contains fewer applications and features. Of course, Microsoft already sells a stripped-down Office XP version for educators and students that retails for only $125 and delivers the most important core Office applications. Regular consumers aren't supposed to purchase this version, but retail stores such as Best Buy often don't check buyer's qualifications. Maybe this unofficial el-cheapo Office version will become a bit more official with the next revision.

AOL Time Warner Gets Controversial IM Patent
The United States Patent and Trademark Office granted AOL Time Warner a crucial patent for Instant Messaging (IM), giving the media giant a potentially deadly weapon to wield against competitors such as Microsoft and Yahoo!. The broadly worded patent essentially gives AOL rights as the creator of IM (ICQ, which is now a part of AOL, invented IM) and to basic IM tasks such as the way users can see other available users online and communicate with them.

InterTrust Patent Threatens to Dethrone Microsoft
And speaking of patents that might force dramatic changes in the technology sector, consider this relatively under-reported patent battle involving Microsoft and a small company called InterTrust. InterTrust might not be small forever: Philips Electronics and Sony (which together own the CD patent, not coincidentally) have offered to buy InterTrust for more than $450 million in cash. Why would they pay such a handsome sum for tiny InterTrust? Well, InterTrust owns 26 patents related to Digital Rights Management (DRM) and has another 85 related patents pending. But the company's biggest asset is a lawsuit against Microsoft, which could be the most damaging patent lawsuit in history if InterTrust wins. According to the lawsuit, Microsoft infringes on InterTrust's patents every time Microsoft ships Windows XP, Office XP or any Office XP application, Windows Media Player (WMP), Xbox, virtually every piece of Microsoft server software, Windows Powered Smartphone, Pocket PC, many consumer electronics devices, and almost every product or service that's related in any way to Microsoft .NET--or, as InterTrust explains it, about 85 percent of the products Microsoft sells. InterTrust is seeking massive damages, which a federal court could triple if it finds that Microsoft willfully violated InterTrust's patents. When you consider that Philips and Sony earn 3 cents for every CD that's manufactured plus 3 percent of the price of every CD player that's sold--almost $1 billion annually--thanks to their CD-related patents, you can see why the companies are interested in InterTrust. As Philips and Sony noted in a November press release describing their planned purchase, one goal is to "make InterTrust's important DRM patents more widely available on a fair and reasonable basis." Now, that statement sounds like a successful formula for a software-subscription service, only this time Microsoft will be sending out the monthly checks. Oh, the irony.
Oracle, Palm Swing to Profits
As we all look for signs of economic recovery, two industry heavyweights have reported relatively favorable quarterly earnings. Oracle says sales declined less than expected in its second quarter, and the company is now predicting a "modest recovery" in tech spending. Oracle reported a net income of $535 million on revenues of $2.31 billion for the quarter ending November 30, a decline of 3 percent from the same quarter a year ago. Meanwhile, portable device maker Palm announced a profit for its most recent quarter: The company posted earnings of $3.5 million on revenues of $265 million, compared with a $25 million loss in the same quarter last year. Palm shipped 1.4 million devices in the quarter, although sales are down 8.8 percent compared with last year.

Opera 7 Updated to Beta 2 as Mozilla Moves to 1.3 Alpha
Two alternative browsers released key upgrades this week. Opera Software upgraded Opera 7 to beta 2 status. The new release includes an interesting fast-forward tool for easily scrolling through a multipage Web site, a new password manager, simpler skin-based customization, an improved email client, and other features. Meanwhile, released the first alpha version of Mozilla 1.3, which includes basic junk-mail filtering, a new Message Views feature for email and newsgroups, bookmarks quick searching, native support for the back and forward buttons on Microsoft IntelliMouse products, and other interesting features. Mozilla 1.3 isn't yet ready for prime time, but if you like to stay on the cutting edge, check the browser out.

Did Microsoft "Bury" .NET My Services? Or Is Someone Just Not Paying Attention?
You might recall Monday's WinInfo Daily UPDATE story about Microsoft's plans for 2003. The article was based on a press release the company issued, and as I noted, the press release wasn't complete: Obviously, Microsoft is working on far more products and services for 2003 than the press release reported, including its DRM server and Small Business Server 2003. But at least two news agencies inexplicably used this information as damning evidence that Microsoft is dropping .NET My Services (formerly code-named HailStorm) because the service wasn't mentioned on the company's list of planned product and services for 2003. As you might recall, Microsoft originally envisioned .NET My Services as a consumer-oriented set of Microsoft .NET services, including Inbox and calendaring, and after the company finished the consumer version, a business-oriented version would follow. However, when Microsoft cancelled .NET My Services, the company said that it would roll the consumer services into MSN (which happened with MSN 8, although work continues, naturally, toward MSN 9, another 2003 release not mentioned in the list), and the business services would be available as a server product that enterprises could roll out inhouse. And yes, Microsoft will release this product in 2003. So why are people reporting that Microsoft just recently cancelled .NET My Services? I have no idea. But you can read about the cancellation in a .NET UPDATE article I wrote back in April.

Windows 95 and OS/2 Together Again ... in Death
Isn't it somewhat ironic that Microsoft is putting Windows 95, the Microsoft OS that put the final nail in IBM's OS/2 coffin, out to pasture just as IBM kills off OS/2 for good? The two old adversaries heading off into the sunset together is somewhat poetic. Starting December 31, Win95 will officially hit end-of-life status, and Microsoft will no longer support it. Meanwhile, IBM has supported OS/2 quite nicely over the years, although the product stopped selling in any appreciable way right around the time Win95 rolled out. Today, a lot of people are breathlessly describing the way Microsoft killed off OS/2 with its 32-bit Windows line, but I think the more realistic story about OS/2's defeat comes from the autobiography of ex-IBM CEO Louis Gerstner, titled "Who Says Elephants Can't Dance" (a surprisingly excellent read, by the way; he wrote it without a ghost writer). In the book, Gerstner devotes less than two pages (out of 350) to OS/2. "But the exit strategy was already a foregone conclusion," Gerstner writes of the OS/2 Warp release in 1994. "The war was already over and was a resounding defeat--90 percent market share for Windows to OS/2's 5 percent to 6 percent." By the time IBM released Warp, Gerstner had already agreed to a plan that would phase out OS/2 over time, costing the company millions of dollars but giving its customers time to migrate to other platforms--in other words, a classy exit strategy from the planet's premier service-oriented tech company. As for that 5 to 6 percent market-share figure, does anyone else find it interesting that that figure is about double Apple Computer's market share right now?

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