Menu
AT LARGE: Friends like these

AT LARGE: Friends like these

At last, it's over. The prosecutors have prosecuted, the defendants have defended, and, finally, the judge has judged. It's great to have that closure.

Yeah, right. As Gates said at the press conference, this is only the beginning.

And well it should be. I've pointed out before that structural remedies against Microsoft are unsupported by the facts of the case. It's just, more or less, the done thing in American antitrust cases. Standard Oil broke up, AT&T broke up. IBM had restrictions placed on its conduct that left it with little choice but to break up. Judge Jackson has ordered Microsoft "divested" not so much because the facts demand it, but out of respect for traditions. Failing to order a breakup would have been like eating tofu at Thanksgiving.

Microsoft needn't fear the structural remedies. They don't need to be implemented for a considerable time, and by then the appeal process will be well under way. Chances are reasonable that there never will be a court-ordered break-up of the company.

There's an interesting side-note in Microsoft's last-ditch attempts to persuade Jackson not to order a split. It solicited letters of support from high-profile customers to paint divestiture as damaging not only to the company, but to consumers. Jackson reluctantly allowed several of these into the record (refusal would have strengthened the case for appeal), one of which was from Jeffrey Katzenberg, a principal of Dreamworks SKG. Katzenberg, whose friends call him "Katz", argued that separating the applications and operating system components of Microsoft would lead to the company's software becoming, over time, less compatible and interoperable. All-Microsoft shops like Dreamworks rely on the close integration of this software.

If ever there was an argument for breaking the company up, there it is. This letter effectively says Microsoft's big customers perceive that the company exploits the close integration of its operating systems and applications to lock competitors out. Because application developers that do not happen to be Microsoft don't know as much about the operating system as they should, their products suffer. Ergo, their customers suffer. Thanks Katz.

Which leads me to the conduct remedies. Microsoft has been ordered, among other things, to make its APIs available to all developers. This would mean that non-Microsoft developers would know as much about developing for Windows as Microsoft would. Gates has been even more vigorous in resistance to this than he was about breaking the company up. But let's face it: the only reason Microsoft doesn't tell everyone its APIs is to give an unfair advantage to Microsoft applications.

The only reason that an independent Microsoft Office company would create less-compatible Windows applications is if that company has to operate in the dark, the way its competitors currently do. With the APIs available to all, it won't have to. Katzenberg's argument becomes moot.

Of course, once the APIs are open, the apps division may find that it is less efficient to compete as part of the Redmond monolith. It may decide, like IBM, to split in order to survive.

One other point about the Katzenberg letter. As I said, Katz is one of the principals of Dreamworks SKG. The other two are Steven Spielberg and David Geffen. There is, however, a silent partner, who would have provided a vowel and made the name pronounceable, if unpleasant. The silent A in "SKAG" is none other than Paul Allen, billionaire venture capitalist, cable baron, mean guitarist, and, oh yes, co-founder of Microsoft. While less involved in the daily operations of Dreamworks, he brought a large amount of startup capital, more than, for instance, Geffen did. He also brought connections that, no doubt, mean the company gets its software on the cheap. Any illusions that Katzenberg's letter came from an independent customer should now be dispelled.

I wonder about Paul Allen. In Microsoft's early days, he was seen as the mature, smart partner who knew about software, while Gates was the driven geek and public face of the company. When Allen left due to illness, Gates seems to have absorbed his colleague's reputation for intelligence and maturity. The history of Microsoft is now a history of Bill Gates, and Allen has faded, more or less, to the background.

It's similar to the situation at Apple, where Steve Jobs is synonymous with the company, and was even when he didn't work there. Steve Wozniak, the co-founder who actually knew how to build a computer, is a footnote in the company's history. Like Allen, he's just not as colourful as his bespectacled counterpart.

And what do Woz and Allen have in common? Beards. Put hair on your face in this industry, and they'll forget you. It's some kind of conspiracy.

Matthew JC. Powell is proud of his tonsor. Contact him on mjcpowell@ozemail.com.au


Follow Us

Join the newsletter!

Error: Please check your email address.
Show Comments