New York, Nov. 4: The ruling on Friday by a federal judge, rejecting strong sanctions against Microsoft, means it will not have to change its ways much despite its antitrust violations.
But while Microsoft has squelched the competitive challenge posed by internet browsing software, the “internet threat” that so worried it in the 1990s is still alive and well, though in a very different form.
The rise of the internet has affected the technology industry in three main ways, each of which tends to discourage monopoly power. First, no single company controls the internet's crucial technical standards. Second, it is a low-cost technology and though essentially a communications technology, it has helped accelerate the advance of low-cost economics in computing generally. Third, as a decentralised technology, the internet holds the promise of dispersing market power.
Today’s embodiment of the internet threat to Microsoft is Linux, an increasingly popular operating system and a potential rival to Microsoft’s Windows. The business problem of competing against Linux is trickier for Microsoft than was thwarting the early internet challenge from browsing software and Netscape Communications.
This time the competitive weapons in the Microsoft arsenal will be fewer because a federal appeals court has ruled that the bullying of industry partners and rivals to protect its monopoly was illegal. And Linux, an operating system written and updated by a worldwide community of volunteer programmers and ostensibly free, is a more elusive target. It already has broad industry support, and no single company stands behind it.
Several companies package and sell their own version of Linux along with technical support, on a par with or less than the cost of Windows software, including Red Hat, SuSe, Ximian and Lindows. But IBM has also embraced Linux, giving the alternative operating system much greater momentum and credibility. And Microsoft executives regard IBM as their principal rival these days.