Panel Conclusion: Microsoft Will Survive - Company Business and Marketing

ENT, Dec 13, 2000 by Keith Ward

LAS VEGAS -- Microsoft is the big dog on the IT porch. But with the emergence of the Internet, handheld devices, the government's anti-trust action, and distributed computing, will this remain the case? These questions about the future of the world's most recognizable and controversial computer software company were put to a panel of experts here at Fall Comdex.

Panelist Dan Kusnetzky, program vice president, system software, at IDC, said Bill Gates has at the very least realized that his company can't stand still and keep relying on Windows and Office sales to stay on top. "I think Microsoft views this as their industry. But Gates is seeing that the PC is no longer the sun with every planet revolving around it. He's not sure what the next big thing is, so he wants to be involved in everything," Kusnetzky said. "It's hard to say where they're going -- they're going everywhere."

Kusnetzky pointed to Microsoft's efforts -- either through in-house development or the funding of other companies -- of wireless and broadband technology, server operating systems, hardware, embedded operating systems, and "investment in companies everywhere." He said Microsoft could be spreading itself too thin, trying to keep its finger in every pot in the industry.

Microsoft's chief direction is its .NET vision of software as a service, with information delivered through the Internet to any device in any form the user wants. The panelists had mixed feelings about the new direction.

Panelist Chuck Toussieng, manager of the internal applications group at Digital Island, said he sat through three .NET demonstrations at the Microsoft pavilion at Comdex, and came no closer to fully understanding what it is or does. He did have good things to say, however, about the underlying .NET technology of XML. "Microsoft is coming out with products and methods that fly over connections. [XML] is pretty powerful at the base level."

Joe Levy, president and CEO of the publishing company CXO Media, sees a Microsoft strategy of gradual implementation of .NET in the enterprise. "I think they're hedging their bets, and seeing if they can get .NET embedded in everything," Levy said. Once embedded, Microsoft will have more leverage in the Internet space.

Kusnetzky said he sees the same kind of creeping .NET presence. "It starts with Exchange 2000, SQL 2000 -- [products] that already have .NET components, so you'll upgrade to [full] .NET in the future," Kusnetzky explained.

As for the anti-trust lawsuit and Judge Thomas Penfield Jackson's order to split the company down the middle, the panel was skeptical of this happening, or the impact it could have on Microsoft if it does.

Levy said, "Gates is convinced they're going to beat the government. The reason Microsoft won't be broken up is because it's not what Bill wants."

Toussieng said the impact of a breakup could be minimal. "Even if Microsoft is broken up, what happened to AT&T [when the government broke it up]? Microsoft has so many divisions...do you think if they're broken up, they won't send each other e-mail about what they're doing?"

Kusnetzky added that depending on what happens with .NET, "The whole court case may be moot by the time [the final resolution] comes down," since the case was based on previous events that have no bearing on Microsoft's new direction. He said it's in the company's best interests to get .NET into the mainstream as soon as possible. For Microsoft, "this is a race -- can they get this on the ground before the judge's decision?"

The panelists and most of the audience -- which was polled on different Microsoft-related issues -- seem to believe that Microsoft's future is solid, if not the spectacular success it was in the '80s and '90s.

Other products may be flashier or have more advanced technology, Levy argued, but better the devil you know. "CIOs don't care about best-of-breed. They want something that works. They're convinced Microsoft will be here five years from now. They don't know if other vendors will be here five years from now."

Kusnetzky agreed. "CIOs are looking to lower costs and making sure things work. Microsoft can very strongly make the case that if you have Windows 2000 on your server, if you look at the whole picture, it will cost you less." The products may not always work the best, he said, but they work well enough and are tightly integrated.

The audience was asked about what recommendations they would give Bill Gates if they could have his ear. Some suggestions included stop trying to mandate hardware design; make Microsoft's products stable; adhere to widely accepted standards rather than violating them; and make upgrading easier and cheaper.