Beware of Redmondians Bearing Gifts

This is the title of a piece by Ephraim Schwartz for his Infoworld column of November 21st. In it Ephraim describes how the recent deal with Novell “for interoperability” had a familiar ring to himself:
– Aug. 6, 1997, at MacWorld – $150M and alliance with Apple
– May 29, 2003, Microsoft and AOL Time Warner agreement includes $750M payment
– Sept. 5, 2003, Microsoft paid Be $23.5 million
– April 2, 2004, that Steve Ballmer took the stage with Sun’s Scott McNealy and paid $1.5B
Now Ephraim asks if anybody can see a pattern here. And then answers that everyone of the agreements had a connection to the Microsoft penchant for making yards out of bounds – they all had antitrust implications. But what could be easily added is that Microsoft increasingly is willingto take the enormous competitive gains from these out of bounds plays, haggle righteously and tightfistedly in the courts, wait for the competitors to gag for cash because of their poisoning tactics, and then cough up the millions required to get a settlement – meanwhile having pocketed billions by protecting their key monopolies.

However, Ephraim suggests that there is more to this. Microsoft is essentially trying to protect its increasingly tightly coupled (everything runs best in Windows because we make it so tightly crosslinked and now no longer have to reveal those internals to anyone else) stack:
“The reality is that for every Windows Server that Microsoft doesn’t sell, it is in danger of losing the entire stack, the services, and the applications on top of it. It’s like losing the keystone in an arch, Rob Enderle, principal analyst at Enderle Group, tells me. … Despite promises of interoperability, Microsoft does not disclose the technical linkages between its desktop products such as Office and the server-side products such as e-mail. You need these disclosures for full interoperability. Although the spin promises interoperability, with Apple, Sun, and Novell, I wonder if it isn’t a brilliant ploy to ensure that IT will get locked in to using Microsoft products. “ I think the light went on.

In effect, Microsoft has taken its best shot at these various competitors and they did or did not survive. So now the Machiavellian ideal is to keep your friends close and your mortal surviving competitors even closer. Know what they are doing intimately so you can react swiftly. Use the kiss and make-up antitrust agreements to establish the close communication/interoperability ties (widest latitude for “frank discussions”) to potential enemies of the Windows stack. And so this leaves Ephraim asking the following question:
“Five or 10 years from now as Microsoft continues this strategy, IT will wake up and discover it is not the heterogeneous shop it thought it was. And I wonder: If that happens, will we ever get the full benefits of innovation and competitive pricing?”

To which I would add that I surmise that Redmond is thinking 2-3 years from now. And now you know why Redmond is already unleashing a series of attacks on Linux/LAMP well beyond the Wormtongue PR drivel of Get the Facts campaign that will get more pronounced in the New Year. Stay tuned for more.

(c)JBSurveyer 2006

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