Microsoft Corp.’s competitors are calling the attention of anti-trust authorities to the company’s new initiative .NET as the software player’s latest strategy to extend its monopoly.
Analysts think that, in spite of the antitrust lawsuit still pending in the U.S. appeals court against Microsoft, the storm of litigation may shift to the .NET initiative as the vendor’s new weapon to outmaneuver its opponents.
“Few years ago, Microsoft was not in the Internet space,” remarked Adam Guy, senior analyst with the Strategis Group, referring to .NET and dismissing the monopoly claims. “Now, it is a pioneer.”
.NET, which is an end-to-end solution that combines development tools, server software and devices, makes both consumers and enterprise users enjoy such services as online calendars, diaries and instant messaging as fee-based activities.
Industry observers see the initiative as providing a platform for all of Microsoft’s products, using XML.
“We will demonstrate that .NET is neither `open’ as Microsoft says it is nor can it be viewed in isolation,” said ProComp, a group that supports Microsoft’s competitors including Oracle and Sun Microsystems, in a report released May 17 titled, “White Paper: Microsoft’s Expanding Monopolies: Casting a Wider .NET.”
“Microsoft’s .NET strategy relies heavily on Windows XP, MSN Messenger, HailStorm, MSN Explorer, Internet Explorer 6.0 and M.S. Passport as building blocks to bring .NET to fruition,” the group contended. “In other words, what a few years ago seemed like wild speculation-Microsoft’s control of the Internet-is now not just possible, but likely.”
ProComp contends Microsoft is extending its dominance in the software environment into the Internet, both wireless and wired.
On whether it is open or closed, Gartner shies away from the answer in a recent study, “The Net in .NET.”
“The open claim comes from Microsoft; the closed claim comes from its competitors,” it says.
Gartner believes that Microsoft has probably created .NET separately from the “classic” Windows as a fallback plan in case the courts rule in favor of its breakup. The initiative seems to contradict itself by being both Web- and PC-based, it said.
The report said Microsoft is probably intentionally vague on that matter. “The unclear packaging strategy for .NET appears to be the less-regulated application entity,” it said.
Gartner, however, sees the initiative as a trend-setter. “In one sense, .NET is a brilliant strategy that enables Microsoft to define the next shift in the software business.”
Gartner says Larry Ellison, Oracles’ chief executive officer, and Scott McNealy, Sun Microsystems’ CEO, originated the phrase “software-as-service” in 1997 “during the age of network computer hype.”
The report said both companies were unable to deliver on their promises, while Microsoft outsmarted them in defining the paradigm shift and the rate at which it will occur. “Gartner believes Microsoft is now providing more vision and influence regarding this shift than any other vendor,” it said.
Strategis Group’s Guy said he does not believe .NET is a monopoly since it is interoperable and accommodates the offerings of other companies. “Since it works with other operating systems and other components like ISPs, Internet-based email, media player products, it is not a monopoly,” he said.
Guy, however, referred to “comfort monopoly,” which implies that Microsoft may be taking advantage of its dominance in the software space with its great customer base, who are used to the company’s popular products now being integrated by .NET.
This, as he explains, does not exclude Microsoft customers from using other products, referring to the dominance of Lotus notebooks as example.
ProComp contends the Seattle-based giant aims to exploit what it calls Microsoft’s historic control of the application programming interface by embedding the .NET framework into its new vision of Internet Explorer.
“With its Windows monopoly squarely in place, with its newly acquired browser monopoly in place and with the threat of Netscape/Java eliminated, Microsoft is poised to `extend the Internet’ with .NET,” said the group.
ProComp said .NET’s danger lies in its power to integrate a “core set of applications and services” into the Windows operating system, Windows XP. It said that Windows XP will be further integrated into Office XP and a “core set of HailStorm” services. The MS Passport, explains the group, will extend them to the Internet. “No other company has the core set of technologies (three monopolies), market reach or distribution capabilities to match what Microsoft is doing in the market.”
Guy said that Microsoft’s dominance may also be attributed to the company’s inventiveness and innovation, adding that it has deep pockets which it has invested in research and development. He said Microsoft spends $4.2 billion in R&D, more than the budgets of AOL, Sun Microsystems and Oracle combined.
Gartner believes that .NET will grow slowly in the market and Microsoft sees it as a long-term strategy.
