Microsoft Still Swallows the Competition -- for Now

You can buy your way out of any situation. Or so Microsoft Corp. has demonstrated yet again.

Over the years, the software giant has toyed with various opponents -- Digital Research, WordPerfect, Corel, Caldera. In a surprising number of these cases, it ended up disguised as a “white knight,” eliminating its competition through legal agreements and strategic injections of cash -- “go away” money, in effect. And the competing products are what do the “going.”

Now there’s a settlement between Sun Microsystems and Microsoft -- a “cooperating agreement,” Sun called it. Microsoft pays Sun, which has been struggling, about $2 billion. Microsoft is clear about its worldview: one world, one operating system, one vendor.

For years, Sun claimed that it believed in alternative operating systems, such as Linux, alongside its own products. That’s why the settlement with Microsoft leaves such a confusing impression. Like those other beneficiaries of Microsoft’s largess before it, Sun has stepped onto the slippery slope to oblivion, a company with a temporarily fat wallet but no coherent vision.

In the old days, Sun frequently, correctly and emphatically labeled Microsoft an unrepentant monopolist. The softened rhetoric of recent months should have warned us. In buying Sun’s silence, Microsoft has effectively disposed of another competitor.

In Europe and elsewhere, however, things are not going so smoothly for Microsoft. Local and regional governments are ripping up expensive Microsoft licenses and mandating free and open-source software -- Linux, BSD, Open Office and so on.

The European Commission has fined Microsoft $613 million for monopolizing the media-player market by bundling its own media player with Windows. Remember the browser wars of the late 20th century? Because of Microsoft’s anti-competitive behavior back then, it’s taken years for competing browsers -- such as lightning-fast Opera and the powerful Mozilla -- to gain a foothold.

The successful European digital media-player case against Microsoft could benefit Real Networks. Real has brought a similar suit here in the U.S.

When Microsoft was formed, young Bill Gates explained to the first group of employees that everything would go well if it was understood that he was in charge. When he unveiled his vision of “a computer on every desk and in every home,” it wasn’t clear that he also meant “running only our software.”

Like all mature empires, Microsoft knows the end is in sight. The real enemy -- Linux, BSD and the open-source philosophy -- is eating away at its future revenues. Alternative office software and browsers have achieved parity with Microsoft Office and almost equal ease of installation. The tipping point approaches.

But for the moment, these products are really the expressions of a movement and a philosophy -- not corporations with enough cash to take on Microsoft. Real Networks may have won in Europe, but you can be sure that someone at Microsoft is muttering: “Let’s get Real.”