Microsoft has been under intense scrutiny by both the government and the media, and has become the politically correct target of choice for everyone from federal regulators, Congresscritters and States' Attorneys General; to jealous software-industry competitors with an anti-Microsoft axe to grind. All of which is whipping up mainstream media attention that is far from flattering to the computer industry! The most-serious of these attacks is the antitrust trial pitting Microsoft against the combined forces of the US Department of Justice and 19 states' Attorneys General.
Do not be deceived: the primary thrust of the government's case is not the "browser wars" between Microsoft and Netscape, as espoused by the press, nor any rational attempt to protect consumers, for whom computer hardware and software prices have dropped steadily year after year! Rather, this case is a political attack made at the urging of Microsoft's competitors, who are trying through the courts to stifle a company they can't compete with successfully in the marketplace! And, depending on the sanctions levied by the court, our tech-ignorant government risks the possible disassembly of the standard platform on which the PC industry is founded! What they and most people outside of the computer industry have failed (or refuse!) to realize is that the computer industry is based on standards. And if you work in this industry, your job is potentially on the line depending on the outcome of this trial!
As we wait to see what eventual remedies are imposed by the court, every possible solution, from splitting the company down the middle to closing them down all together, has been suggested — most vocally so by those who think they have something to gain by Microsoft's demise! But before we irreparably disassemble Microsoft (and possibly everyone's corporate IT infrastructure in the process!), I think it's important to look at a few facts that might help explain how we got here.
- The overwhelming dominance of MS-DOS and compatibles in the '80s and Windows in the '90s and beyond was and is due to the fact that users have chosen them as the de facto operating system standard for the PC. Because of this standard, the entire small computer hardware and software industry has flourished. In this respect, the MS-DOS/Windows OS dominance has been good for this industry. If you don't believe this, think back to what our industry looked like in the early '80s, when there was no single dominant OS standard to build upon! When the IBM-PC and MS-DOS first appeared, there were numerous incompatible systems competing on the market from companies like Apple, Atari, Tandy and Commodore. Each had its own proprietary OS and file storage schemes, and disks and document files from one system were generally not readable by the other. Because of this, data sharing between platforms was impossible in most cases, and nearly so in all others, so it was rarely done (or even considered!). As the personal computer became increasingly important to business, common sense and conservative market pressure demanded that a common standard emerge. Corporate America voted with their wallets and made DOS/Windows that standard. This standard, "known quantity" operating system has empowered every hardware vendor (from Compaq to the corner "mom and pop" computer store) and every software publisher (from giants like Lotus and Symantec to the army of independent shareware authors hacking away in their family rooms and basements) to develop the diversity of hardware and software we enjoy today. Dethroning the current standard would only lead to a period of chaos until another standard was established by market pressure, because — and have no doubt about this! — a standard OS will always emerge. The industry depends on it and the Corporate IT shops of the world will demand it. Of course, the new standard will probably be condemned by the same techno-challenged industry outsiders who are Windows-bashing today (and industry insiders who weren't lucky enough to own the new standard!) as the "new monopoly." And there is no guarantee that the industry won't self-destruct while the principles are battling it out!
- Microsoft has rightfully earned their current industry position by guessing right in the past and then betting the whole farm on its guesses! Back when DOS was all there was, and programs had to run one-at-a-time, Microsoft had a corporate vision called Windows. Granted, it wasn't an original idea — like many modern computing technologies, the very first GUI (which, by the way, Apple copied the idea for as well!) was the brainchild of the phenomenal Xerox Palo Alto Research Center project (XPARC) — but Bill Gates was convinced that the point-and-click multitasking GUI interface was the right way to compute. And despite the fact that the first three successive versions of Windows (1.0, 2.0 and Windows 386) met with little industry acceptance and even scorn (heck, even I was bad-mouthing it at the time!), Bill risked his entire corporate and personal fortune on the future success of Windows 3.0. While every other software publisher was ignoring the platform, Microsoft slowed development of future versions of MS-DOS, and stopped further development of most of its DOS-based software applications, and instead concentrated the entire company's focus on producing the Windows 3.0 OS and Windows versions of its applications. If Windows 3.0 had been a dog, Microsoft would, at the very least, be a much smaller company today, and Bill Gates (to quote the late Chris Farley) would probably be "living in a van down by the river!" But Windows 3.0 wasn't a dog. In fact, it was accepted by the industry to a far greater extent than even Bill Gates himself had probably imagined. And the Windows software titles Bill bet his future on quickly gained market dominance — which they still enjoy today! — while all of Microsoft's competitors, who scoffed at developing for Windows prior to version 3.0's release, found themselves scrambling to play catch up. The bottom line here is this: Microsoft bet their corporate future on Windows and won big. That's capitalism at its finest. We should be applauding them for their vision, not faulting them for being successful.
- The continuing integration of file handling and connectivity advances into the basic operating system has been a part of the DOS/Windows concept, and indeed OS development in general, during the entire history of this industry. Integrating support for Internet connectivity in Windows 9X is only the latest step in a continuous effort by Microsoft to augment its operating systems to support the file manipulation, storage, and connectivity demands of its users. All you have to do is look back at the development history of Microsoft's operating systems to see this is so:
As you can see, from its earliest days, Microsoft has, at our demand, continued to incorporate into its operating systems support for the latest methods we use to store, manipulate and share files, and connect our computers together. And that integration has been a key factor in the growth of this industry, by making computers easier to set up, use and support.
- The original MS-DOS 1.0 came with only very limited support for floppy disk handling and a few rudimentary utilities such as COPY, FORMAT and DELETE. This was sufficient, since everything had to run on 360KB floppy disks!
- As hard drives started to show up, MS-DOS version 2.X arrived, providing utilities such as FDISK and BACKUP/RESTORE to manipulate and maintain the massive 20MB behemoths!
- MS-DOS version 3.X introduced support for CD-ROM drives with MSCDEX, new utilities such as XCOPY, improvements to many existing tools, and the addition of EMS and XMS memory management support in some OEM versions
- We won't talk about the mistake that was MS-DOS version 4.X!
- MS-DOS version 5.0 incorporated memory management into the base version, including the automated MEMMAKER tool to simplify user setup; provided improved hard disk maintenance utilities, including a vastly improved BACKUP utility and the new Scandisk and Defrag (and companion utilities for the fledgling Windows 3.0!); and introduced new diagnostic tools like MSD and MEM to make my job easier (technical support, for those who missed it elsewhere on this site)!
- The introduction of Windows 3.1 included improved versions of the Windows utilities introduced in MS-DOS 5.0, and new diagnostic tools like DRWATSON. It also included graphical tools like File Manager to ease file manipulation. More importantly, with the use of dial-in Bulletin Board Systems (BBSs) and BBS-based echo-mail services like FidoNet and RelayNet becoming widely popular, Win31 improved its built-in support for modem-based telecommunications and high-speed serial ports. This period also saw the introduction of Win32s and Windows Socket Services (Winsock), the add-ins which were the beginnings of Windows Internet support.
- As networking began to dominate Corporate America, Microsoft introduced new tools in MS-DOS 6.X, and a special version of Windows (Windows for Workgroups v3.11) to make networking easier, which, in addition to support for LAN connectivity, also incorporated into Windows additional protocols and services for connecting and using computers on the Internet that had been separate add-ins to Win31.
- In the early '90s, networking in Corporate America went from being common to mission critical, and Internet usage was still pretty much limited to connections to character-based in-house information systems maintained by universities; government agencies, military units, and their contractors; and a few "bleeding edge" technojunkies. And no one even guessed at the time what the World Wide Web had in store for us! In this atmosphere, Microsoft began working on its Windows 95 OS, which, along with a complete "remodeling" of the desktop interface, also deeply integrated networking and Internet support — as it existed at that time! — into the operating system. The new OS included native clients for the network protocols of the day, including NetBEUI, IPX/SPX and Banyan Vines; a built-in TCP/IP transmission protocol and Windows Socket Services for Internet communications; enhanced dial-up networking support; Unix-like, command-prompt Internet tools such as PING, TRACERT and FTP; and the GUI-based TELNET terminal emulator and Internet Explorer web browser. The advantage to us PC support workers was immediate: what had been a two-to-three hour, mind-numbing task setting up a "fresh from the box" Windows 3.1 for Workgroups PC on an Internet-connected network became a 15-minute point-and-click joy! The reduced support burden was of inestimable value to Corporate IT shops everywhere. And all this integrated networking and Internet functionality was designed into Windows 95 long before the World Wide Web was anything but a curiosity, and certainly long before Netscape Navigator even existed as a commercial product!
Before the argument is raised, it's appropriate to mention that, in the consumer/upgrade market, the "front end" for IE was included in the "Plus!" package (a collection of enhancements and add-ins for "power users" specifically targeted at Pentium systems) that Microsoft sold concurrently with Windows 95. Even though the Win95 disks that shipped with OEM systems included Internet Explorer from day one, the inclusion of the IE front end in the "Plus!" CD-ROM for the consumer market has led some to point to it as "evidence" that IE isn't really part of the OS. The fact is, Microsoft decided to package the enhancements and utilities in "Plus!" separately because they felt that the files included on the operating system disk itself should be limited to those features that would run fast and work well on the 486 systems dominating the consumer market at that time. They were afraid (and rightly so, I think!) of being accused of shipping an operating system that ran too slow if users did a complete install and all the resource-intensive add-ins meant for Pentium systems caused their 4MB 486DX2-66 systems to grind to a halt! So although the IE OS hooks were still in the version of Win95 included on the consumer & upgrade CDs, the front end was not. In retrospect, I'm sure that if Microsoft had known at the time how important the Web was going to become, the IE front end would have been included with the consumer version of the Win95 CD-ROM from day one!
It's also important to remember that all of the enhancements noted above were incorporated into the OS because users demanded them!
Judge Jackson's Finding of Facts. So that's how Windows got to be the way it is. Now lets look at Judge Thomas Jackson's Finding of Facts, and my comments about them (note that the words enclosed in square brackets are my own, inserting relevant statements from elsewhere in the judge's text for clarity):
- ". . . the proof of Microsoft's dominant, persistent market share protected by a substantial barrier to entry, together with Microsoft's failure to rebut that prima facie showing effectively and the additional indicia of monopoly power, have compelled the Court to find as fact that Microsoft enjoys monopoly power in the relevant [PC Operating systems] market ." As was noted above, those outside the industry have never understood that the computer industry is driven by standards, and, for whatever reasons you care to espouse, Windows is the operating system the computer industry has raised up as the standard on the PC platform. As such, the current antitrust rules should not apply here. And, in fact the single, strong OS standard is not what Microsoft's detractors have been railing against, except for a few techno-challenged consumer advocates, Congresscritters with significant Microsoft competitors in their districts (or those worried less about the state of our industry than the need to build some spin with their voters!), and techno-challenged government lawyers bent on breaking up what they perceive as an illegal monopoly. Most people who work in this industry are aware that dismantling the Windows standard would risk destroying the foundation upon which the PC industry is built. Even Microsoft's greatest detractors are not willing to go as far as to say that Microsoft should cease Windows development, or that their overwhelming dominance of the OS market is a bad thing (except maybe a few Novell folks and Linux geeks!). What they object to is a perception that Microsoft has somehow leveraged its OS knowledge to make better Windows applications. Strangely, other than Internet Explorer, the entire subject of Microsoft's dominance of the Windows applications market was not addressed in Judge Jackson's findings, nor was any mention of forcing competition between operating systems by hobbling Windows in some fashion. Rather, this whole argument has been brought forward solely as a "hook" upon which to hang the other accusations!
- "Because Microsoft achieved this result [preventing middleware solutions Navigator and Java from fulfilling their potential to open the market] through exclusionary acts that lacked procompetitive justification, the Court deems Microsoft's conduct the maintenance of monopoly power by anticompetitive means." I question this whole finding for two reasons: first, if Netscape's Navigator was such a middleware threat to Windows, then why has Microsoft maintained a competing browser in Internet Explorer that matches or exceeds Navigator's feature set in almost every respect? Secondly, with the Microsoft/Sun Java trial not resolved at the time this statement was made, I question this court bringing up Java as an example when Microsoft's culpability was still not clear at that time!
- "Microsoft's decision to offer only the bundled - 'integrated' - version of Windows and Internet Explorer derived not from technical necessity or business efficiencies; rather, it was the result of a deliberate and purposeful choice to quell incipient competition before it reached truly minatory proportions." As I noted above, integrating support for the Internet is nothing more or less than the next logical progression along a path that the DOS/Windows OS has followed for years. Internet support belongs in the operating system as surely as networking support does. The boon this provides to my trade alone is gigantic!
One of the statements Judge Jackson made in his Finding of Fact to support this assertion that I found particularly telling was "Internet Explorer is not demonstrably the current 'best of breed' Web browser, nor is it likely to be so at any time in the immediate future." Almost anyone in the industry that has had to use or support both browsers knows that, since v4.01 (which came out well before this trial!), Internet Explorer has by far been the superior browser by almost every objective measurement you wish to choose. So this argument, which was used to discount Microsoft's claim that they were integrating "best of breed" tools into Windows, lacks validity.
It is interesting to note that, in including the subject of application tying in his findings, Judge Jackson openly declared as incorrect a 1998 Appeals Court ruling that overturned an injunction granted to the DOJ to disallow tying of Internet Explorer with Windows 98! This is the judicial equivalent to telling your boss that he's wrong! In retrospect, not a very smart idea!
- A fourth prosecution contention — that Microsoft's free distribution of Internet Explorer, and "sweetheart" deals with AOL and key ISPs to promote it, was anticompetitive — was denied by the Judge, who commented on all the distribution avenues that remained open to Netscape, and stated in his findings "the fact that Netscape was not allowed access to the most direct, efficient ways to cause the greatest number of consumers to use Navigator is legally irrelevant to a final determination of plaintiffs' § 1 claims."
Judge Jackson's Final Ruling. In his final ruling, which basically mirrored the DOJ proposal, Judge Jackson ordered that Microsoft:
- Be broken up into separate Applications and Operating Systems companies (the disposition of other facets of the business such as development tools and languages; and Internet operations like Hotmail, MSN, etc., were not addressed).
- Was banned from penalizing OEMs for bundling competitors' products with its PCs.
- Was required to offer its software based on a price schedule applicable to all OEMs.
- Couldn't restrict OEMs from "modifying the boot sequence, startup folder, internet connection wizard, desktop, preferences, favorites, start page, first screen, or other aspect of a Windows Operating System . . . "
- Would be required to disclose to basically everyone "all APIs, Technical Information and Communications Interfaces that Microsoft employs . . . "
- Would not "take any action that it knows will interfere with or degrade the performance of any non-Microsoft Middleware when interoperating with any Windows Operating System Product . . .".
- Wound not "take or threaten any action" against other companies for how they " use, distribute, promote or support any Microsoft product or service," or how they " develop, use, distribute, promote or support software that runs on non-Microsoft Middleware or a non-Microsoft Operating System or that competes with any Microsoft product or service."
- Couldn't cut any exclusive deals with other companies.
- Couldn't cut a contract that tied licensing of Windows to licensing of other Microsoft software.
- Couldn't bind any middleware products (i.e. like browsers!) to Windows.
- Couldn't cut a deal with other companies to not make or distribute competing middleware products.
- Must continue to offer and support previous Windows versions for three years after the new version comes out.
- Must set up an extensive compliance process.
The Appeals Court Ruling. Needless to say, Microsoft appealed Judge Jackson's ruling, and in their ruling, the Appeals Court made some significant rulings about the findings in the case:
- It upheld Judge Jackson's finding that Microsoft holds a monopoly in the PC operating system market. This is huge, because, although being a monopoly is not in itself illegal, when you are one it changes what you are allowed to do competitively. However, this was expected, because anyone with half a brain knows that Microsoft owns this market! Microsoft just needs to learn that with that market ownership comes the legal obligation to play a little less competitively.
- It also upheld findings that Microsoft's efforts to gain browser market share, and to fracture Java cross-platform portability were in-part anticompetitive actions taken to maintain their OS monopoly.
- However, they threw out Judge Jackson's ruling that Microsoft attempted to monopolize the browser market, claiming that the plaintiffs never proved a separate browser market existed, and never proved that any market entry barriers existed.
- The court didn't throw out the finding that tying of IE to Windows is anticompetitive. Instead, in a long well-reasoned argument that explained why they felt doing so would stifle innovation, and recognizing that there is little applicable case law for software, they stated, "There being no close parallel in prior antitrust cases, simplistic application of per se rules carries a serious risk of harm. Accordingly, we vacate the District Court's finding of a per se tying violation and remand the case." While this keeps this finding alive, it requires that the DOJ now prove logically and factually "by rule of reason" that tying is not only anticompetitive, but provides the consumer no advantage. And further restricting the DOJ, the court said that if the DOJ chose to pursue a tying claim, " . . . plaintiffs must show that Microsoft's conduct unreasonably restrained competition," and added the following restriction: " . . . plaintiffs were required—and had every incentive—to provide both a definition of the browser market and barriers to entry to that market as part of their § 2 attempted monopolization claim; yet failed to do so. Accordingly, on remand of the § 1 tying claim, plaintiffs will be precluded from arguing any theory of harm that depends on a precise definition of browsers or barriers to entry . . ." The court also directed that they must further prove that any harm they can substantiate under these restrictive conditions outweighs the benefits users and third-party developers enjoy from integrating the browser APIs into Windows! Good luck!
The appeals court then went on to address the trial proceedings and subsequent remedies imposed by Judge Jackson. The court threw out Judge Jackson' break up of Microsoft, based on the following issues: "The District court's trial-phase procedures were comfortably within the bounds of its broad discretion to conduct trials as it sees fit. We conclude, however, that the District court's remedies decree must be vacated for three independent reasons: (1) the court failed to hold an evidentiary hearing when there were disputed facts; (2) the court failed to provide adequate reason for its decreed remedies; and (3) this Court has revised the scope of Microsoft's liability and it is impossible to determine to what extent that should affect the remedies provisions."
The remainder of the court's ruling was a detailed comment on judicial misconduct. The court cited four specific percepts in the Code of Conduct for United States Judges that: forbids making public comments on the merits of pending cases; requires the judge to avoid impropriety and the appearance of impropriety; forbids him or her from having ex parte communications (talking to others not part of the case) on the merits of the case; and requires the judge to step down from the case when his or her impartiality might be questioned. In their ruling, the court stated that "All indications are that the District Judge violated each of these ethical percepts by talking about the case with reporters. The violations were deliberate, repeated, egregious and flagrant." The court noted the extreme opposite views of both sides as to how the court should respond to this misconduct: Microsoft basically asked the court to "throw the bum out" along with his ruling, while the DOJ said to do nothing! The court said "We agree with neither position", and again embarked on a lengthy, well-reasoned discussion of its thinking, and summarized "We believe, therefore that the district Judge's interviews with reporters created an appearance that he was not acting impartially, as the Code of Conduct and § 455(a) require."
Finally, the court went on to discuss possible remedies for Judge Jackson's misconduct. They rejected Microsoft's proposal — to throw out the entire case from the point the impropriety first occurred, well before the Finding of Facts, — implying by quoting case law that this decision would be "draconian." They then proceeded to explain their thinking leading to their final remedy: "the appropriate remedy for violations of § 455(a) is disqualification of the District Judge retroactive only to the date he ordered breaking up Microsoft. We therefore will vacate that order in its entirety and will remand this case to a different District Judge, but will not set aside the existing Findings of Fact or Conclusions of Law . . . "
So Where Does This Leave Us? Judge Colleen Kollar-Kotelly, the new District Court judge assigned to the case, has the unenviable task of fashioning a remedy for a case that she hadn't heard direct evidence in. In order to "get smart" on the case, and to comply with the appeals court ruling that an evidentiary hearing is necessary to clear disputed testimony, she had to conduct another extended court session before being able to draft a remedy. None the less, let's review some of the issues and remedies proposed in this case, by the court and others:
- The Internet Explorer Tying Issue. As several columnists have noted, the DLLs in Win9X that IE calls are as easily callable by any other program. Why (other than spite and/or stupidity!) Netscape has consistently chosen to ignore them and load up our hard drives with their own multi-megabyte load of less-compatible DLLs, instead of using the ones already built in by Microsoft, is beyond me! So, if the DOJ decides to pursue the tying issue and the court rules in their favor (not likely given the narrow scope of argument the appeals court is allowing them!), here's my recommended remedy:
- The DLLs that are the heart of Internet Explorer need to stay! However, Microsoft should be compelled to fully document them, so every software developer can take full advantage of them — a Microsoft Press book on writing code to call the browser engine APIs would be a nice touch!.
- Microsoft should be allowed to insist that anyone (including Netscape!) that wants to write Windows software to access the Web must use the browser engine API if they want to display the "Made for Windows
" compatibility logo on their product. Microsoft should not be held liable for performance or compatibility issues if software developers don't toe the line! Sun recently won its case concerning Java compatibility, requiring similar compliance from Microsoft as regards Java. Microsoft should be given the same authority over Windows.
- The IE "front end" interface, including Outlook Express, should continue to be a free OS component, and continue to provide basic compatibility with the current flavor of HTML and its various mainstream features. However, Microsoft should write the built-in browser engine API and integrate it into Windows in such a manner that switching to the user's choice of browser front ends is easy and painless (maybe a "Browsers" applet in the Control Panel!). Further, the ruling should ensure that any browser front end that uses the API properly has equivalent performance (no undocumented API calls allowed!).
The Big Question: How to Break Up (or Not Break Up!) Microsoft. Since even before the trial began, there have been many proposals made that include beaking up the company as a remedy. And between the DOJ, the FTC, Congressional frenzy whipped up by Congresscritters who have discovered that high tech makes good press, and the legions of lawyers and lobbyists hired by Microsoft's competitors clamoring for the software giant's demise, I'm sure some changes to Microsoft's corporate structure may have to be made eventually. Let's examine several of the most popular proposals:
- Make Microsoft sell off its Applications Division. This was a remedy mentioned early on by some of Microsoft's applications competitors, who felt Microsoft's applications and OS divisions were setting up undocumented links between the two to make them behave better, faster, etc. While this remedy would appear to make sense on the surface, this "solution" would only serve to further limit competition in the applications marketplace. Why do I say that? Let's assume for the moment that some other company would be willing to buy Microsoft's Application Division, and could actually come up with that much cash! If so, most of the large software companies that might possibly have enough capital to do so already publish one of the few office application suites that compete with Microsoft Office! With marketing pressures being what they are today, it's not likely any company could afford to support two competing office application suites, so we can assume that the purchaser's existing software suite would be doomed to extinction soon after they purchased the MS Office cash cow! So this remedy would be more anti-competitive than the status quo!
- Force Microsoft to place future versions of Windows into the public domain, make it an international standard, and run it by international committee. Right! This one would be sure to cause the death of Windows as the standard PC OS (which is most likely the intent of its framers!). Devotees of this idea point to Linux and imagine the remarkable OS that Windows would become with many bright minds working in concert to improve it! But I also point to Linux and have to ask: if we open up Windows' source code for everyone to hack, which of the many hacks sure to result will be the real "standard" version of Windows that Corporate America will be able to depend upon? The answer is usually "that's what the committee is for!" Sure! Not only can we expect the committee to worry each minor decision to death, but we have no guarantee that decisions spinning from an international committee will necessarily have the best interests of Corporate America at heart. Arguments based on conflicting national agendas are sure to rule the day, dragging out even the most minor decisions for months! Just look at how many years it took to get the V.90 modem standard out the door! And Look how long it takes new Linux versions to get out the door, even with just one person having a final say on what goes in it! Those concerned about the blinding pace of computer advancement today would be able to breathe easy under this plan: we'd be lucky if we got a major version upgrade out of the committee once every four or five years or so! So much for innovation!
- Split Microsoft into two companies: Applications in one company, and Operating Systems in the other. This is the "remedy" the DOJ proposed and Judge Jackson ordered (and which the Appeals Court has since vacated!). And even though I don't feel this will solve anything in the long run — other than turn Mirosoft into the two biggest software companies in the world! — this is the scenario I support as the least damaging of evils (short of leaving things the way they are!). In addition to getting all the politicians, bureaucrats, and competitors off Microsoft's back, it has several side benefits that might prove profitable to Microsoft shareholders:
- First, it would end once and for all the cries of unfair collaboration between the OS and Apps folks: neither company will know what the other is doing, and the Apps folks will be "eating at the same API trough" as their competitors.
- Secondly, assuming Microsoft retains the right to integrate features into Windows, a split would free the Operating Systems company to integrate anything they want to into the OS, and change any features they deem will improve its value to the customer, even if the change isn't in the best interest of some application company to do so (including "Microsoft Applications," or whatever they end up being called).
- Finally, it will give the Applications company the freedom to support any OS platform, not just Microsoft's operating systems. While Microsoft has always published a limited software catalog for the Apple Macintosh platform, thay have held off in the past from porting Office to other operating systems, for fear of supporting them to the detriment of Windows. A separate company, looking to maximize its profits, would probably be less restrained! Once the OS people aren't there to politick against it in board meetings, we could likely see applications ported to other OSs: how about Microsoft Office for Linux? Or FrontPage for Solaris? Or even IE for OS/2?! (Sorry! Couldn't resist!) Besides making shareholders a piss-pot of money, porting Office would tend to foster competition in the OS market: making the industry-leading office productivity software suite available on other platforms would make the OSs more attractive, viable alternatives to Windows on the desktop!
Sanctions. No matter what decision is made as to Microsoft's future corporate structure, it is inevitable that sanctions limiting Microsoft's marketing and licensing behavior will be imposed. The interim sanctions imposed by Judge Jackson, and noted in detail above, are likely indicative of the kinds of limitations we can expect to see imposed. However, I think it is important that the court ensure, when putting sanctions in place, that they are imposed against the company's behavior, not its software, and that the resulting company or companies are allowed to continue innovating new concepts and integrating support for mainstream functions into Windows.
Conclusion. The outcome of all this government and media attention on the future of Microsoft is anyone's guess at this point. Will Microsoft be forced to split itself up into two or more companies? And if not, what will the "new improved" Microsoft actually look like after DOJ et al get through with them? It's too early to tell yet, and if the IBM antitrust case is any example, the lawsuits and subsequent appeals could go on for years! But even without outside intervention, any future iteration of Microsoft is sure to be different than today's Microsoft, as the company scrambles to make itself less vulnerable to outside attacks. My sincere hope is that, in forcing massive change on Microsoft, the perpetrators of the company's current troubles don't doom the computer industry in the process!