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Microsoft faces its Scopes moment

48 hours that will shape IT

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Europe vs MS Microsoft begins the most important 48 hours in its history on Wednesday in Luxembourg. It's not exaggerating to say that the future shape of enterprise IT hinges on the decision the 13 Judges will make, based on this week's public hearings.

The crucial decision rests on interoperability, and it could lean one of two ways.

A decision to hold Microsoft to its word on server and network interoperability will dramatically enhance the health of the Windows eco-system, with a market of third party add-ons and accelerators based on Windows protocols. Microsoft is at its most productive when it faces vigorous competition, and it's least productive when it has no competition. In addition the company fears the "commodification" of its protocols, superseded by cheap and open internet standards. Creating a flourishing market based on Microsoft protocols, not internet protocols, blesses and enshrines the Microsoft way. By any rational yardstick, all this is good for Microsoft.

But a decision by the judges to throw out the EC decision will affect regulatory interventions for years to come. Microsoft will have proved, by reductio ad absurdum, that it is impossible to effectively police a software monopoly. Microsoft will have won a permanent, government-blessed shield from the rigors of the market. Legislation designed to check an unfair monopoly will have been successfully used to protect the monopolist's business.

This is even better for Microsoft, and you can see why it's fighting so hard to achieve this outcome. It prefers to pay lawyers, and public relations bloggers, rather than give engineers the scope to innovate, because the outcome is so potentially lucrative.

In this light, we need to rethink some assumptions about the case. For years, critics have suggested, Microsoft has regarded its antitrust legal costs as a necessary business expense. Perhaps the critics have had it wrong, and we should jot down the antitrust costs in the capital investment column. For if Microsoft succeeds in nullifying antitrust legislation it'll be able to congratulate itself on one of the best RoIs ever made by a technology company.

The law isn't static, or morally neutral. While this week's arguments are very much about the ethics of regulation, there's an outcome that's the antithesis of whether companies should be "free to innovate." It's really about whether any single company deserves to be protected from competition. Far from taking a moral stand against government meddling, what Microsoft is asking for is special-case pleading: it wants and needs the government's legal umbrella to protect it from competition. If Microsoft prevails in dispatching GPL-based competition in Europe, it will have won the right to a form of corporate welfare in perpetuity.

Let's hear the arguments.

Today, organizations that have invested heavily in Microsoft technology will look in vain for such products as an Active Directory accelerator from Cisco Systems. It doesn't exist. There is no thing as an Hewlett-Packard Exchange Mail accelerator. Network Appliance can't offer a Primary Domain Controller appliance. If you want to speed up mail, directory services or network administration, you need to buy more servers, each with a Windows server license, or buy a faster Windows server.

That's because Microsoft runs a motley collection of unruly and deeply obscure protocols, and it guards them jealously. The issue of building an interoperable product - such as the ones described above - hinges on how well the product works with Windows servers, and these protocols, which have evolved over 20 years in haphazard fashion, dictate how.

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