Microsoft 'Principles' Raise Windows Live Fairness Issues - InformationWeek

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Microsoft 'Principles' Raise Windows Live Fairness Issues

Experts question whether Microsoft will make it easy for Windows users to switch to competitors' Web services.

Microsoft Corp.'s recent pledge to compete fairly while trying to make money with its Windows monopoly has raised questions as to how the company will operate in the all-important battle for the Web.

Two thirds of the 12, non-binding "Windows Principles" Microsoft General Counsel Brad Smith unveiled Wednesday were requirements stemming from an antitrust lawsuit filed by the Justice Department and settled in 2001. Of the remaining four, the tenet on Internet services drew lots of interest Thursday from experts looking for an inkling on how Microsoft plans to compete with Windows Live, its initiative to make all its products available as Web services.

Microsoft promised to design Windows Live services separate from Windows. "Customers will be free to choose Windows with or without Windows Live," the company's seventh principle said.

The two-sentenced tenet, however, didn't necessarily mean that Microsoft wouldn't ship future versions of Windows with Live services included with the operating system.

"The devil is in the details," Matt Rosoff, analyst for Directions on Microsoft, said. Microsoft, for example, could continue to leverage its home-field advantage by including links to its Live services.

"It just depends on how easy they make it to change the default (to a rival's services)," Rosoff said.

No one expects Microsoft to abandon the desktop. In fact, Joe Wilcox, analyst for Jupiter Research, believes the company will try to make Windows more relevant as a launching pad for the Web. Rival Google, on the other hand, would prefer to have consumers focus on the browser.

"The question is where the battle eventually will be fought," Wilcox said.

Microsoft is sure to offer Live services that will connect to applications on the desktop. "The bigger bang will come from the desktop," Wilcox said.

For example, Live services could link to Office applications or Windows Media Player. Competitors would be able to take advantage of the same desktop services, but that doesn't mean Microsoft won't have a head start.

"Microsoft always has the home advantage in that it knows what it's going to do (on Windows) before anyone else," Wilcox said.

In releasing its guiding principles, Microsoft was giving PC manufacturers a heads up that they will have lots of flexibility in configuring their products for customers, Michael Silver, analyst for Gartner Inc., said.

The federal antitrust ruling made it mandatory that Microsoft not use Windows pricing to get its products on the desktop over competitors.

"They can embed Windows Live services as long as you don't have to use them," Silver said.

Chris Swenson, software analyst for the NPD Group Inc., sees little that's new in Microsoft's promises, but believes it's good for the technology industry to have the company offer at least a guide.

"It will be a little bit easier to hold them accountable," Swenson said. "Competitors may have a better chance to compete against Microsoft when it enters other markets."

So while the new set of principles haven't provided much in the way of insight into Microsoft's Web strategy, it's obvious that key motivators were the federal antitrust ruling that the company operates under today, and the ongoing troubles the software maker has with the European Commission.

The latter government agency last week fined Microsoft $357 million for allegedly dragging its feet in complying with a 2004 decision that required the company to provide technical documentation on protocols used by applications to communicate with Windows. Microsoft is appealing.

With those legal issues still alive, it's safe to bet that government officials on both sides of the Atlantic won't be satisfied with promises from Microsoft.

"If they try to use Windows to gain market share with Windows Live, then they're going to have to be careful," Silver said.

"Everyone is going to be watching them," Rosoff said.

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