Despite its size and influence, Microsoft says it reacts rapidly to changes in competition, user demands, computing models and legal pressure. In the last year that claim has been put to the test, following a US court finding that the company had been guilty of monopolistic practices. It now faces the possibility of a breakup  although this scenario is looking less likely as the appeals process progresses and it has had to rebuild relationships with software and hardware partners. Microsoft has also started to develop Web-based services, where it faces a number of rivals.
For IT buyers, the indications are that Microsoft systems are opening up in some respects, by supporting more open standards, but there are signs that products are designed to offer a number of advantages to companies that use complete Microsoft packages, rather than mixing them with other applications.
Microsoft is appealing against the break-up order and a new optimism surrounds the firm, since many lawyers believe the order will be overturned. This, together with plans for new operating systems and the rollout of its dot-Net software-as-a-service strategy, and HailStorm messaging Web services, could result in a Microsoft that is as powerful and confident as ever.
Divided opinion
Dot-Net and HailStorm should give some indication of how far Microsoft has come in opening itself up to interoperability with rivals, and meeting the demands of users. In judging Microsoft's progress, however, its friends and foes are sharply divided.
Ed Black, president of Computer & Communications Industry Association (CCIA), with members including Sun Microsystems and America Online, said the HailStorm strategy could result in another antitrust case. 'Microsoft is going to leverage this and bundle things together. It's pretty blatant on its face,' Black said. 'This behaviour is a continuation of Microsoft's anticompetitive strategy.'
But some loyal Microsoft customers said the company is changing for the better and giving them what they need. For a long time Massimo Villinger, chief technology officer at Lockheed Martin Information Systems, pushed Microsoft to allow its software to interoperate with other platforms. But his pleas fell largely on deaf ears. Lockheed Martin runs Windows on more than 100,000 desktops and many of its servers and is one of Microsoft's oldest and most loyal corporate customers. It was one of the first firms to roll out Microsoft Exchange more than five years ago, and was an early adopter of the Windows 2000 platform, although its Web site runs Netscape-Enterprise on Solaris. As such, Villinger has the ear of the decision-makers at Microsoft, and it is possible they are listening. Changes over the past year have been enthusiastically welcomed by Villinger and other customers.
Villinger said, "As a multiplatform organisation, interoperability is critical for us, so it's gratifying to hear of Microsoft's readiness to abide by industry standards, embrace XML [eXtensible Markup Language], Soap [Simple Object Access Protocol] and participate in the standards bodies."
A number of Microsoft's partners say it is being forced to change the way it operates. They argue that customer demand and market forces are making the company embrace more open standards and access. Pat Gelsinger, chief technical officer of Intel's Architecture Group, said, "Customers need, and are demanding, cross-platform interoperability, and Microsoft is looking to build some horizontal standards based on Web-based standards."
Microsoft could lose custom if it does not adapt. Villinger said he will be "most disappointed" if Microsoft breaks its interoperability promises, as it did with Java. Lockheed would "not tolerate" such behaviour, as it would be "very negative for us and the entire industry to have different versions of XML", Villinger said.
But the CCIA's Black is sceptical about Microsoft's promises of interoperability. "What you have here are a lot of products and tools that are giving access to, and use of, the Web with a Microsoft-only flavour," he said. "Put these pieces together and throw in the new HailStorm stuff, and you have more Microsoft tools to force more people into a total homogeneous environment."
Others agreed. John Terris, a Microsoft developer and senior programmer at Kend-all Placement Group, said he foresees a repeat of what happened with Java. "Microsoft may release something for other platforms, but it won't work the same," Terris said. "If you're strictly a Microsoft department, it'll work great for you. But if you're a non-Microsoft department, it either won't be as stable or as fast."
