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Do Microsoft & Intel still rule the day?


March 16, 1999
Web posted at: 10:52 a.m. EST (1552 GMT)

by Matt Hamblen

(IDG) -- Despite government antitrust actions and some new competition, the Wintel duopoly will continue to dominate the desktop for a long, long time, users and analysts said last week.

"If the power's real and [the] perception of it is real and if the customers don't have a strong belief that Microsoft's practices will be modified, [the government] may not have accomplished much at all," said Tyler Baker, an attorney in the antitrust division of the U.S. Department of Justice in the early 1980s and now a partner at Carrington, Coleman, Sloman & Blumenthal LLP in Dallas.

In fact, observers said competition from innovations such as the Linux operating system and cheaper chips will be more important in checking the future growth of desktop partners Microsoft Corp. and Intel Corp. than any current government investigations.

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"I don't see any changes for Wintel's position. And even though Microsoft keeps shooting itself in the foot in the trial, it won't matter," said Ed Mackereth, a distributed systems integrator at American Trust Bank in Cumberland, Md., which has 3,000 Windows desktops. "There's no way that the government can make Microsoft stop doing the things they do."

Added analyst Chris Goodhue at Gartner Group Inc. in Stamford, Conn., "Wintel has a huge installed base, and if there's any demise coming, it's a long time coming."

Meanwhile, it's up to users to try and gain some advantage from the years of government scrutiny, according to William Kemp, information technology director at Arizona Mail Order Inc. in Tucson, Ariz. "We're becoming more reliant on [Wintel] software. When they make decisions, we have to take a position. It is in our best interest at this point" to apply pressure, Kemp said.

Independent stand

Monty Sharma, chief technology officer at Maritime Telegraph and Telephone Ltd. in Halifax, Nova Scotia, said he sees his corporate IT peers standing up to Microsoft and being willing to move to a different platform if Microsoft doesn't give them what they want. "Look at Linux," he said. "They're not such an unassailable threat that if they do something stupid, we won't move."

"All of us want just enough stability so we can sleep at night. But Microsoft is too big and has too much money to ever be out of our faces, so why not shake them up a little?" Sharma said.

At best, the government may have already been partially effective in that Microsoft has backed off from some of its exclusionary practices, said Constance Bagley, a senior lecturer in law and management at Stanford University School of Business. If accepted, last week's settlement between Intel and the Federal Trade Commission on the eve of that trial would force Intel to stop trying to choke off partners who threaten to sue, she added.

Another plus, according to Esther Dyson, chairman of EDventure Holdings Inc. in New York, is that PC makers and other vendors have been able to demand more flexibility from Microsoft and Intel during the antitrust investigations. "This changes the balance of power," Dyson said.

Even so, many observers said the government's actions against the two companies will have little public impact, particularly in terms of trickling down to users. That may be because "the really difficult issue is finding some kind of remedy even if the government has a slam dunk," said Evangelina Almirantearena, an attorney at the Washington-based law firm Howrey & Simon and a Justice Department antitrust attorney from 1988 to 1996.

In Intel's case, the FTC's lack of action will maintain the status quo because the government has been investigating Intel since 1991 and has never made a ruling against the company. Yet the FTC last week said an investigation continues apart from the settlement.

Users said they worry that the antitrust actions won't bring down prices or boost competition noticeably. Some blamed a dearth of meaningful competition and the inability of either the government or the free market to change that.

"I can't really see [Wintel] being displaced for a long time," said Joseph Preski, CIO at Hyundai Precision America Inc. in San Diego. "And the competitors are not showing me much, either."

Computerworld writers Stacy Collett, Stewart Deck, Sharon Gaudin, Thomas Hoffman, Kim S. Nash, David Orenstein and Patrick Thibodeau contributed to this article.

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