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European users react calmly to findings in Microsoft case

November 10, 1999
Web posted at: 10:30 a.m. EST (1530 GMT)

by Terho Uimonen


(IDG) -- Corporate users and industry observers in Europe generally reacted with calm to the news that Microsoft on Friday was declared a monopoly by the judge in a case that pits the world's largest software vendor against the U.S. government.

"That's something they should have thought about 10 years ago," said Conny Björling, IT manager at Adaco, a Stockholm-based food wholesaler, commenting on U.S. District Court Judge Thomas Penfield Jackson's findings of fact issued last Friday, which determine that Microsoft does indeed enjoy a monopoly in the market for PC operating systems.

"Today everything is based on Microsoft's protocols. And like so many other businesses, we rely on Microsoft's software," Björling said. "I don't see us doing anything but continue buying their products until an equally good or better alternative supplier appears in the arena."

Adaco has around 120 users equipped with Windows 95- or 98-based desktop or notebook PCs, while the company's internal network runs on Windows NT, Björling said.

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    "We also use Office, SQL Server, Internet Explorer... you name it," he added, referring to Microsoft's popular productivity application suite, database, and browser software products.

    "I think the monopoly has been chipped away at, but will not be entirely removed," said Eckhard Langen van der Goltz, head of the Munich, Germany-based investment advisory firm PSM Vermögungsverwaltung, referring to the findings issued by Jackson, which can be viewed on the Web (see "Judge Jackson's Findings of Fact," link below).

    Langen van der Goltz also said that Microsoft's share price is overvalued, and European investors on Monday seemed to agree. In midday trading Monday in Frankfurt, Germany, Microsoft shares were selling at an 8 percent discount compared to last Friday.

    Some analysts on Monday were already starting to question the long-term effect on users of this ruling.

    "Microsoft, in whatever form it will end up, will be a very strong competitor and a very innovative force," said Lars Godell, an analyst with Forrester Research, in Amsterdam, the Netherlands, who deals with regulatory and telecommunication issues.

    "Imposing a huge fine doesn't change the fundamentals in the marketplace," Godell said. Microsoft, he said, is facing more of a threat in the marketplace with the decreasing importance of PCs than it does from court rulings such as Friday's.

    In the Internet arena, however, the ruling may have positive effects on standards creation and fuel competition, noted Harald Summa, managing director of the Cologne, Germany-based Electronic Commerce Forum, a German association of companies seeking to promote business over the Internet.

    "We hope that on the basis of these developments, Internet standards can be established," Summa said, pointing out how Microsoft is still trying to establish as a standard its own version of Extensible Markup Language (XML), a language increasingly used for electronic commerce and other Internet-based applications.

    "You just don't have that many alternatives today," Summa said. "Tools today are still too one-sidedly oriented to Windows," he said. Asked if he was a Microsoft user, Summa answered "Yes, unfortunately," and complained of recent woes with a laptop that won't run properly under Windows NT.

    Europe's open-source software vendor community, meanwhile, reacted with cautious optimism to Friday's ruling.

    "I think the position we at Red Hat are going to take on this is 'Let's wait and see'," said Colin Tenwick, vice president and general manager of European operations at Linux vendor Red Hat Software.

    "Clearly, from a Linux perspective, there is an alternative" to Microsoft's products, Tenwick added.

    The popular open-source operating system platform, however, is not a viable enough alternative for most business users to replace Microsoft's full range of software offerings, noted Adaco's Björling.

    Linux and other wannabe alternatives may also benefit from the wave of free publicity they will likely get as more focus now will be placed on looking for alternatives to Microsoft products.

    "I think perception is going to change. People are not stupid. They realize they are paying a lot of money for licensing fees," said Jasmin Ul-Haque, commercial director at SuSE Linux, the U.K. arm of Germany-based Linux vendor.

    "These are all sort of cumulative affects. The Dells and the Oracles of this world will realize they can't just go with Microsoft," added Ul-Haque, referring to companies such as direct PC seller Dell Computer and database vendor Oracle.

    Terho Uimonen is a Scandinavian correspondent for the IDG News Service, an InfoWorld affiliate. With reporting by Mary Lisbeth D'Amico in Munich, and Doug Gray and Jana Sanchez in London.

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    (PC World Online)
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    Judge Jackson's Findings of Fact
    Microsoft Corp.
    U.S. Department of Justice
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