| In recent years, Microsoft has focused
on three big tasks: building robust security into its software, resolving
numerous antitrust complaints against it and upgrading its Windows operating
system. These three tasks are now starting to collide. On August 27th the firm said that the successor to its Windows XP operating system, code-named Longhorn, will go on sale in 2007 without one of its most impressive features, a technique to integrate elaborate search capabilities into nearly all desktop applications. (On the bright side, Longhorn will contain advances in rendering images and enabling different computing platforms to exchange data directly between applications. ) It is a big setback for Microsoft, which considers search technology a pillar of its future growth -not least as it competes against Google. The firm's focus on security championed by Bill Gates himself--took resources away from Longhorn, admits Greg Sullivan, a lead product manager in the Windows client division. Programmers have been fixing Windows XP rather than working on Longhorn. In mid- August, Microsoft released Service Pack 2, a huge set of free software patches and enhancements to make Windows XP more secure. Though some of the fixes turned out to have vulnerabilities of their own, the patches have mostly been welcomed. Microsoft's decision to forgo new features in return for better security is one that most computer users will probably applaud. Yet ironically, as Microsoft slowly improves the security of its products---by, for instance, incorporating firewall technology, anti-virus systems and spam filters its actions increasingly start to resemble those that, in the past, have got the firm into trouble with regulators. Is security software an "adjacent software market", in which case Microsoft may be leveraging its dominance of the operating system into it? Integrating security products into Windows might be considered "bundling" which, with regard to web browsing, so excited America's trustbusters in the 1990s. And building security directly into the operating system seems a lot like "commingling" software code, on which basis the European Commission ruled earlier this year that Microsoft abused its market power through the Windows Media Player. Microsoft is appealing against that decision, and on September 30th it will argue for a suspension of the commission's remedies, such as the requirement that it license its code to rivals. Just last month, the European Union's competition directorate began an investigation into Microsoft and Time Warner, a large media firm, on the grounds that their proposed joint acquisition of ContentGuard, a software firm whose products protect digital media files, might provide Microsoft with, undue market power over digital media standards. The commission will rule by January 2005. Microsoft, it seems, in security as elsewhere, is going to have to get used to being punished for its success. Its Windows monopoly lets it enjoy excessive profits but the resulting monoculture makes it an obvious target for viruses and regulators alike. |