Event Summary
Washington DC - 20 June 2000 Judge Thomas Penfield Jackson issued an order certifying the Microsoft case for direct review by the Supreme Court. Microsoft has argued for taking the case initially to the Federal Appeals Court in Washington, D.C.
Market Impact
There's been a lot of recent scholarship regarding the Microsoft antitrust case, and what each new development means ("Judge orders breakup!" "Supreme Court to review case.") We'd like to assemble some of the most likely scenarios into a possible map of how the next few years will unfold for the Redmond software titan.
October 2000: US Supreme Court receives case on direct appeal from the United States District Court. November 2000: Vice President Albert Gore wins the Presidential election. In his first post victory press conference, he announces that he "sees no reason to interrupt the process now." Microsoft stock tumbles 10% on the announcement. January 2001: Oral arguments are heard before the Supreme Court. Bill Gates triumphantly announces, in a hastily called press conference that "Microsoft has restored liberty and freedom here in the home of our nation." Only four newspapers in the country use headline "Judgment Day for Microsoft". August 2001: Microsoft files motions for Judge Jackson to recuse himself. September 2001: U.S. Court of Appeals hears recusal motion. Motion is denied later in the month. October 2001: Testimony begins late in the month regarding remedies. Also, Microsoft releases Windows 2001 - the "Whistler" release that unifies its 95/98/ME and NT/2000 kernels. Win2001 includes optional subscription components that interface with Internet providers. Microsoft ships components for Amazon.com purchases, the newly merged Yahoo/eBay auctions, a "camera locator" for the new CBS-Big Brother 24 hour real-time cable channel, and a voice recognition telephony component that locates callers anywhere on the PacBell or MCI WorldCom voice networks. Microsoft stock closes unchanged on release day. November 2001: Gates testifies. As a side note, Gates and Oracle CEO Larry Ellison engage in a heated yelling match outside the courthouse. Microsoft stock drops 4 on the news. Testimony ends. January 2002: Judge Jackson orders a three-way breakup of Microsoft - applications, operating systems, and Internet companies. Appeals are immediately filed with the Court of Appeals. April 2002: Appellate arguments for US v. Microsoft. June 2002: Citing the "arduous road" which this case has taken, U.S. Court of Appeals issues a decision, reversing the conduct decrees proposed by Judge Jackson but leaving the breakup order intact. Case reappealed to Supreme Court, which grants certiorari. December 2002: Oral arguments before the Supreme Court. June 2003: In a 6-3 decision, the U.S. Supreme Court rules that.
November 2000: Vice President Albert Gore wins the Presidential election. In his first post victory press conference, he announces that he "sees no reason to interrupt the process now." Microsoft stock tumbles 10% on the announcement.
January 2001: Oral arguments are heard before the Supreme Court. Bill Gates triumphantly announces, in a hastily called press conference that "Microsoft has restored liberty and freedom here in the home of our nation." Only four newspapers in the country use headline "Judgment Day for Microsoft".
August 2001: Microsoft files motions for Judge Jackson to recuse himself.
September 2001: U.S. Court of Appeals hears recusal motion. Motion is denied later in the month.
October 2001: Testimony begins late in the month regarding remedies. Also, Microsoft releases Windows 2001 - the "Whistler" release that unifies its 95/98/ME and NT/2000 kernels. Win2001 includes optional subscription components that interface with Internet providers. Microsoft ships components for Amazon.com purchases, the newly merged Yahoo/eBay auctions, a "camera locator" for the new CBS-Big Brother 24 hour real-time cable channel, and a voice recognition telephony component that locates callers anywhere on the PacBell or MCI WorldCom voice networks. Microsoft stock closes unchanged on release day.
November 2001: Gates testifies. As a side note, Gates and Oracle CEO Larry Ellison engage in a heated yelling match outside the courthouse. Microsoft stock drops 4 on the news. Testimony ends.
January 2002: Judge Jackson orders a three-way breakup of Microsoft - applications, operating systems, and Internet companies. Appeals are immediately filed with the Court of Appeals.
April 2002: Appellate arguments for US v. Microsoft.
June 2002: Citing the "arduous road" which this case has taken, U.S. Court of Appeals issues a decision, reversing the conduct decrees proposed by Judge Jackson but leaving the breakup order intact. Case reappealed to Supreme Court, which grants certiorari.
December 2002: Oral arguments before the Supreme Court.
June 2003: In a 6-3 decision, the U.S. Supreme Court rules that.
Well, at that point, it's almost immaterial isn't it?
Microsoft is facing a nearly three-year delay in the remainder of the antitrust action. In the meantime, it's facing a market that is increasingly looking to non-PC centric computing. The Microsoft.NET initiative purports to change this - it's a mix of server-centric, subscription-based Windows/Internet components. But it's a major shift in direction.
In 1995, Bill Gates launched his now famous "100 Days" initiative to get Microsoft in tune with the Internet. At the time, developers had little risk in developing applications for a 32-bit Windows platform.
But now? Who's going to bet the farm on a "platform" that may be torn asunder at any point? The best-case assessment of Microsoft.NET is that it's a great enabling technology but one that will evolve with Microsoft's legal position. Gates & CEO Steve Ballmer have positioned NGWS/Microsoft.Net as a "bet the company strategy", but that moniker is, perhaps, better affixed to the appeal.
We understand management fiduciary responsibility to defer or prevent Microsoft's breakup. Microsoft can wait for the decision, but developers won't. In three more years, Java/Linux application servers will be even more entrenched than they are now, unless Microsoft can reassure the public about its own viability.
All the breakup scenarios proposed by the Court would keep server applications - not just Office - away from the OS group. This reminds us of the old riddle about roosters laying eggs on the peak of a roof - which way do they roll? A server-hosted COM object that provides application services - is it an application or an OS component? Until that's clear, the Windows development roadmap will remain mired.
User Recommendations
Microsoft CEO Ballmer has said that Microsoft.NET is a product, a service, and a strategy. Unfortunately, Steve, it's none of those yet. We recommend planning around the initiative until it acquires crisper focus and a clear patron in a post-antitrust "Baby Bill".