Ruling Good For Some, Bad For Others

"Microsoft should be free to go about its business," said Jeff Moody, owner and CFO of Ping Technology, a solution provider in Waco, Texas. "I don't think Microsoft has done everything the best, but they have done everything well. It's been easy to hang your hat on Microsoft because they've always been a sure bet."

Chris Cangero, vice president at Epoch Data, a Microsoft certified partner and full-range solution provider in New York City, also believes it's best to allow Microsoft to continue its course with limited government interference.

"I don't see any drawbacks [with the ruling," Cangero said. "I'll continue to do business with them in the same way I always had. We have a solid relationship with Microsoft. They give me a lot of tools I need to win business."

U.S. District Judge Colleen Kollar-Kotelly approved most of the provisions of the antitrust settlement between Microsoft and the U.S. Department of Justice, largely setting aside concerns by some states that the sanctions were too light on the software giant.

The sanctions are to last for at least five years unless extended by the court, Kollar-Kotelly said. The approved settlement requires Microsoft to disclose some sensitive technology to its rivals months earlier than the company and the Justice Department had proposed.

From a business perspective, Roland Pinto, CEO of Globabilities, a full-range solution provider and software developer in Lincoln, Neb., said the decision is a "tragedy" because it allows Microsoft to continue its monopolistic practices. But that is not all bad, considering the strength of Microsoft's products and partner programs, he said.

"For the channel, it's a beautiful thing because we will still have Microsoft to provide innovations, and they'll be able to drive the growth of their already excellent products," he said. "It's assuring that Microsoft can continue offering their quality environments. Nobody else can do it better. If they lost, it would just slow down the evolution of the IT channel."

Other solution providers' reactions, however, weren't that positive.

One solution provider, who requested anonymity, said Microsoft customers are fed up with the vendor's domineering licensing and maintenance structures and are looking for alternatives. "For the first time in years, I've had clients ask how they can get completely off Microsoft," he said. "They hate being trapped by Microsoft policies."

Brian Okun, director of marketing at CHIPS, a full-range solution provider in Lake Success, N.Y., said the long-running suit has made him and his customers aware of the few Microsoft alternatives in the market.

"This has opened up different avenues for us," he said. "It made us more cognizant of the other choices out there, such as Linux. Microsoft competitors began appearing on our radar screen. Because of the uncertainty surrounding the outcome of the case, it has made technologies like Linux more appealing."

Some solution providers said they are worried the ruling will allow Microsoft to extend its operating-system monopoly into the emerging Web services arena.

"The Web services space is our biggest concern," said David Koretz, CEO of BlueTie, a Rochester, N.Y.-based developer of hosted e-mail and collaboration tools. "We've already seen that if Microsoft is not forced to do something, they don't do it willing. They will use the same tactics they used against Real Player and AOL to lock them and other third-party developers out of their operating system. The end result is you either buy Microsoft or you can go home. I think [there will be a whole new set of antitrust issues in next three to four years."

But Mike Chaput, president and CEO of PCSNetworks, a Microsoft Gold Partner in Emeryville, Calif., doesn't think that will be the case.

"The notion that Microsoft doesn't have any competition is ridiculous. They have an enormous amount of competition," he said. "They are constantly innovating, which drives their business and mine too."

Phil Perkins, founder and CEO of Acumen, a Richmond, Va. solution provider, called the case a waste of government time and money. "In my opinion, this was all a witch hunt and apt to go a long way towards curtailing innovation in the software industry," he said, noting ultimately it will have no impact on the channel.

John DeRocker, senior vice president of sales and marketing, Nexus Information Systems, Plymouth, Minn., agreed. "I could care less," he said. "It doesn't affect my business one way or the other. No matter what happens, the product is still going to be there for the next 12 months because there is nothing else out there."

Mark Tebbe, a longtime solution provider who was close to Microsoft and is now a board member of SBI and Co., a Salt Lake City solution provider, noted that the European Union has yet to even start its case against Microsoft. "Microsoft is not out of the woods," he said. "But I think it is awfully hard to have the government manage the creative juices of a company."

Lou Hutchinson, CEO and president of Crunchy Technologies, a solution provider/ISV in Arlington, Va., said ultimately the case raised the awareness of "potential monopolistic practices."

JENNIFER HAGENDORF FOLLETT, MARCIA SAVAGE, CRAIG ZARLEY, AMY ROGERS and ELIZABETH MONTALBANO contributed to this story.