Mixed Reactions To Microsoft Decision

"Microsoft will have more power over the channel," said Sam Tsai, president of Elite Computer Systems, a white-box builder and motherboard vendor based in Fremont, Calif. "That's nothing new, and it's not good. PCs are now so inexpensive. The only expensive part comes from Microsoft."

But Andy Kretzer, director of sales and marketing at white-box builder Bold Data Technology, Fremont, said, "Microsoft does not drive corporate spending. The court cases have not been anything that has affected our day-to-day job in the past year and a half. I'm more concerned with [the election results,with [Frank Lautenberg in New Jersey and [Walter Mondale in Minnesota."

Sean McClelland, CEO of 1hotwebserver.com, a Tarzana, Calif., white-box solution provider, said he wished the legal wrangling would end. "Microsoft will do whatever they want, whenever they want. The one thing Microsoft has going for them is they do it right. Technology would not be where it is today without Microsoft."

Other white-box VARs agreed that Microsoft's business practices actually help their bottom lines. "We like the fact that Microsoft bundles everything together," said JoAnn Evans, vice president of Net%5CWorks, a Minneapolis-based solution provider and systems builder. "It makes it easier for our technicians and customers to use. We don't have to go out and purchase additional products like Internet Explorer, Media Player and Windows messenger."

But Evans doesn't agree with the way Microsoft cuts out the competition or with its pricing strategies. "C'mon, all that money in the bank,the consumers need the break right now," she said.

What the ruling means is that software will continue to be the most expensive component for systems builders, said Tsai.

"Hardware prices are falling month by month, but on the software side, especially the operating system, no one can compete [with Microsoft," he said. "And this could slow the speed of technical advances. Today, hardware is 100 times or 1,000 times faster than 20 years ago. But software is only 30 times or 40 times faster. So there's a lot of room for improvement on the software side. I'm afraid Microsoft will slow down the pace of that improvement."

CRAIG ZARLEY contributed to this story.