Microsoft executives, still buoyant from Friday's historic anti-trust ruling, took a victory lap on their home turf Tuesday, showcasing products from the Tablet PC to MSN 8 and accepting the robust praise from some of the most relieved shareholders in the country.
The company that once faced a court order breaking it in half now sees a future of unimpeded growth potential in multiple markets, thanks to a federal court judge's ruling widely seen as extremely favorable to Microsoft. That historic development clearly pleased upbeat shareholders gathering for Microsoft's previously scheduled annual shareholders meeting.
Microsoft chairman Bill Gates has to be feeling optimistic these days. While he carefully avoided gloating in his first public appearance since the historic anti-trust ruling, Gates said he is pleased with the ruling, saying it provides clarity and that the company is committed to being very smart and serious in complying with it. "Our mood is one of optimism in terms of what we can do with our products," Gates told shareholders.
In an industry that changes as quickly as this one, a certain humility about predicting the future is in order. And the argument for doing as little as possible while still being effective is strong. Breaking up a company that has been an engine of productivity always seemed rash, and the plaintiffs -- federal and state alike -- in any event abandoned the idea. The remaining question was how aggressive the court-imposed behavioral restraints should be. The agreement worked out between the federal government and the offending company, though belittled by some, may prove to be a meaningful check on Microsoft's excesses.
To what does Microsoft owe its victory in its landmark antitrust battle? Was it the brains of Gates & Co.? Was it the company's fabled toughness or its near-religious devotion to the principle it can put anything it wants into the Windows operating system? I don't think so.
Until U.S. District Judge Thomas Penfield Jackson started shooting his mouth off to the media, a big taboo among jurists, things had been going downhill rapidly for Microsoft. Its lawyers, up against a highly skilled antitrust litigator in the Justice Dept.'s David Boies, were contantly flummoxed and ultimately faced a court-ordered breakup.
With Beta 1 kits out the door to thousands of Office 11 testers who are eagerly hunting for bugs, Microsoft has begun preparations for a second beta phase that is set to begin in Spring 2003. Office 11 Beta 2 will be larger than the first beta, and Redmond is currently accepting nominations from those interested testing the next-generation Office suite.
"For Beta 2, the Office team is looking for customers to provide high quality, early feedback on the next version of Microsoft Office," reads a note on Microsoft's Beta Place Web site. "Now is your chance to nominate on the waiting list for what promises to be the most innovative release of Office to date!" Interested Office users can sign up for Beta 2 by completing a short survey located at Beta Place using the Beta ID: GEXTSU and Password: B15LIMK.
As of tomorrow, the fate of the Tablet PC is out of Microsoft Chairman Bill Gates' hands. Unlike one of Gates' previous pet projects, the ill-fated Microsoft "Bob" social-computing interface, the success or failure of the Tablet is dependent on the PC vendors and ISVs (independent software vendors) writing the apps that will run on top of Windows XP Tablet PC Edition.
About 10 consumer PC vendors are expected to trot out their wares at the New York City Tablet PC unveiling. At least two dozen software vendors-including Microsoft's own Office division-will be showing versions of their Tablet wares. Some ISVs are looking to broaden the "information worker" target that Microsoft has set for the devices. Others see vertical markets as a prime Tablet market.
With open-source offerings threatening to encroach on its imperious market position, Microsoft Corp. is under pressure to demonstrate that its products deliver superior value, despite any cost disadvantages. Although it's tough to compete with free, Microsoft has made a solid early case for itself with the first beta of Office 11, its next-generation office productivity suite.
Office 11 promises to be the most Internet-connected Office release to date, and the bulk of the new and freshened functionality depends on Microsoft's SharePoint Team Services. SharePoint allows for some impressive collaborative features in Office but requires an all-Microsoft back end of .Net Server 2003, Internet Information Services and SQL Server to operate.
Office 11 won't ship for another year, so it's too early to say who will benefit from an upgrade. The suite's interface enhancements are valuable, but eWeek Labs' tests of the beta provide limited reasons for upgrading.
Following slow adoption of Active Directory after its release as part of Windows 2000 three years ago, Microsoft Corp. has been actively urging IT managers to deploy its directory services platform through aggressive pricing, detailed deployment road maps and increased support. And with Microsoft releasing a new capability in AD that will enable organizations to run AD as a non-operating system service (meaning it does not require deployment on a domain controller) immediately following the release of its .Net Server 2003, enterprises that were on the fence about deployments may finally find a reason to make the leap.
No way, you say? Well, it's true: Though its code is far from rock-solid, the Colossus of Redmond is making recognized strides. When a perennial computer-security punching bag gets an exemplary grade for security, you have to scratch your head. But that's precisely what happened when Microsoft announced on Oct. 29 that its Windows 2000 Pro software line had received the so-called Common Criteria certification, an internationally recognized standard for secure design and implementation of info-tech products. Fourteen Western countries are now signatories of the Common Criteria, which is widely considered the gold standard of security certifications, the big kahuna that carries the most weight.
Microsoft's executives said on Tuesday the company had no plans to pay dividends from its $40.5 billion in cash holdings as long as the software giant faced the threat of further litigation. At its annual shareholder's meeting in Bellevue, Washington, stakeholders in the world's largest company had a pointed question for executives: Will Microsoft, which has never paid dividends since going public in 1986, start paying out?
"While the ruling on Friday was a positive, we still face some significant legal issues, and in light of those legal issues to date the board has determined it would not be appropriate to commit to a long-term program like a dividend until that's cleared," Microsoft Chief Financial Officer John Connors told shareholders at the company's annual meeting.
Shares in Adobe Systems dropped Tuesday after a banking analyst issued a report saying the publishing-software giant may be hurt by last week's settlement of Microsoft's antitrust case. Deutsche Bank analyst Peter Ausnit lowered the bank's rating on Adobe from "hold" to "sell." The downgrade was based partly on concerns that Friday's settlement of the Microsoft case on terms largely favorable to Microsoft will embolden the software giant to compete more directly with Adobe in key markets, including the one addressed by Adobe's Acrobat software for creating electronic documents.
"Many observers expect to see a more aggressive Microsoft now that the settlement has been accepted," Ausnit wrote in a report. "We do...Investors are right to focus on the risk, since Adobe all but positioned Acrobat as an add-in for (Microsoft) Office."