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Time: Microsoft's Future

Apr 22, 2000, 01:27 (13 Talkback[s])
(Other stories by Chris Taylor)

"What's worse for a software company than being told it broke the law? Only this: Being told it makes an inferior product. Scarcely a day after Judge Jackson's ruling of law last week, AOL and Gateway unveiled a trio of low-cost Internet-access devices that pointedly excluded Microsoft from their party. The devices--a countertop, a desktop and a wireless Web appliance--use upstart Linux, rather than Microsoft's Windows, as their operating system. Linux, according to AOL and Gateway execs, beat Windows to the punch by being faster and more reliable. Ouch."

"Chalk it up to longstanding Microsoft-AOL rivalry if you will. But "netpliances" like the new Gateways are a portent of precisely the kind of products that could release--faster than any judge--Redmond's iron grip on the software industry. By 2004, analysts expect this kind of cheap-and-easy surfing gadget to outsell PCs. In this market, the most unobtrusive operating system wins, and the feature-heavy heft that won the desktop wars for Microsoft becomes a liability. "Most of these devices have no need for a Windows experience," says Dan Kuznetsky, a system-software analyst at technology firm IDC. "Who needs a week-long training class to learn how to use a Web cell phone?""

"So would Microsoft consider ditching its crown jewels and starting from scratch with a simpler operating system? Never. "Two words: Windows survives," says senior strategist Craig Mundie. The company expects us to continue buying PCs alongside our handy little mobile Net appliances. But it's also throwing buckets of money at research to make existing versions of Windows better, lighter and cheaper. Meanwhile, its hardware partners are planning a stream of funky little gadgets to seed with Microsoft's DNA. If Mundie has his way, "powered by Windows" will become the selling point for the '00s that "Intel inside" was for the '90s."

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