Time: Microsoft’s Future

“What’s worse for a software company than being told it
broke the law? Only this: Being told it makes an inferior
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.

“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.”