September 21, 2007 9:20 AM PDT

Week in review: Microsoft in the crosshairs

Microsoft found itself the popular target this week, with antitrust woes returning and new software battles emerging.

A European court dealt a severe blow to Microsoft's competitive ambitions in Europe Monday by siding with regulators in an antitrust case against the company. In its ruling, the Court of First Instance upheld European Commission claims that Microsoft abused its dominant position in the operating system market. Microsoft's allies and competitors have been closely following the case since the Commission imposed antitrust sanctions against the company in early 2004.

The court's decision is expected to have far-reaching implications for consumers, computer makers, Microsoft competitors and, perhaps most pointedly, the Commission's ability to regulate technology companies on antitrust matters, legal experts and industry observers say.

Neelie Kroes, the EC's Competition Commissioner, said that should Microsoft comply with the Commission's order, she expects to see a "significant drop" in Microsoft's overwhelming market share.

And while she gave no estimate as to how steep she expects that drop to be, Kroes noted that it would likely be more than a few percentage points as more competitors enter the market.

"These court findings are just the justification EU has now to protect its local technology companies against any international competition through law, instead of quality and innovation, the same way they do with agricultural products, chemicals, etc.," wrote one reader the CNET TalkBack forum. "The US companies that sided with EU this time for greed will soon realize that you sometimes should think twice before making your wish..."

On the software competition front, Microsoft was on the receiving end of a couple of Office salvos.

After years of watching Microsoft rake in billions of dollars from its desktop software franchise, its competitors are pouncing.

IBM on Tuesday announced the release of Lotus Symphony, a suite of free desktop applications based on the open-source product.

Separately, Yahoo said that it paid $350 million to acquire Zimbra, a start-up that developed a Web-based e-mail and collaboration package comparable with Microsoft Exchange and Outlook.

Meanwhile, Google introduced Google Presentations, an online version of Microsoft's PowerPoint presentation application that complements Google's Web-hosted document editor and spreadsheet.

The flurry of investment in productivity software points to technology and business changes in the IT industry that are making Microsoft's cash cow vulnerable to alternatives, particularly among small businesses and consumers.

Intel's power play
With the next two generations of Intel's chips set in place, the company is looking forward to a low-power future, Intel CEO Paul Otellini said in his keynote address kicking off the Intel Developer Forum in San Francisco. Intel will launch the server and high-end desktop versions of its Penryn generation of chips on November 12, in line with previous reports expecting those chips before the Thanksgiving holiday. And Intel has also completed the design for Nehalem, a more radical overhaul of the company's chip blueprints.

Pat Gelsinger, general manager of Intel's Digital Enterprise Group, demonstrated a Nehalem-based system at the Intel Developer Forum here that he said will bring major performance improvements for the company's x86 processor line. The processor family itself is due to arrive in 2008.

The Nehalem demonstration featured a system with two quad-core processors; each processing core can handle two independent instruction sequences called threads, and the demo showed all 16 threads at work on various tasks. The processor was the very first incarnation of Nehalem--the "A0" version--built for the first time three weeks ago, Gelsinger said.

Intel also detailed an effort called, a combination of open-source software and helpful hints to reduce power consumption of Linux servers, PCs and gadgets. Renee James, vice president and general manager of Intel's Software and Solutions Group, said the effort is geared toward technically sophisticated folks from programmers to system administrators. It gathers together a number of Intel projects, such as the PowerTop utility for finding which software is pestering the processor and preventing it from dozing in low-power states.

CONTINUED: Moon shot…
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They failed to understand..
..the MS thrives under competition, just ask Sony. MS didn't climb to the top of the console market (in terms of console games sold because it had any kind of monopoly in that market. EU's dicision is political, MS is a US company.
Posted by FutureGuy (742 comments )
Reply Link Flag
Actually, no. MSFT (in the case of Xbox) climbed to #2 (still quite a distance behind the Nintendo Wii) because of two factors:

1) they could throw a shedload of money at Xbox, take losses the whole time, and not have to worry about it (yet).

2) Sony screwed up. The PS2 was a raging success due to decent pricing, good games, and solid performance. The PS3 flopped because it was over-priced, had few games going for it, and can't seem to compete with the (Still selling) PS2, let alone the Xbox.

3)Halo, which MSFT bought and made Xbox-only for a very long time. w/o it, the xbox would've went the same way as the Zune a very long time ago.

Neither is innovation, but a combination of luck and money. Meanwhile, Nintendo is beating the crap out of MSFT in the console market.

Try again? ;)

Posted by Penguinisto (5042 comments )
Link Flag
American Incompetence
I am no big fan of Microsoft either,what with everything they've pulled over the years :-)But this is simply a case of more American Incompetence!
Why in the world should Americans be helping foreign entities(legal or not)rip at segments of our biggest economic exports?Perhaps this helps explains why the trade deficit is slowly approaching the trillion dollar mark(and why Canadian and American dollars will soon be equal).
This is just another example of why America is decling in general;we are basically tearing ourselves apart!
I hate to be pessimistic,but it sure seems this way!One day in the future,people will view this time in American history as the generation('s) that sold America out!
Posted by olinz (4 comments )
Reply Link Flag
I applaud the EU
The EU upheld law and order, as opposed to the US system in the same circumstance upholding corruption and deceit. The EU has proven its lands to be more inviting to those who wish to live a life where there is no breakdown of law and order on behalf of corruption and deceit. You can't buy off the EU. This is a lesson and a precedent. No money is big enough to bribe off the interests of the regulators of the economy of Europe. I wish I could live out there.
Posted by bcroner (12 comments )
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MS Should Have Made Euro-only Products
While the new OS / Office / whatnot is in beta, take it and their checkbook to Neelie Kroes, ask her what she needs to make her happy, and make a Euro version. No Media Player? Not a problem. No browser? Sure, no big deal. No slick APIs that actually work. Absolutely! Office suite that doesn?t' integrate with itself. Outstanding! Leave behind a few million for Neelie's slush fund? Just the cost of doing business overseas.

Then sell MS-Whatever/Euro for the same price as the real deal, and see just how many get sold. No, wait: Neelie probably would want only the Euro version forced on European consumers. Can't have any freedom of choice in her socialist worker's paradise.
Posted by Too Old For IT (351 comments )
Reply Link Flag
MS should be stopped
I quote from your article
<<<to protect its local technology companies against any international competition through law, instead of quality and innovation, the same way they do with agricultural products, chemicals, etc.," wrote one reader the CNET TalkBack forum. ">>>
but the reader to be fair should have added THE SAME WAY THAT USA DO WITH for example SOUTHAMERICAN AGRICULTURAL PRODUCTS

But the main thing is that MS should be stopped in pretending to own the world an be over the rights and laws : just look their privacy invading software inserted in their products.

Also MS software policies should be revised in order to get better universal standards in computing and not the childish bug full staff that MS imposes and sells.

USA consumers should learn from CE to defend themselves.
Posted by balonga (18 comments )
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