Tuesday, October 21, 2003


New York Post Online Edition: business  

New York Post Online Edition: business: "M'SOFT'S SUITE DEAL


October 21, 2003 -- For competitors, Microsoft's Office 2003 looks like déjà vu all over again.
Having famously used the dominance of Windows to rule the Internet browser market, the tech giant now is using the ubiquity of Word, Excel and Outlook to attack the server software industry.
Some of the new features of Office 2003, which will be unveiled here today by Bill Gates, won't even work without another program, Microsoft Windows Server 2003.

'Clearly a main goal here is attaching server software to Office,' said Joe Wilcox, an analyst with Jupiter Research. 'They're trying to leverage sales.' The Office suite of programs is used by more than 90 percent of all business PCs in the nation. It's Microsoft's cash cow, generating $7 billion in operating earnings in the fiscal year 2003 - accounting for 28.6 percent of Microsoft's revenues and more than half its earnings.

But on the server side, Microsoft is locked in a battle with IBM, Novell and Oracle, among others.
Now, to pump up server-software sales, Microsoft has tied Office even more closely to its mainframe products.
For instance, the new Office allows 'rights management,' the ability to tag a file so that only certain employees may open it. However, that only works if Office is running through Microsoft's server software.
Analysts say the industry should expect the same sort of 'integration' in the new version of Windows, code-named 'Longhorn,' when it premieres in 2006.

But Microsoft is trying to avoid the antitrust battles that followed the Internet Explorer 'bundling.' The company says it doesn't force anyone to buy its server products - it simply notes that Office will work better with them"

I forsee a fight over this tactic. It's a nice try by Microsoft, but it's going to cause the courts to notch up their scrutiny, IF it makes it past them at all. It's a mistake, plain and simple. This is tthe wrong tactic at the wrong time.

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