A post-Windows world?

National | A court's punishment of "monopoly" Microsoft may be light, compared to what the market has in mind

Issue: "Forbes," Nov. 20, 1999

Monopoly 1.0
Since a federal judge has ruled that Microsoft wields monopoly power in the PC world, what will happen to the typical user? Not much, right now-and in a few years it may not even matter. U.S. District Judge Thomas Penfield Jackson sided with Janet Reno's argument that Bill Gates's empire stifled innovation and hurt consumers by limiting choices and inflating prices, especially by bundling the Internet Explorer web browser with the Windows operating system. Mr. Gates himself kept his cool, saying that Microsoft "respectfully disagrees with a number of the court's findings," and that the ruling was "just one step in an ongoing legal process." Meanwhile, observers wonder whether the software giant is hoping for a negotiated settlement to keep Judge Jackson from thrashing it in his final antitrust decision. True, Microsoft dominates operating systems and has Windows running over 90 percent of the world's PCs. But that's not where the action is. Except for grabbing browser dominance, Microsoft has been lagging behind as an Internet power for years. Competitors are already looking to a post-Windows world, such as Hewlett-Packard's paradigm of "pervasive computing" (see next item). In the pre-Web world, Windows and its predecessor DOS (disk operating system) were a de facto standard that allowed people to move information from machine to machine. Today, Internet standards work regardless of operating system, so who needs Windows to check his email? Numerous companies are now working on simple Net-surfing computers that let people hit the Net without running Microsoft software. The worst-case scenario for Microsoft is an AT&T-style breakup that would scatter its assets and power. Judge Jackson could also order Microsoft to allow competitors to release rival versions of Windows or open its core product to other companies. But will it matter soon? Such a scenario is likely only to speed up what is happening already. Whatever happens in the end, the computing world will soon change radically and Microsoft's future as the dominant software player is uncertain. Web everywhere
Ready for "pervasive computing?" This may be the high-tech buzzword of the next decade as computers leap off the desktop to deliver information to users anywhere at any time. Last week Hewlett-Packard researchers at a Palo Alto, Calif., press conference showed off this vision of the future where users can access the Web at home, in a car, or waiting for a bus. Pervasive computing, "the concept that computers in the future will be as inextricably woven into our daily lives as electricity is today, is an idea whose time is coming very, very rapidly," said Dick Lampman, director of HP's technology research laboratory. His colleagues showed off inventions like a prototype flat-screen touchpad panel that connects to a normal desktop PC by radio waves; it acts like a portable computer by using this hookup. The point of pervasive computing is that hardware and software must reduce the number of steps required to obtain some information. Today, for instance, many websites offer driving directions from any two addresses in the United States. But for the lost driver motoring around some unfamiliar suburb, running home to get online isn't an option. So in-dash navigational systems using a wireless Web connection will take up the slack. Hewlett-Packard (which is unrelated to the troubled Packard Bell) wants a piece of the action in this new world. As machines become more powerful, they become smaller and open up new applications beyond mere word processing, spreadsheets, and video games. Some say the future of computers will be like the present-day world of electricity: invisible. When you need something, you flip a switch without thinking of the power lines and transformers. Packard Bell packs it in
Computers are becoming so cheap that even cheap computer companies can't catch up. Say goodbye to Packard Bell, which once led the industry in selling PCs to home customers. After falling from dominance and losing $650 million last year, its Japanese bosses at NEC decided to pull the company out of the U.S. market by the end of the year. The Packard Bell brand started in 1926 and was most often seen on radios and TVs; after Packard Bell floundered, the computer company NEC bought the name in 1986 to give customers a familiar brand. While most PC marketing was still in Nerdsville, the new Packard Bell aggressively marketed products to ordinary people, bundling software with its machines so users could come home, plug in their new machines, and start working. This is all commonplace today, but was not a decade ago. For years, Packard Bell lived in the cellar of consumer and analyst surveys of quality and service. At one time, Packard Bell was one of the few companies offering full systems at $1,000 or lower. Now nearly every major player is in this arena. The PC industry is undergoing a heavy shakeup time right now, with Packard Bell going away and Acer and IBM focusing on online sales. A zesty startup called Emachines is going after Packard Bell's old market, with ultracheap PCs in flashy boxes. In the PC price wars, the consumer may be the only winner.

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