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. Last Updated: 07/27/2016

Breakup May Speed Up Products




NEW YORK -- More operating system alternatives to Windows. More software that loads from the Internet, rather than your computer's hard drive. More "Internet appliances" running all of the above. And yes, more reliable products, even from Microsoft.


Those broad and deep trends affecting computer users were well under way before Wednesday's ruling sundering Microsoft into two companies. And industry observers Wednesday said that competitors emboldened by changes in how people use computers within the new Internet economy will continue to press ahead regardless of Microsoft's success in appeals.


Breaking up Microsoft might speed development of competing products as each side of the former Microsoft monolith forms new strategic alliances, some analysts suggested, but they noted those products were coming down the line anyway.


"A few years ago, when you went for venture capital, the question was 'What is your strategy to prevent Microsoft from crushing you?'" said Alex Edelstein, CEO of Viralon and a former employee of both Microsoft and rival Netscape. "Now, the overall process is encouraging companies to enter spaces where they might someday be able to compete with Microsoft."


His company will be invading Microsoft turf with an as-yet-unannounced online marketing product.


There are few better examples of this phenomenon than the spectacular growth of the Linux operating system and related "open source" software, which has been developed collaboratively over the Internet, rather than as a closely held proprietary secret.


As Microsoft has stewed in antitrust woes, companies working under the open-source model have raised hundreds of millions of dollars from eager investors. "The marketplace is already deciding that open source gives more freedom than Microsoft's proprietary way," said Tim Buckley, chief operating officer of the biggest such firm, Red Hat Linux, "and that's happening regardless of whether Microsoft is broken up or not."


Buckley points out that Linux's share of the all-important server market, the basic infrastructure of the Internet, has grown from 15 to 25 percent in the past year f a time when Microsoft was desperately promoting its own solutions in that area.


Other companies, meanwhile, are developing Linux "Internet appliances" that are cheap, because they pay no royalties to Microsoft, and reliable, because the operating system can be carefully hand-tuned to the device.


Edelstein also expects strides in software quality.


"When you find a space where there is a lot of competition, you see very quick improvement for the consumer," he said, citing the example of multimedia software. "Microsoft and Real Networks are constantly banging into each other, and they're constantly improving their products."