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Views Differ on Microsoft Breakup

June 8, 2000

ATLANTA (AP) _ Consumers were divided in praising and criticizing a judge’s decision to break up Microsoft Corp. But most people said the order would have little impact immediately, if ever, as the case enters what is expected to be a lengthy appeals process.

``I think it is a waste of time for the government to pursue it. By the time a decision is reached it will be obsolete,″ said Jeff Hamblen, administrative assistant for a life insurance company in Dallas.

``I don’t think splitting the company will make a big difference,″ said Janet Barrs, 30, a production coordinator for a Salt Lake City photography studio. ``It’s kind of like AT&T. They became strong because there was no competition and the government opened up competition but it is still a strong company.″

Analysts generally agree that Wednesday’s ruling will have little immediate impact on consumer and corporate users of Microsoft’s products.

At the Supercomm 2000 trade show here, businesspeople said they had no plans to stop making their products compatible with the world’s biggest-selling operating systems.

``I’ve been in this industry a long time, and you’d be foolish to (stop developing products for Windows). NT is a great play,″ said Mark Rubin of Phonetic Systems, referring to a Microsoft network-oriented system widely used by large companies.

Rubin’s company, based in Burlington, Mass., makes voice recognition systems for corporate telephone directories that run on Windows NT.

The latest events in Washington ``wouldn’t be a concern,″ said Rubin.

Microsoft employees working at the company’s pavilion said plenty of people had mentioned their company’s legal battle with the Department of Justice, but more out of interest than concern about whether to invest in Windows-based products.

``Nobody is saying I won’t go with this because of the whole DOJ thing,″ said Hans Hoffman, a Microsoft exhibitor. ``I get asked all the time what I think will happen, but it’s on a personal level, like how’s the mood at the company, not in terms of the ramifications of the decision.″

Why so little worry?

To begin with, Microsoft’s expected appeal should drag on for at least a year if not two. And even if Microsoft loses, it would take a while for the actual breakup to produce real change in market dynamics.

Furthermore, technology changes so quickly that by the time the case is finally resolved the entire computing landscape will be different. And everyone expects Microsoft to continue to adapt.

Initially, one of the two companies created in the breakup would make the Windows operating systems while the other would produce programs like the Microsoft Office suite of business applications.

Only then would the market begin to evolve.

``Tomorrow morning at 9 o’clock, what is different? If you are an information technology manager are you going to change buying decision? Probably not,″ said Barry Jaruzelski, a partner specializing in computing with the consulting firm Booz-Allen & Hamilton.

Jaruzelski noted that those companies working with Microsoft on developing new products have been long aware of the legal backdrop.

``This is not some massive surprise. This is something that has been known and probably factored into the thinking of any partner,″ he said.

Andrew Harding, an exhibitor for Unisys at the Microsoft pavilion, said the court decision ``won’t affect us that much″ and that everyone in the industry is pretty much sticking with Windows.

Unisys, a leading producer of business systems for corporations, was demonstrating one of its top-end mainframe computers, running the industrial-strength Windows 2000 Data Center operating system that is due for release in September.

Harding said Windows 2000 Data Center has certain advantages in price and function that customers want and said Unisys has no plans to drop it.

For investors, Wednesday’s ruling ``is not even a factor. If I was a product buyer, I know my supply is going to be unaffected for the near future,″ said Michael Cohen, co-manager of a mutual fund called Alpha Analytics Digital Future Fund.

Cohen was checking out Microsoft’s latest media-playing software to compare it with a rival product by a company in which his fund has invested but which he would not name.

``Our fund is not (invested) in Microsoft, but I do believe the stock is a good value at the price they’re at,″ he said.

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