Microsoft News Tracker

Jessica Mintz for the AP reports on the big punch landed by Alcatel today in the long running patent fight with occasional partner, Microsoft:

Microsoft Corp. must pay $1.5 billion in damages to telecommunications equipment maker Alcatel-Lucent SA for violating two patents related to digital music, a federal jury ruled Thursday.

The Redmond, Wash.-based software company said the patents in question govern the conversion of audio into the digital MP3 file format on personal computers.

In 2003, Lucent Technologies Inc., which last year was acquired by Alcatel, filed 15 patent claims against Gateway Inc. and Dell Inc. In April 2003, Microsoft added itself to the list of defendants, saying the patents were closely tied to its Windows operating system. The PC makers are still defendants.

Microsoft said a judge threw out two of the 2003 patent claims, and scheduled six separate trials to consider the remaining disputes. The case that was just decided went to trial in San Diego on Jan. 29.

Microsoft was undaunted:

In a statement, Microsoft Deputy General Counsel Tom Burt said the software titan believes that the verdict “is completely unsupported by the law or the facts.”

“We will seek relief from the trial court, and if necessary, appeal,” Burt said.

Microsoft also got in a jab of its own earlier in the week when it was reported that they filed a new patent lawsuit and international trade complaint against Alcatel-Lucent:

Microsoft, the world’s biggest software maker, filed a complaint Feb. 16 in federal court in Wilmington, Delaware, and on the same day filed a trade complaint with the U.S. International Trade Commission in Washington. Both accuse Alcatel-Lucent, the world’s biggest maker of telecommunications equipment, of infringing four patents and seek a halt to sales.

“We are seeking to stop the future importation of unlicensed Alcatel-Lucent products into the United States until Alcatel-Lucent has taken an appropriate license,” Guy Esnouf, a Microsoft spokesman, said in a statement.
…
The Delaware lawsuit and trade commission complaint target Alcatel-Lucent’s OmniTouch software and related computer servers that let users get voice mail, e-mail and faxes through one system. Microsoft claims Alcatel-Lucent is using Microsoft’s patented technology to compete with products such as its Communicator software.
…
Microsoft could be able to block imports of Lucent products from the trade commission case and could get cash compensation from the civil suit.

There were already earlier communications patent lawsuits filed by the parties ([1], [2]) as well as one over the Xbox.

After months of speculation, Google is expected to announce today that they have rolled up their collection of Web office suite applications and are offering the package as a hosted service to businesses:

Having won over millions of consumers with its online search and productivity tools, Google is now looking to displace Microsoft as the desktop application provider of choice in corporate America by offering a range of low-cost, zero maintenance software that office workers can access through the Internet.

Google Apps Premier Edition, to be unveiled Thursday, features online e-mail, calendaring, messaging and talk applications as well as a word processor and a spreadsheet. The launch follows Google’s introduction of a similar suite aimed at consumers last August. The new Premier Edition, however, offers enhancements aimed squarely at corporate environments.
…
Specifically, Google Apps Premier Edition features application programming interfaces that businesses can use to integrate it with their own applications. Ten Gigabytes (10GB) of storage for ad-free Gmail is offered standard, meaning workers can spend more time working and less time cleaning out their in-boxes. And Google is offering service level agreements that promise 99.9% uptime and 24×7 tech support.

But possibly the most compelling aspect of Google Apps — at least from the standpoint of potential customers considering a switch from Microsoft products — is the price. Google is offering the whole package for just $50 per user, per year. Microsoft does not publish volume licensing prices for the Enterprise Edition of Office 2007, its latest entry in the office productivity market. The price of a standalone copy of the Professional Edition is $499.

This was anticipated ever since Google took the first steps in that direction last year, but as might be expected when one of Microsoft’s leading cash cows is threatened, the pundits are out in force. To net out a lot of the commentary (and my observations from the past), online offerings in general and Google’s in particular are not as full featured as Microsoft Office but may just be “good enough” for many users and also have the advantage of simplified file sharing. Google also currently lacks a presentation package to match Microsoft’s PowerPoint.

Some perspective from Adam Lashinsky at Fortune:

Google’s tiny enterprise group already has been marketing a free version of the package to small businesses, and it claims 100,000 users. What’s new is an expanded version for $50 per account per year that includes telephone support and 10 gigabytes of storage capacity, compared with the 2 gigabytes that come for free with a Gmail web-based e-mail program.

Though Google is targeting small businesses - the kind whose IT departments don’t manage giant e-mail systems - it has signed up General Electric and Procter & Gamble for small trials.
…
Google’s enterprise ambitions are modest. It’s unlikely to dislodge more than a fraction of the 450 million users of Office. Even a rousing success would barely move the needle for Google. If all 100,000 of its current users signed up, for example, it’d mean an additional $5 million in annual revenue.
…
Still, that Google even cares to try to sell a product against Microsoft in its core area of expertise speaks to Google’s ambitions - as well as its yearning for revenue streams that go beyond advertising. According to Dave Girouard, the vice president for Google’s enterprise group, the productivity package will be profitable at $50 a year. Many corporations pay about $600 a year for employee e-mail, he says, and half the employees in the U.S. don’t even have an e-mail account.
…
None of that is any reason not to try, of course. When Google dramatically increased the storage capacity of Gmail its competitors were forced to follow suit. Whether or not its new package is successful, this could force a dramatic cost reduction in the expense of corporate e-mail programs.

And I’d add “reduction in the expense of corporate office suites in general,” which in the short term may be the biggest effect on Microsoft.

Update: It’s now been formally announced - Google Introduces New Business Version of Popular Hosted Applications.