Microsoft News Tracker

European Competition Commissioner Neelie Kroes, fresh off her antitrust victory over Microsoft in the European Court of First Instance, has launched two new investigations into anticompetitive behavior by Microsoft:

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Everyone enjoys a good strategy presentation, so I recommend for your delectation the “Sun Microsystems New Corporate Strategy” slide revealed by Fake Steve Jobs to explain this week’s announcement that Sun is now a Windows Server OEM. Similarly revealing is the note FSJ supposedly received from Jonathan Schwartz describing the double secret plan involving IBM that is behind it all.

I guess snowballs are now safe in Hell. Yesterday, Microsoft and Sun Microsystems announced that Sun is now a Windows Server OEM for their x64 systems with Windows Server 2003 R2 to be available preinstalled within 90 days. It’s no surprise that Wintel commoditization is hitting the server market and squeezing the proprietary vendors - the real question is why Sun chose this point in time to embrace Wintel. Peter Burrows at Business Week offers some theories, but the only one that strikes a chord with me is that Sun views it as an opportunity to spread their hardware fixed costs over bigger volume with perhaps a bit of comfort for customers that buying from Sun doesn’t lock them into an evolutionary dead end.

Anyhow, according to the PR, it is all an expansion of the Microsoft-Sun settlement/alliance announced in April 2004 and included these other talking points:

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Sun’s JavaFX to take on AJAX, Silverlight in the Rich Internet Application (RIA) competition. I thought the days of slow, cheesy looking Java client apps were thankfully past, but I guess not. Hearing that “JavaFX Script leverages 2D graphics APIs in the Swing GUI toolkit” merely reminds me how awful Swing applications actually were. We’ll see if Sun can find a pony here with a scripting variant of Java, but I doubt it. While they were at it, Sun mostly open sourced Java.

Internet Explorer Developer Toolbar v1 released. I’ve long used something similar with FireFox, but one was really needed for IE.

SQL Server ‘Katmai’ Lacks Anticipated WinFS Features. Why spoil a perfect record? Related: David Boschmann explains Microsoft database projects Jasper and Astoria.

Microsoft publicly betas Tahiti, renamed SharedView. It’s a screen sharing program which up to 15 people can use for collaboration. There’s still no hint as to where it fits in the Microsoft galaxy of products although the original rumor was as part of Office Live.

Symantec attacks Microsoft’s Forefront Client Security. The fact that Forefront Client Security (for businesses) is using the same engine as the troubled OneCare consumer product leads to predictable snarking.

Microsoft signs Web video deals:

While it’s tempting to label the shows advertorials and leave it at that, Ben Silverman, Reveille’s chief executive, said he’s tried to find more elegant ways to incorporate products and entertainment.

I think Ron Popeil beat them to it.

Microsoft must answer racketeering claims over Best Buy deal.

Xbox Spring update released including Windows Live Messenger.

PS3 to ‘Win’ Console War Because of Blu-ray according to Wedbush Morgan Securities analyst.

Mac share of US Web surfers doubles in 8 months - it’s up to 6%

When the first reports surfaced last week that a number of big name IT companies (including Microsoft) had participated in widespread kickbacks on US government contracts, it wasn’t clear to me exactly how Microsoft was allegedly involved. Today, the details are a little clearer in Lorraine Woellert’s report at Business Week. First the big picture:

With some big players already named in lawsuits alleging a widespread kickback scheme, the information technology industry will see further scrutiny as federal prosecutors pursue additional charges in coming weeks. Last week, the Justice Dept. filed civil charges against Hewlett-Packard (HPQ), Sun Microsystems (SUNW), Accenture (ACN), and Accenture subsidiary Proquire as part of a two-year investigation involving potentially billions of dollars in government procurement projects.

The Justice Dept. unsealed complaints Apr. 19 in U.S. District Court for the Eastern District of Arkansas in Little Rock, charging the four companies with fraud and conspiracy in their attempts to win lucrative government contracts. Prosecutors also made public six whistleblower lawsuits that had been filed under seal in September, 2004, by former Accenture employee Norman Rille and Neal Roberts, a onetime partner with Deloitte & Touche who has investigated alliances between technology vendors.

The lawsuits accuse at least a dozen technology vendors of operating rebate and commission programs, referral systems, and strategic alliances that they kept secret from the government agencies that bought their systems or followed their advice. The practice has been going on in some cases for a decade, the lawsuits claim. The Justice Dept. is seeking treble damages plus civil penalties.

There are more details in the article, but the problem is with the payment of referral fees which aren’t uncommon or illegal in many business situations, but have to be disclosed on government contracts. The way the fees were so visibly institutionalized at these companies indicates to me at least that they didn’t understand what trouble they were getting themselves into with the government. Where’s a lawyer when you need one?

As for Microsoft:

According to court documents, the original six civil cases Rille and Roberts filed will proceed against Cisco Systems (CSCO), Electronic Data Systems (EDS), SAP (SAP), Lockheed Martin (LMT), Oracle (ORCL), American Management Systems, CACI International (CAI), SeeBeyond Technology, and Dell (DELL). At least five other defendants remain cloaked under court seal, including one identified in court documents as a wholly owned subsidiary of IBM (IBM).

Boeing (BA), Raytheon (RTN), Microsoft (MSFT), SAIC (SAI), and Exostar were named in the original complaints, but the court, at the urging of prosecutors, dismissed them from the cases last week. The lawsuits themselves describe a network of relationships that reads like a Who’s Who of the nation’s biggest IT companies. Based on documents and information he received while a senior manager at Accenture, Rille claims in one of the original lawsuits, “all the major systems-integration consultants and technology vendors were and are engaged in the same kickback scheme and associated conspiracies.”

So Microsoft isn’t on the hook right now, but they and a number of other big names still seem to have a significant risk. I wonder if it will rate a footnote in tomorrow’s quarterly report?