Microsoft Corporation

Redmond, Washington

Major Moves in 2000

Releases SQL Server 2000 Revamps Analysis, Meta Data, and other key BI Services Introduces .Net initiative Releases Exchange 2000 Enterprise Server

www.microsoft.com

Past, present, and future continue to collide in the Microsoft kingdom. The past? Well, only the post-election finale of the U.S. presidential race could top Judge Jackson's ruling as 2000's most historic event. As of this writing, Microsoft is desperately trying to extend its appeals process and forestall the company's ordered breakup. IBM's CEO Lou Gerstner has pronounced the PC "dead": Microsoft disagrees, of course. However, from both business and technical perspectives, the fabled PC era in which Microsoft ruled so aggressively is over.

Now, the chickens are coming home to roost. Microsoft accomplished a great deal in its software business in 2000, but the antitrust case and its potential outcome have to be major distractions. The case helped drive Microsoft's stock down - not great for investors, but even worse for a company that has used employee stock options to insure loyalty. According to the Wall Street Journal (October 6, 2000), the weakening stock price is upsetting how Microsoft has been able to finance, through derivatives, the rich employee stock options. Given its wealth, the company is obviously in no danger, but the internal stress must be significant. Microsoft has had to withstand an inevitable brain drain; 2000 saw the launch of a number of VC-backed startups led by whole teams of former Microsoft employees.

Window on the .Net Future

Of course, it ain't all bad to dominate the world's software for PC desktops and servers. CEO Steve Ballmer's task is to keep the profit engines running in Microsoft's "legacy" businesses while chairman Bill Gates lays out the future. In June, Microsoft announced .Net, which put the company on a course toward platform-independent software and services. Database software, namely the SQL Server 2000 with its deepening commitment to BI, is starting to look like the centerpiece of Microsoft's future; could it be that as Oracle tries to become the "Microsoft of the Internet," Microsoft is simply trying to become more like Oracle?

The Microsoft .Net Framework attempts to clean up the PC era's software development mess and swing the Windows development community in the direction of creating Internet-based services. In traditional fashion, Microsoft has identified XML as the data-driven world's linchpin and has smothered it with loving kisses and a bouquet of technology, in particular BizTalk Server. By changing the game, Microsoft's .Net XML devotion could neutralize the impact of Java on software development. And if its XML religion isn't enough, Microsoft can offer its brand new C# development language, which gives C/C++ developers an alternative growth path, particularly for server-side applications that will exploit coming 64-bit processors from Intel and other chip makers.

Will Microsoft be broken up? By the time the case is resolved, Microsoft's dependence on Windows for its livelihood could be a thing of the past.