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March 23, 2004 7:26 AM

Microsoft Senior VP Sounds Off on EU



ORLANDO — Some executives might mince words when the legal fate of their company in a publicized antitrust trial is hanging in the balance. But not Doug Burgum, the senior vice president in charge of the Microsoft Business Solutions (MBS) unit of Microsoft.

At the annual MBS customer conference here on Monday, Burgum gave press and analysts an earful regarding his views of the EU antitrust case against Microsoft in which a decision is expected on Wednesday.

According to a variety of press accounts, Microsoft is likely to be fined $613 million for abusing its monopoly power. The EU also is expected to rule that Microsoft must share more Windows code with rival server-software vendors, as well as to require the company to offer two different versions of Windows to European PC makers: One with Media Player bundled in, and the other with it stripped out. Microsoft is expected to appeal the ruling immediately.

"The same companies fueling the EU are the ones who fueled the DOJ (U.S. Department of Justice)," in its antitrust case against Microsoft, Burgum told press and analysts at a question-and-answer session on Monday evening. "Our competitors figured out they could use legal action before we did."

"We're playing in a regulated capitalism business," Burgum continued. But he noted that insuring there is no "anti-competitive behavior doesn't mean there has to be no competition."

Burgum's account of last week's breakdown of settlement talks between the EU and Microsoft echoed those outlined in published reports. He said the stumbling block was Longhorn, Microsoft's next version of Windows, and to what extent Microsoft would be allowed to integrate new technologies into the base operating system.

"They (the EU commission) wanted a precedent beyond the filed case," Burgum asserted. "(Microsoft Chairman) Bill (Gates) and (Microsoft CEO) Steve (Ballmer) didn't have a choice. It's not about ego. It's about shareholders expecting us to innovate over time.

"We're a global company. We can't agree to something that would limit our ability to innovate in Europe," Burgum added.


Burgum said the EU's decision to clamp down on Microsoft's business practices was more about the EU's desire "to demonstrate they have clout, they have teeth," than anything else.

"Microsoft wants to play by the rules, but we don't want a set of rules that would limit our ability to innovate going forward," Burgum said.

Burgum answered a variety of other press and analysts questions during the Q&A session. Attendees asked about Microsoft's intentions to become more of a player in specific vertical software segments. Burgum responded that while the ERP/supply-chain management market will "become more vertical by nature" over the next five years, Microsoft will leave most of the customization work to its integrator and independent software vendor (ISV) partners.

"We also could acquire some base functionality that would enable lots of other verticals," he said, providing another technology layer atop Windows that could "up-level" the infrastructure platform offered to ISVs, Burgum said.

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Comments (3)

Jim Lynch :

Very interesting...

edgeben :

Article: "We're playing in a regulated capitalism business," Burgum continued. But he noted that insuring there is no "anti-competitive behavior doesn't mean there has to be no competition."

Well, obviously, Microsoft thinks there has to be no competition for it to be competitive.


Article: "Burgum said the EU's decision to clamp down on Microsoft's business practices was more about the EU's desire "to demonstrate they have clout, they have teeth," than anything else."

And nothing to do with the fact that the DOJ proved that Microsoft had acted illegally in this country...?

Article: "Microsoft wants to play by the rules, but we don't want a set of rules that would limit our ability to innovate going forward," Burgum said.

Which, when interpreted means, "Microsoft wants to play by the rules, as long as we get to write the rules." As they did in the DOJ settlement. With which they still have difficulty complying.

ordaj :

A company with a $50 billion war chest, 90%+ market share on the desktop, 80-90% margins on its flagship products, and a history of using this kind of leverage against other companies (both competitor and "partner") has no credibility when discussing fair marketplaces. These statistics alone highlight their monopoly position and, yet, there seems to be no remedy.

How many companies, technologies, and products have been stifled due to their business tactics?

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