WinInfo Daily UPDATE, March 17, 2004

Just a day before he was supposed to appear onstage in Las Vegas, Nevada, for a keynote address at the Microsoft Management Summit (MMS) 2004, Microsoft CEO Steve Ballmer abruptly canceled those plans.

Paul Thurrott

March 16, 2004

13 Min Read
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In the News

- Ballmer Cancels Plans, Holds Emergency Talks with EU

- Microsoft Hones Management Initiative with New Products

==== In the News ====

by Paul Thurrott, [email protected]

Ballmer Cancels Plans, Holds Emergency Talks with EU

Just a day before he was supposed to appear onstage in Las Vegas, Nevada, for a keynote address at the Microsoft Management Summit (MMS) 2004, Microsoft CEO Steve Ballmer abruptly canceled those plans. Instead, he flew to Brussels, Belgium, to enter into intense closed-door negotiations with European Union (EU) Competition Commissioner Mario Monti in a bid to reach a last-minute settlement in the company's antitrust case there. Separately, the EU said yesterday that it will announce its verdict against Microsoft on March 24--a week from today--barring any settlement.

Representatives of Microsoft and the EU confirmed the talks separately. "Yes, there's been a meeting today," an EU spokesperson said. "Discussions are ongoing. That's all I'll say." A Microsoft spokesperson noted that "discussions are ongoing. We are actively engaged with the Commission."

Sources close to the talks say that EU officials are using an unusual and potentially effective negotiation strategy: Rather than offering to drop requirements, the EU is asking Microsoft to make more concessions in its settlement than the company would be forced to accept in a court ruling. This strategy stands in sharp contrast to the negotiation techniques the US Department of Justice (DOJ) employed when it essentially handed Microsoft a huge victory during its antitrust settlement, even though the software giant was thoroughly defeated in court and found to be an abusive monopolist. In one example of the EU's strategy that "The Wall Street Journal" cited, the EU's draft ruling stipulates that potential changes to Windows apply only to European markets but, for the settlement to be approved, the EU is requiring that Microsoft make the changes worldwide.

Tactics notwithstanding, analysts who are covering the high-stakes European antitrust battle have concluded that Ballmer's arrival in Brussels signals that the settlement talks are reaching an end. He'll either close the deal now or walk away from the table and force his company to face several more years of often-embarrassing and potentially damaging legal battles.

The biggest EU concern is still Windows Media Player (WMP), which Microsoft has been bundling into the Windows OS since the early 1990s. In recent years, however, WMP has become more capable as consumer needs for digital media have risen dramatically, and now several competitors believe that WMP's integration with the OS gives the company an unfair advantage. The EU wants Microsoft to offer a stripped-down version of Windows that doesn't include the media player.

Also on the plate is server interoperability. The EU charges that Microsoft doesn't offer competitors enough technical information to let them write software applications, server software, and services that work well with Microsoft server products. By withholding this crucial information, the EU says, Microsoft is in the process of securing another dominant market that will leave competitors unfairly disadvantaged.

Ballmer isn't the first Fortune 100 CEO to appear before the EU's antitrust officers. In 2001, General Electric (GE) CEO John Welch Jr. unsuccessfully attempted to convince the EU that his company's proposed takeover of Honeywell was in the public interest. The EU ruled that the companies couldn't merge because doing so would create a single company with too much market power.

Microsoft Hones Management Initiative with New Products

Yesterday, at the Microsoft Management Summit (MMS) 2004 in Las Vegas, Nevada, Microsoft announced its road map for managing and securing enterprise systems through its Dynamic Systems Initiative (DSI). The initiative will add manageability technology to the company's products over time and help enterprises manage applications throughout their life cycles. Bob Muglia, senior vice president of the Windows Server Division, delivered a keynote address yesterday that highlighted the initiative and announced several new products.

"This is an issue where the industry has overpromised and underdelivered while our enterprise customers continue to feel the pain of managing their systems," Muglia said during his address. "Our approach with DSI is to help customers get every dollar out of their IT investments by making software more manageable from the ground up." New Microsoft applications, he said, will include manageability technology from their inception, making them more easily managed.

Muglia also announced several new products, including an exciting new version of Microsoft Software Update Services (SUS), the company's free software-deployment tool for small and medium-sized businesses, which will be renamed Windows Update Services. WUS will include new automation and control features and will manage updates for Microsoft SQL Server, Exchange Server, Office 2003, and Office XP, in addition to Windows and Windows Server. The product is scheduled for release late in 2004, but a widely distributed beta version will ship this summer, Microsoft representatives told me.

Other new products announced at the show include Microsoft Operations Manager (MOM) 2005, the next version of the company's management server, which will provide business-activity monitoring and Web services-management functionality; MOM 2005 Express, a new low-end version of MOM for smaller companies; System Center 2005, an integrated management suite that will combine Microsoft Systems Management Server (SMS) 2004, MOM 2005, and a new reporting engine; and the Device Management Feature Pack, a new SMS 2004 feature pack that will help SMS customers manage and deploy Windows CE-based devices, including Pocket PCs and Windows Mobile-based Smartphones.

Most of these new products are currently in beta or will enter beta soon. Microsoft hopes to ship all of them by the end of 2004.

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==== This Issue Sponsored By ====

Free eBook: Expert's Guide for Exchange 2003 http://www.aelita.com/031504wininfo

==== Sponsor: Aelita Software ====

Moving to Exchange 2003? Avoid getting lost in your Active Directory forest(s) with The Expert's Guide for Exchange 2003. It's a roadmap for how to prepare for, move to, and support Exchange Server 2003. This FREE eBook will tell you the requirements you may not know, why you may need multiple directories, and how to allow access while maintaining security. The Expert's Guide for Exchange 2003 will educate messaging administrators and systems managers on how to best approach the migration and overall management of an Exchange 2003 environment. The book will focus on core issues such as configuration management, accounting, and monitoring performance with an eye toward migration, consolidation, security and management. Get your copy of the expert's guide today! http://www.aelita.com/031504wininfo

====================

In the News - Ballmer Cancels Plans, Holds Emergency Talks with EU - Microsoft Hones Management Initiative with New Products

==== In the News ==== by Paul Thurrott, [email protected]

Ballmer Cancels Plans, Holds Emergency Talks with EU Just a day before he was supposed to appear onstage in Las Vegas, Nevada, for a keynote address at the Microsoft Management Summit (MMS) 2004, Microsoft CEO Steve Ballmer abruptly canceled those plans. Instead, he flew to Brussels, Belgium, to enter into intense closed-door negotiations with European Union (EU) Competition Commissioner Mario Monti in a bid to reach a last-minute settlement in the company's antitrust case there. Separately, the EU said yesterday that it will announce its verdict against Microsoft on March 24--a week from today--barring any settlement. Representatives of Microsoft and the EU confirmed the talks separately. "Yes, there's been a meeting today," an EU spokesperson said. "Discussions are ongoing. That's all I'll say." A Microsoft spokesperson noted that "discussions are ongoing. We are actively engaged with the Commission." Sources close to the talks say that EU officials are using an unusual and potentially effective negotiation strategy: Rather than offering to drop requirements, the EU is asking Microsoft to make more concessions in its settlement than the company would be forced to accept in a court ruling. This strategy stands in sharp contrast to the negotiation techniques the US Department of Justice (DOJ) employed when it essentially handed Microsoft a huge victory during its antitrust settlement, even though the software giant was thoroughly defeated in court and found to be an abusive monopolist. In one example of the EU's strategy that "The Wall Street Journal" cited, the EU's draft ruling stipulates that potential changes to Windows apply only to European markets but, for the settlement to be approved, the EU is requiring that Microsoft make the changes worldwide. Tactics notwithstanding, analysts who are covering the high-stakes European antitrust battle have concluded that Ballmer's arrival in Brussels signals that the settlement talks are reaching an end. He'll either close the deal now or walk away from the table and force his company to face several more years of often-embarrassing and potentially damaging legal battles. The biggest EU concern is still Windows Media Player (WMP), which Microsoft has been bundling into the Windows OS since the early 1990s. In recent years, however, WMP has become more capable as consumer needs for digital media have risen dramatically, and now several competitors believe that WMP's integration with the OS gives the company an unfair advantage. The EU wants Microsoft to offer a stripped-down version of Windows that doesn't include the media player. Also on the plate is server interoperability. The EU charges that Microsoft doesn't offer competitors enough technical information to let them write software applications, server software, and services that work well with Microsoft server products. By withholding this crucial information, the EU says, Microsoft is in the process of securing another dominant market that will leave competitors unfairly disadvantaged. Ballmer isn't the first Fortune 100 CEO to appear before the EU's antitrust officers. In 2001, General Electric (GE) CEO John Welch Jr. unsuccessfully attempted to convince the EU that his company's proposed takeover of Honeywell was in the public interest. The EU ruled that the companies couldn't merge because doing so would create a single company with too much market power.

Microsoft Hones Management Initiative with New Products Yesterday, at the Microsoft Management Summit (MMS) 2004 in Las Vegas, Nevada, Microsoft announced its road map for managing and securing enterprise systems through its Dynamic Systems Initiative (DSI). The initiative will add manageability technology to the company's products over time and help enterprises manage applications throughout their life cycles. Bob Muglia, senior vice president of the Windows Server Division, delivered a keynote address yesterday that highlighted the initiative and announced several new products. "This is an issue where the industry has overpromised and underdelivered while our enterprise customers continue to feel the pain of managing their systems," Muglia said during his address. "Our approach with DSI is to help customers get every dollar out of their IT investments by making software more manageable from the ground up." New Microsoft applications, he said, will include manageability technology from their inception, making them more easily managed. Muglia also announced several new products, including an exciting new version of Microsoft Software Update Services (SUS), the company's free software-deployment tool for small and medium-sized businesses, which will be renamed Windows Update Services. WUS will include new automation and control features and will manage updates for Microsoft SQL Server, Exchange Server, Office 2003, and Office XP, in addition to Windows and Windows Server. The product is scheduled for release late in 2004, but a widely distributed beta version will ship this summer, Microsoft representatives told me. Other new products announced at the show include Microsoft Operations Manager (MOM) 2005, the next version of the company's management server, which will provide business-activity monitoring and Web services-management functionality; MOM 2005 Express, a new low-end version of MOM for smaller companies; System Center 2005, an integrated management suite that will combine Microsoft Systems Management Server (SMS) 2004, MOM 2005, and a new reporting engine; and the Device Management Feature Pack, a new SMS 2004 feature pack that will help SMS customers manage and deploy Windows CE-based devices, including Pocket PCs and Windows Mobile-based Smartphones. Most of these new products are currently in beta or will enter beta soon. Microsoft hopes to ship all of them by the end of 2004.

==== Announcement ==== (from Windows & .NET Magazine and its partners)

Sign Up for 2 New Web Seminars--Business Workflow Process and Authenticating Email to Stop Spam and Phishing Unmanaged companywide Access reports and spam issues can lead to security and performance problems, not to mention use up valuable resources. Learn how to consolidate your reports with a reporting service and find out how to stop spam and phishing to solve these important organizational issues. Register now! http://www.winnetmag.com/seminars

==== Events Central ==== (A complete Web and live events directory brought to you by Windows & .NET Magazine: http://www.winnetmag.com/events )

New Web Seminar--Realizing the Return on Active Directory Join Mark Minasi and Indy Chakrabarti for a free Web seminar and discover how to maximize the return on your Active Directory investments and cut the cost of security exposures with secure task delegation, centralized auditing, and Group Policy management. Register now and receive NetIQ's free "Securing Access to Active Directory--A Layered Security Approach" white paper. http://www.winnetmag.com/seminars/activedirectoryroi

==== Sponsored Link ====

Microsoft(TM) Enter the Microsoft Windows Server 2003 Challenge. Win BIG prizes. http://ad.doubleclick.net/clk;7509848;8214395;y?http://www.microsoft.com/windowsserver2003/challenge/default.mspx

About the Author

Paul Thurrott

Paul Thurrott is senior technical analyst for Windows IT Pro. He writes the SuperSite for Windows, a weekly editorial for Windows IT Pro UPDATE, and a daily Windows news and information newsletter called WinInfo Daily UPDATE.

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