A proposal by the U.S. government to split software giant Microsoft
Corp. (MSFT.O) into two companies could ultimately be a boon to the
upstart Linux operating system, industry executives said after hearing
“What you get is more choice, more competition and that’s good,” said
Mitchell Kertzman, President and Chief Executive of Liberate
Technologies Inc. (LBRT.O), a maker of operating system software for
set-top boxes and video game consoles based in San Carlos, California.
“Consumers will benefit just as telecommunications consumers did after
the break-up of AT&T,” Kertzman said.
Earlier Friday, the U.S. government and 17 of the 19 states that sued
Microsoft made their much-anticipated proposal to the federal judge in
charge of one of the biggest antitrust cases in U.S. history.
As expected, the government proposed to separate Microsoft’s dominant
Windows operating system business from its software applications
business, which includes widely used products like its Word processing
system, Excel spreadsheet and control of its Internet Explorer Web
It was the stiffest penalty sought against a major American corporation
since the 1982 break-up of AT&T Corp. (T.N) into regional “Baby Bells.”
Many companies developing products around the renegade Linux operating
system said a possible break-up of the software giant would be a boon to
Linux, which has already been making inroads against Microsoft’s Windows
NT software in network servers running Web sites and e-mail servers.
Where Linux has not made much headway is on the desktop, where it has
been seen as too unwieldy to use, and because of a lack of popular
applications such as Word running on Linux.
“Linux is on track to beat Microsoft regardless of what the Justice
Department does,” said Larry Augustin, Chief Executive of VA Linux
Systems Inc. (LNUX.O), a developer of systems and services optimized for
Linux in Sunnyvale, California.
“I think that separating the company into an applications piece and an
operating systems piece though, could significantly accelerate that,
particularly since the applications piece of the company would have a
strong economic incentive to port Office to Linux,” Augustin said. “If
Microsoft Office ran on Linux immediately we would see Linux with a
10-15 % share of the desktop operating system market,” he added.
Linux currently has an estimated four percent share of the desktop
operating systems market, which is primarily dominated by Microsoft’s
“There is no guarantee they will do that (develop applications for
Linux),” said Bob Young, Chairman of Red Hat Inc. (RHAT.O) of Research
Triangle Park, N.C., and the largest distributor of Linux. “But they
will be subject to the demands of their customers and they would be
foolish to ignore those customer requests.”
Another Linux Company Executive, David Sifry, co-founder of Linuxcare
Inc. in San Francisco, said that he thought the break-up proposal was
“relatively tame” and suggested that Microsoft be split up into four
parts, operating system, applications, Internet properties and developer
And while Silicon Valley is typically seen as a bastion of
Microsoft-bashers, not everyone agrees with the notion of government
interference or the proposed break-up measures.
“I have mixed feelings,” said Promod Haque, a General Partner with
Norwest Venture Partners, a venture capital firm in Palo Alto.
“Microsoft has been tough to deal with but what concerns me here is that
this remedy is pretty extreme, pretty radical. Overall, I don’t like the
government interfering. I do think Microsoft did break rules and should
be penalized, I just get the sense that this is far too extreme.”