Week in review: Microsoft in the crosshairs

Microsoft feels heat from the European community and software companies, and Intel makes a power play. Also: Space fight takes flight.

Microsoft found itself the popular target this week, with antitrust woes returning and new software battles emerging.

A European court dealt a severe blow to Microsoft's competitive ambitions in Europe Monday by siding with regulators in an antitrust case against the company. In its ruling, the Court of First Instance upheld European Commission claims that Microsoft abused its dominant position in the operating system market. Microsoft's allies and competitors have been closely following the case since the Commission imposed antitrust sanctions against the company in early 2004.

The court's decision is expected to have far-reaching implications for consumers, computer makers, Microsoft competitors and, perhaps most pointedly, the Commission's ability to regulate technology companies on antitrust matters, legal experts and industry observers say.

Neelie Kroes, the EC's Competition Commissioner, said that should Microsoft comply with the Commission's order, she expects to see a "significant drop" in Microsoft's overwhelming market share.

And while she gave no estimate as to how steep she expects that drop to be, Kroes noted that it would likely be more than a few percentage points as more competitors enter the market.

"These court findings are just the justification EU has now to protect its local technology companies against any international competition through law, instead of quality and innovation, the same way they do with agricultural products, chemicals, etc.," wrote one reader the CNET News.com TalkBack forum. "The US companies that sided with EU this time for greed will soon realize that you sometimes should think twice before making your wish..."

On the software competition front, Microsoft was on the receiving end of a couple of Office salvos.

After years of watching Microsoft rake in billions of dollars from its desktop software franchise, its competitors are pouncing.

IBM on Tuesday announced the release of Lotus Symphony, a suite of free desktop applications based on the OpenOffice.org open-source product.

Separately, Yahoo said that it paid $350 million to acquire Zimbra, a start-up that developed a Web-based e-mail and collaboration package comparable with Microsoft Exchange and Outlook.

Meanwhile, Google introduced Google Presentations, an online version of Microsoft's PowerPoint presentation application that complements Google's Web-hosted document editor and spreadsheet.

The flurry of investment in productivity software points to technology and business changes in the IT industry that are making Microsoft's cash cow vulnerable to alternatives, particularly among small businesses and consumers.

Intel's power play
With the next two generations of Intel's chips set in place, the company is looking forward to a low-power future, Intel CEO Paul Otellini said in his keynote address kicking off the Intel Developer Forum in San Francisco. Intel will launch the server and high-end desktop versions of its Penryn generation of chips on November 12, in line with previous reports expecting those chips before the Thanksgiving holiday. And Intel has also completed the design for Nehalem, a more radical overhaul of the company's chip blueprints.

Pat Gelsinger, general manager of Intel's Digital Enterprise Group, demonstrated a Nehalem-based system at the Intel Developer Forum here that he said will bring major performance improvements for the company's x86 processor line. The processor family itself is due to arrive in 2008.

The Nehalem demonstration featured a system with two quad-core processors; each processing core can handle two independent instruction sequences called threads, and the demo showed all 16 threads at work on various tasks. The processor was the very first incarnation of Nehalem--the "A0" version--built for the first time three weeks ago, Gelsinger said.

Intel also detailed an effort called LessWatts.org, a combination of open-source software and helpful hints to reduce power consumption of Linux servers, PCs and gadgets. Renee James, vice president and general manager of Intel's Software and Solutions Group, said the effort is geared toward technically sophisticated folks from programmers to system administrators. It gathers together a number of Intel projects, such as the PowerTop utility for finding which software is pestering the processor and preventing it from dozing in low-power states.

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