Explorer's changing place on the desktop

In a case of marketplace realities colliding with marketing efforts and legal posturing, Microsoft has been permitting PC makers and system integrators in certain circumstances to delete the Explorer icon when big customers say they want it gone.

Dell, for instance, recently admitted it has been removing the icon on request from customers while other PC makers are stating that their large customers are receiving computers without the Explorer icon as well.

While deleting the Explorer icon is technically simple, the practice has larger ramifications. For months, Microsoft has maintained that removing the browser is akin to giving a Windows PC a lobotomy. These PC makers and integrators are technically only removing the icon, not the browser. But the icon is generally the pathway to use. In other words, for many, no icon means no browser.

We're just trying to help users, Microsoft has argued. CEO Bill Gates has said that bundling IE with Windows reduces "the number of steps that the user has to learn." And during the antitrust trial, a Microsoft executive argued that severing the browser from the OS "renders various features of the operating system inoperable." (See related story.)

"Microsoft has argued before Judge Jackson that removal of the IE icon by OEMs would adversely affect the overall look and feel of Windows," noted Rich Gray, an antitrust attorney at Bergeson, Eliopoulos, Grady & Gray who is not involved in the case. "The Justice Department countered by asserting that the impact would be minimal and would be similar to other changes in the look and feel of Windows that Microsoft does permit. What Dell and the other large-count resellers are allowed to do would support the government's argument."

In true Microsoft fashion, the process of how all these deals work is technically complex, yet legally elegant.

PC makers have what is called an "end-user" license with Microsoft. The license agreement allows PC makers to load Windows 95, 98, or NT onto their computers. The end-user license specifically prohibits these manufacturers from deleting the Explorer icon from the desktop.

Enter Microsoft's large account reseller program. Large account resellers are companies such as Unisys and Inacom, huge multinational companies that exist to service and install fleets of computers for multinational organizations. Dell, because it sells its PCs directly, is both an end-user licensee and a large account reseller. Compaq Computer and other traditional PC makers who are moving toward direct sales will likely follow suit.

Large account resellers are not required to leave the icon on the desktop. This allows Dell and the system integrators to ship computers with whatever icons their customers want on the desktop, according to Microsoft spokesperson Greg Shaw. Software licenses sold directly to large customers under its Select licensing program also don't carry this restriction.

Legally, therefore, Microsoft is not permitting computer makers to desecrate the Windows experience. Third parties down the commercial chain might be doing that. However, it's not as if Microsoft is in the dark. Microsoft has entire departments dedicated to serving its large account resellers and large customers.

For at least two years, Dell, a staunch Microsoft supporter, has been deleting the icon in select instances on request of customers. Dell's program, called Dell Plus, gives large corporate accounts the ability to custom install software on Dell PCs, as well as the ability to remove the Internet Explorer icon. Other computer makers such as Gateway have similar programs.

"Customers are expecting a browser. In rare cases, they specify a particular browser, but most do not express a preference for a type of browser," said T.R. Reid, a Dell spokesperson.

"A very small number of customers have asked us to delete the Internet Explorer icon," he said, noting that the underlying software is not removed in the process.

Microsoft has taken a strong stand that the icon to Internet Explorer cannot be removed from the Windows desktop, claiming it alone had the right to remove it. The software giant went so far as to threaten to cancel Compaq's license if the icon was removed, according to evidence introduced in the trial. But the dispute with Compaq centered on the end-user license.

Shaw declined to specify how a company qualifies for a Select license, saying it was competitive information, but admitted there were many such arrangements.

Is the argument being undermined?
The ability to customize the desktop is still mostly available only to a small group of large corporate customers who specifically request and pay PC makers to do so. However, the fact that Microsoft allows companies to do so at all potentially undermines the company's argument.

In its case, the government has argued that Microsoft incorporated its Internet Explorer browser into Windows to effectively eliminate competition from Netscape, as well as a potential threat to the dominance of the Windows operating system.

Microsoft, through testimony provided by executives, has argued that altering Windows--even something as simple as removing a desktop icon--violates the company's rights to deliver a product the way it was created. And while Microsoft holds that end users are free to do whatever they like to the desktop once they receive it intact, Senior Vice President Joachim Kempin testified at the trial that letting companies change any aspect of the Windows operating system would be an act akin to "butchering" the product. (See related story.)

So far, the government has not yet emphasized this counter argument to Microsoft's contentions in the trial. But if Microsoft pushes the claim that the appearance of Windows is subject first to copyright law and not antitrust law, the government appears to have a counter-punch ready.

News.com's Michael Kanellos contributed to this report.