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Commentary: Microsoft gets off easy

The settlement lets the software giant get out of more than 100 lawsuits in one fell swoop without any admission of wrongdoing.

By David Smith and Michael Silver, Gartner Analysts

The technology donation to U.S. schools by which Microsoft could settle most of its civil antitrust-related lawsuits would hurt Apple Computer in the education market but leave a "business as usual" situation for Microsoft customers.

A creative idea, this settlement represents

See news story:
Legal dates dot Microsoft's calendar
a win for many, including Microsoft and recipient school systems. The only exceptions will be Apple, whose share of the education market will likely be negatively affected, and the original plaintiffs, which will not likely miss the estimated $10 each they may have received.

The settlement enables Microsoft to get out of more than 100 lawsuits in one fell swoop without any admission of wrongdoing. In addition, giving schools PCs, software, training and technical support creates positive public relations for Microsoft, and in so doing, Microsoft gains an even larger installed base than it has.

Penalty could lead to opportunity because Microsoft stands to increase its presence in schools to take a bite out of rival Apple's share in the public school market. Although some provisions of the deal provide for Microsoft software on Apple computers, the end result will serve to increase Microsoft's share and influence in the education market.

Microsoft continues with its string of legal victories. Once again, the company has escaped any real penalty. This time, it has actually managed to create a beneficial situation for many out of the whole deal. The actual cost to Microsoft will be much less than $1 billion as the incremental cost of software that has been written is low. The machines to be provided are primarily refurbished ones. Future legal costs will likely be reduced as a result of the settlement.

Additional public relations opportunities will abound. A new generation of future American workers will receive greater exposure to Microsoft products and technologies, which will benefit Microsoft for many years to come. And most importantly for Microsoft, this is one more step toward putting its antitrust issues behind it. In Gartner's view, this settlement will likely have no impact on businesses' strategies, other than potential recipients of the Microsoft donation.

(For a related commentary on the proposal for settling the U.S. government's antitrust case against Microsoft, see Gartner.com.)

Entire contents, Copyright © 2001 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.