Closed Vista?

Consider a car. The vast majority of its components""the tyres, gauges, windshield, alarm system, electrical system, etc""are not made by the car manufacturer. Once a vehicle is sold, it can be customised with components from the open market. A car, in fact, is a "plug-and-play" device although it is not touted as such. If auto manufacturers tried to obstruct component customisation, there would be howls of protest. Now consider a personal computer (PC), which is actually called a "plug-and-play" device. It may have no "maker" in that it may be assembled from parts made by many different firms. It would seem logical therefore that every element in a PC would be more easily replaceable than in a car. But that is not the case. The company that supplies the operating system (OS) retains enormous leverage in customisation/replacement decisions. The PC-owner's choices are constrained by the OS. Equally importantly, the OS-maker can destroy the markets of "component manufacturers" by denying access.

The analogy is inexact. Far more of the PC's "components" consist of application software. But the comparison is close enough to offer some understanding of the anti-trust and monopoly issues that arise with operating systems that come bundled with several sets of "OEM" applications. Another factor makes the analogy between cars and computers inexact. No auto maker holds monopoly marketshare and hence no auto maker has the leverage to deny choice. This is not the case with the OS market, where Microsoft (MS) owns a 90 per cent share.

The European Commission has had a running feud with the world's largest software company due to Microsoft's reluctance to share technical information that helps other software developers mesh their products with Windows' OS packages. The Commission levied a 497 million euro fine on the company in 2004, saying it deliberately tried to cripple rivals. In July 2006, the Commission levied another 280.5 million euro fine and threatened more penalties for failure to obey the 2004 order to share code. Microsoft is appealing both fines. But it is also trying to win brownie points through advance compliance on its long-awaited new OS, Vista.

The Vista Beta is out and the OS is scheduled for commercial launch in January 2007. The new OS comes bundled with in-house "Security Centres" and search programmes. Security firms such as Symantec and McAfee and search engine-giant Google have complained that Microsoft has not released the Application Programming Interfaces (APIs) that would allow them to integrate their products with Vista. In effect, this denies "component manufacturers" access to markets and it denies Vista users the ability to choose. In addition, hardware manufacturers have said that Vista's concept of a single transfer licence could cripple their sales volumes. In effect, Vista will refuse to function if more than one major hardware upgrade is done on a Vista PC. This is an anti-piracy measure but it massively raises the barrier on hardware upgrades. Microsoft has responded by saying that it will release APIs. It has gone even further by promising to open-source its Virtual Hard Disk Image technology, which will make it easier to install several OS-es simultaneously on Vista machines. But it will not give software developers full access to the OS' kernel. So integration of any third-party application could be tricky.

Can a leopard change its spots? The European Commission is non-committal. It will evaluate the situation after Vista is commercially released. If Microsoft does not satisfy its anti-trust fears, Vista could be denied access to the second-largest market in the world.