Microsoft Strategy for World Wide Web Dominance

Microsoft Passport, Windows XP and .Net Platform (Hailstorm)

"If Microsoft's plan may be described as the building of Fortress Microsoft, Microsoft Passport - Microsoft's Web identity service - is the cornerstone of that plan," said an anti-Microsoft group, Project to Promote Competition and Innovation in the Digital Age, in a recent white paper called "Passport to Monopoly." "A monopoly in Web identity services will enable Microsoft to control the means by which users access distributed applications from the Internet."

Anti-Microsoft forces also are concerned about privacy and security issues related to Microsoft Passport. Such data as the user's name, e-mail, Zip code, birthday, occupation and credit card numbers are stored in Microsoft computer servers. But the company said that the system is tightly secured, the information is encrypted and the user controls the data.

People can sign up for Passport through a variety of Microsoft sites, such as its free Hotmail e-mail service, or through Microsoft partner sites. Or, the first time consumers connect to the Internet after buying a PC with Microsoft's new Windows XP, the operating system will guide them through an online registration form that asks them whether they want to sign up for a Passport account.

That, too, has raised the ire of critics, who assert that Windows XP will steer users to sign up for Passport, which in turn will lead users to Microsoft-affiliated Web sites and services. For example, when users sign up for Passport, they automatically are given accounts for Microsoft's Hotmail and MSN Messenger Service, its instant-messaging software.

Windows XP, meanwhile, comes with what company officials call "good plumbing," software code that works seamlessly with the XML language of Hailstorm. That, they say, will make it easier for developers to create software based on the Hailstorm platform that interacts with Windows XP.

"XP will be a delivery platform for the Hailstorm services," said Wendell Laidley, a San Francisco-based analyst at Credit Suisse First Boston Corp.

In addition, Windows XP comes with a new feature called "remote assistance capability," which allows users to get computer help by giving Microsoft or anyone else access to their PC from over the Internet.

Do not forget that Microsoft recently abandoned a controversial feature of Windows XP called "smart tags," which could have linked selected words in anyone Web sites' text to the sites and services of Microsoft and its affiliates without obtaining any permission for doing so from the content owners of the web site.

Microsoft's grand plans are matched by equally large obstacles, ranging from antitrust questions and new competition to the need for privacy, security and reliability of its services on the wide-open, public Internet. Last month, the Consumer Federation of America, Consumers Union, Media Access Project and U.S. Public Interest Research Group sent a letter to federal and state prosecutors, contending that Microsoft's strategy of embedding its Internet services into Windows XP repeats violations cited earlier by a federal appeals court.

Microsoft already controls basically all segments of the personal computer software industry. The company owns more than 90 percent of the PC desktop operating system market, more than 90 percent of the PC business applications market, and more than 85 percent of the Web browser market, according to estimates by major analysts.

"This whole thing is driven by the fact that Microsoft has hundreds of millions of Windows users, but Microsoft doesn't have a monthly billing relationship with those users".

If Microsoft placed a payment infrastructure like micropayments in the browser itself, then anyone of us would be able to build profitable Internet business online, by utilizing the e-commerce features built into the browser, and without worrying about what software we would needing to run on our servers.

Customers would be directly charged through their browsers. This would effectively kill off Netscape as Internet Explorer would be the only platform through which this could be accomplished. However, Microsoft does not care about killing Netscape off all together. Netscape being alive at 10% of the browser market is a good insurance policy against anti-trust trials, just as keeping Apple alive has well served the need to fend off monopolistic attacks on that side as well.

What instead Microsoft is trying to do is to design and deploy
Internet payments to reside on the back-end, as part of its so- called Hailstorm service. When somebody will be developing a new service for the Internet, they will be able to get paid if they have used Microsoft's .Net platform for development. Use any other software, and you won't have an easy way of getting money from your users.

This forces commercial players to face this hard to digest choice: Either we use Microsoft's .NET solution and we get a sustainable business model for our website or we decide to opt for ANY other solution (Linux, Apache, etc.) and we go out of business for lack of sustainable infrastructure to support our payment system and revenue stream.