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By Richard Morochove
First published March 11, 1999
SAN FRANCISCO - Wintel, the unofficial alliance of Microsoft and Intel, isn't as tight as it used to be. While the two partners still closely co-operate in new personal computer developments, they will go separate ways when it suits their interests. Two good examples of divergence are the partners' recently-announced electronic commerce strategies and their responses to anti-trust challenges.
Last week, in a briefing held here, Microsoft said it means business in the Internet world. CEO Bill Gates, executive vice-president Bob Herbold and other Microsoft executives painted a picture of a world where it's easier to buy goods and services using the Net than to head out to a store.
Microsoft announced Passport, an electronic wallet that promises to eliminate the hassle of shopping on the web. At present you need to provide personal information, such as name, address and credit card number, to each web site before you can make your purchase.
Using Passport, consumers sign up once, registering their identification and payment information with Microsoft. A vendor who belongs to Passport can retrieve the electronic wallet information from Microsoft when you make a purchase from its site. Vendor members of Passport must agree to Microsoft's consumer privacy guidelines before they can access your information.
This will save time for consumers and eliminate another barrier to e-commerce. Yet I'm a little uneasy with the concept of depositing my personal financial information with Microsoft.
Granted, the company says the Passport system will be a secure as it can make it. If you must slip a digital wallet into someone's back pocket for safe-keeping, why not Bill Gates? Presumably he has enough green stuffed in his wallet to avoid the temptation of dipping his fingers into yours.
How do you know when you've found the best deal on the Net? Site-hopping is quicker than driving from mall to mall, yet there are many poorly-designed web sites that make it difficult to check prices. Microsoft announced the acquisition of Comparenet, an Internet-based comparison shopping service. It will be integrated into MSN.com to provide a comprehensive shopping directory to help you locate the product you want at the best possible price.
Microsoft also unveiled BizTalk, which resembles an enhanced version of EDI (Electronic Data Interchange), for transmitting orders between businesses.
It all sounds good, yet Microsoft's picture of shopping on the Internet was drawn with a hot air brush. The key building blocks of Microsoft's e-commerce strategy won't start to be available until the latter half of this year and company representatives declined to discuss pricing.
While Microsoft's approach to e-commerce can be described as "trust me," Intel's attitude is "trust no one."
Obscured by the uproar of privacy concerns raised by the processor serial number (PSN) in the Pentium III, is the reason why Intel put the PSN into the chip in the first place. It's all a matter of trust.
The PSN is designed to assure a commerce site that you really are who you claim to be. It's part of Intel's far-reaching e-commerce strategy where additional security devices, such as a random number generator, will be built into future chip sets. Hardware-generated random numbers will boost the security of orders entered using your Web browser.
If Intel had a corporate motto it would be "Only the paranoid survive." That's one reason why I believe the anti-trust action of the U.S. Federal Trade Commission against the chipmaker, withdrawn from adjudication on Monday, didn't uncover a vast amount of incriminating evidence, such as the indiscreet E-mails that damaged Microsoft's case. Trial proceedings will be halted while the FTC considers Intel's proposed settlement.
A few weeks ago I asked Intel chairman Andy Grove how the anti-trust action had changed Intel's business practices. There were no recent changes, according to Grove. Intel foresaw in 1987 the possibility that it might gain a dominant market share and changed its business practices then, on the advice of its attorney. It's said the company periodically raids the cubicles of executives to ensure there are no incriminating memos and it regularly purges archived E-mail.
Microsoft's anti-trust case, quarterbacked by the U.S. Justice Department, has gone into recess for several weeks, a last reprieve before the hammer comes down.
Microsoft clearly operates in a more open, trusting environment than Intel. This provided plenty of fodder for Justice Department lawyers, including how Microsoft planned to cut-off Netscape's air supply.
Even at the recent e-commerce briefing Gates found time to gloat over his competitive victory, "What happened to Netscape? That's a long story."
I'm betting that Microsoft will lose its anti-trust case. What's the appropriate punishment or remedy as lawyers like to call it? Should the company be fined, split-up or supervised by a judge? I've set up an opinion poll where you can vote and have your say. CW
Richard Morochove, FCA, is a Toronto-based computer consultant.
Copyright ©1999 by Morochove & Associates Inc. All rights reserved. This work may not be copied or distributed by any means without our prior written permission.
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