Microsoft’s Real Punishment is Having to Fight with the Gloves On

By the time the Microsoft anti-trust cases wound down, it could be argued that the alleged damage was long since done to the industry.

In a curious reversal, it appears that Microsoft’s direct penalties from the case were only a tiny beginning.

The real penalties Microsoft pays are not in money, nor in shipping “K” and “N” SKUs. They are in product strategies unpursued because they would be too provocative. In other hands, such strategies  might be reasonable if aggressive, but for Microsoft they might look like “relevant conduct.”

Today’s announcements about Office 2010 (“14”) were … well … let’s just say if you didn’t read about it, the most interesting thing you missed was seeing critics point out that Microsoft, inventor of AJAX (literally, for the Outlook web client), is only bringing other apps online 10+ years later.

The reasoning here is not about selling client OS licenses. Microsoft could have moved to the cloud richer and faster and more profitable if it could take the gloves off.

Need to get Silverlight penetration up from its abysmally low numbers to where it can really compete with Flash and become a meaningful platform? Just ship it with Windows and make it a priority update to every Windows box in the world. Problem solved. Now we can get down to the real work writing apps. Or at least Adobe could actually face some competition. But Microsoft doesn’t dare do this.

Why not stitch cloud storage directly into the OS? I hate leaving files “on the other machine.” Right out of the box, anytime I see an “Open…” or a “Save As…” dialog box on Windows 7, I would like the default destination to be a secure folder on Windows Live SkyDrive. Using the provider pattern, other vendors could offer a similar service, and the end user could choose. But Microsoft doesn’t dare with this either.

It is quite possible that the long-term benefit to the industry of having Microsoft thus restrained far outweighs the “lost” value we could have had from Redmond. But let no one fool himself into believing that what we see from Microsoft these days is everything they have to offer.