RealTime IT News

Microsoft's 'Rope-a-Dope' is Fooling No One

Microsoft has tried it all in its seemingly endless heavyweight bout with the European boxing -- I mean Competition -- Commission.

In the latest round, the European watchdog jabbed at Microsoft for gouging competitors with royalty rates on interoperability protocols, which the commission judges too high. Microsoft responded by leaning into the ropes and announcing that Quest Software  had agreed to license those protocols.

The sparring between the two reminds me of when Muhammad Ali took the heavyweight boxing crown from George Foreman in 1974 by leaning back on the ropes and letting the bigger, more powerful boxer punch himself into exhaustion. Ali deflected and dodged everything Foreman dished out for several rounds and then, once the champ had worn himself out, scored a knock-out in the 8th round.

Ali called it the "rope-a-dope." Maybe Microsoft thinks it can make the technique work against the regulator, too.

Ever since the committee ruled in 2004 that the Redmond, Wash.-based vendor had been abusing its monopoly position on the desktop to gain an unfair advantage in the enterprise group server market, Microsoft has alternated between two other trademark Ali techniques: floating like a butterfly and stinging like a bee, by turns beating its chest and beating retreat.

And the commission, for its part, hasn't been afraid to engage Microsoft in a fight, aiming powerful uppercuts in its direction on more than one occasion.

Flaunting the Quest deal as proof that it's playing by the rules and that its partners don't find its prices too high is Microsoft's way of leaning against the ropes and trying to keep just out of reach of the regulator's haymaker.

Microsoft associate general counsel implied that Quest signed the deal on March 1 as an explicit repudiation of the commission's position on the royalties Microsoft is charging.

"In fact Quest chose to sign their license the same day the commission issued its Statement of Objections on protocol royalties, even though we had agreed to terms with Quest some weeks ago," Andersen said in a statement.

He added that "this agreement clearly shows that Quest believes the royalties are reasonable."

But this was all news to Quest.

Last week, I read Andersen's comments to Dave Wilson, vice president of identity management and interoperability at Quest, and he said "that's absolutely not true."

Keep in mind that, as a global gold partner and Microsoft's 2004 Global ISV of the Year, Wilson would have had every reason to hang in Microsoft's corner.

And he did say that, where his company is concerned, the "pricing is okay."

But he contradicted Microsoft's description of the terms of the deal. Microsoft claimed that Quest signed up for the list price 5.25 percent royalty, whereas Wilson noted that "built into our agreement is a certain amount of flexibility."

He also disputed Microsoft's version of the timing of the deal, saying the deal hadn't been signed until March 5.

A Microsoft spokesman explained that the discrepancy results from the fact that the protocol licenses are dated March 1, but agreed that the contracts weren't signed until March 5. He also said that Andersen was actually "trying to make the point that these discussions were not influenced by the SO."

However that may be, Microsoft might also do well to remember that rope-a-dope didn't always work for Ali. He lost to Smokin' Joe Frazier using that approach.

The commission, for its part, refused to play the part of the roped-in dope, and declined to swing at Microsoft's feints. The regulators merely await Microsoft's response to the SO it sent last week. Microsoft has until March 29 to respond.

Michael Hickins is senior editor at internetnews.com.