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.
