Microsoft: Liberty Alliance under scrutiny

A debate over the Liberty Alliance - an industry group that is developing an alternative to Microsoft's Passport user...

A debate over the Liberty Alliance - an industry group that is developing an alternative to Microsoft's Passport user authentification service - developed into a short, tense exchange at the Microsoft antitrust remedy phase at the end of last week.

Microsoft attorney Steven Holley was grilling Sun Microsystems' chief strategy officer, Jonathan Schwartz, about the Liberty Alliance.

"The name 'Liberty Alliance' was created as an insult to the Microsoft corporation, was it not, because it is meant to mean liberty from Microsoft?" Holley asked.

"With all due respect, I think that's a little paranoid," Schwartz replied.

The paranoia reference was an apt one - but it applies to both sides. It has been the subtext of the remedy phase.

The nine states that refused to sign the Bush administration's antitrust case settlement in favour of tougher remedies have been arguing that Microsoft will use its desktop monopoly to dominate emerging technologies such as Web services.

Web services refer to an architecture that facilitates the interoperation of software though common protocols. IDC predicts that Web services will grow from a $1.6bn (£1.1bn) market in 2004 to $34bn (£24bn) by 2007.

In the important customer authentication area of the market, much is still being decided.

Microsoft has already made some key shifts in strategy. Its initial emphasis with its Passport service involved storing customer information on its servers and becoming, in effect, an intermediary between the business and customer.

But that business model faced criticism. So last September, Microsoft - while not abandoning the model entirely -- said it would shift its priority to making the service interoperable with competing companies and allow enterprises to run it.

Unresolved, however, is the role Microsoft will have with the Liberty Alliance and its developing authentication standard. Microsoft hasn't joined the group, and Holley's allegation during Schwartz's testimony gave a hint of fuming Microsoft executives somewhere in the background.

But Eric Dean, president of the Liberty Alliance board and chief information officer at United Airlines, said the goal of the alliance was not to fight Microsoft.

Dean said that when he was first approached by Sun, he stressed that Microsoft is a "big partner" of United "and we have no interest in having a war with Microsoft or competing with or having liberation from Microsoft."

Sun "was very explicit in return" that those were not the aims of the alliance, he said.

"We need Microsoft's co-operation, and they need some of ours, and I think everyone's intent is to accomplish that," said Dean.

A Microsoft spokesman said that the "door is still open" and that the firm continues to work informally with the alliance.

The alliance includes Hewlett-Packard, France Telecom, General Motors and MasterCard International. That kind of corporate representation is likely to ensure that authentication standards developed by Microsoft and the alliance are "probably going to be a duopoly, like Mastercard/Visa," said Rob Batchelder, an analyst at Gartner.

The remedy hearing resumes today, in what will be its fifth week. After the last witness for the states testified, Microsoft will put its own witnesses on the stand.

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