Microsoft opens key software details to rivals

REDMOND, Washington (Reuters) - Microsoft Corp said on Thursday it would publish key software blueprints to let rival programs work better with its products and address some European antitrust concerns.

Microsoft CEO Steve Ballmer, with general counsel Brad Smith (L) and Ray Ozzie (R), chief software architect, speak to reporters at a news conference at company headquarters in Redmond, Washington, February 21, 2008. REUTERS/Robert Sorbo

The world’s largest software company said it would follow up with more actions to address European demands, although the European Commission said Thursday’s move did not resolve a key issue about how Microsoft’s products are tied together.

Microsoft has been criticized for shutting out competitors by incorporating programs such as its media player closely into its Windows operating system, and by keeping secret product details that rival developers need to ensure smooth operation with Windows and other Microsoft products.

Thursday’s move would open up to competitors some of the secret codes behind key products like Windows Vista. But the steps do not address the allegations of product tie-ups.

“Microsoft kind of kept its software products as a walled garden, and it is kind of opening the gates to the garden,” said Toan Tran, a Morningstar analyst.

“The product-tying issue is much more important because the Windows business model is built on continually improving the product,” he said. “If Microsoft is restricted from adding new features, it restricts the Windows business model.”

From the cooperatively developed Linux operating systems to social networking site Facebook, open systems are becoming key to growth for many software firms, which Microsoft Chief Executive Steve Ballmer acknowledged.

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“I believe Microsoft’s long-term success depends on our ability to deliver a software and services platform that is open, flexible and presents customers and developers with choice,” he said on Thursday.

To make connecting with third-party software easier, Microsoft will publish on its Web site software blueprints, known as application program interfaces, pertaining to its high-volume products used by other Microsoft software.

In September, a European Union court upheld a landmark ruling that Microsoft had abused its dominant market position.

The court endorsed EU sanctions against Microsoft for tying together software and refusing to give rival makers of office computer servers information to allow their products to work smoothly with Windows.

The court also said Redmond, Washington-based Microsoft was unjustified in tying new applications -- or software programs -- to its Windows operating system in a way that squeezed out rivals and harmed consumer choice.

“This announcement does not relate to the question of whether or not Microsoft has been complying with EU antitrust rules in this area in the past,” the EU said on Thursday.

Microsoft also pledged not to sue open-source developers for development or noncommercial distribution of the software blueprints it makes available.

In January, the European Commission launched new antitrust investigations into Microsoft to see whether the company broke competition rules to help its Web browser and its Office and Outlook products.

Microsoft said the moves announced on Thursday apply to these products: Vista, Windows Server 2008, SQL Server 2008, Office 2007, Exchange Server 2007 and Office SharePoint Server 2007, as well as all future versions of the same products.

Microsoft shares were up 4 cents to $28.26 in afternoon trading on Nasdaq.

Reporting by Duncan Martell in San Francisco and Daisuke Wakabayashi in Redmond; editing by Andre Grenon and John Wallace