The Wiles Of The Old World

Leave it to the French to tell an American multinational where to go. Last year, having noticed how much money the government was spending on software--mostly from Microsoft--Paris bureaucrats advised state agencies to switch to cheaper products. The Ministry of Culture has since ditched Windows in favor of Linux, and other agencies plan to do likewise.

Europe's competition authorities are keeping a careful eye on the U.S. case against Microsoft. Brussels will likely want any remedies imposed in America to be applied in its bailiwick, too. And meanwhile, it's proceeding with its own, separate antitrust probe into Windows 2000. Yet as France's Culture Ministry showed, Bill Gates doesn't enjoy quite the clout in the Old World that he wields in the New. "In the U.S., it tends to be a foregone conclusion that you're wedded to Windows," says Matthew Nordan, senior analyst for Forrester Research in Amsterdam. "In Europe, people are much more likely to search for alternatives."

The reason? Sometimes it pays to be late. Corporate Europe switched from mainframes to PC-based networks only in the mid-1990s. When Americans made that leap half a decade earlier, there weren't any alternatives to Microsoft. But by 1995, Linux was ready to compete with Windows. As a result, companies like Siemens, Volkswagen and Deutsche Bank have been using Linux for years.

Most consumer PCs in Europe still use Microsoft products. But here, too, the competition is heating up. In Germany, Linux is becoming especially trendy. Nuremberg-based Suse alone shipped 900,000 copies last year. And the European consumer market will continue to tilt toward Internet-capable mobile phones and other handheld devices--an area where Microsoft has only a foothold. In Finland, Nokia is developing next-generation devices using Linux. In Italy, there are five times as many mobile phones as PCs. Those are obstacles for Microsoft bigger than any judge--or any French bureaucrat--could devise.