Microsoft hopes to use its Windows monopoly as a launching point for making its file formats the de facto standard for digital content, which is why the company gives away its authoring and serving tools with Windows 2000 server and its media playback software with Windows XP, Gartenberg said. Companies such as Apple and RealNetworks charge for some of these products.
“It’s the typical Microsoft strategy, where they use this almost as a Trojan horse to bring something into play,” Gartenberg said. “The more ubiquitous it can make its file formats, the more they think that will drive adoption rates. This is a critical, critical effort for them.”
Whoever controls the most popular file formats can harness them for selling server software. This is something Microsoft demonstrated with its Office productivity suite, in which the ubiquity of file formats is considered a major catalyst for driving Windows sales.
“Microsoft’s main goal with Windows Media services is to sell as many servers as possible,” said Directions on Microsoft analyst Matt Rosoff. “That’s why it’s only possible to host and stream and create Windows Media Format files on Windows servers.”
More than anything, control on file formats (DOC, XLS and PPT) is the biggest entry barrier for desktop alternatives.