Microsoft's .Net strategy would actually benefit from the software giant being split into separate operating system and applications software entities by the US courts.

That's the surprising conclusion of Gartner vice-president David Smith, who reviewed the prospects of Microsoft in the post-PC era during the analyst's autumn Symposium/ITxpo in Florida this week.

Referring to Microsoft's .Net strategy for converting its software applications to web services, Smith said: "The .Net vision is more likely to succeed as part of an applications company. If Microsoft is not split, .Net will continue to focus on Windows."

He explained that an applications company, which would be strategically dominant after any split, would be more committed to .Net as a platform for its development efforts and the programme would not be sidelined as some Microsoft initiatives, such as the Digital Nervous System, have been previously.

Overall Smith praised .Net as fresh and forward thinking. "Microsoft has seen the discontinuity coming and defined it before its competitors," he said.

However, the praise came with a sting in the tail. Smith said Microsoft's overall importance has been in decline since 1995, because of the emergence of the internet as a mainstream phenomenon, as well as the software giant's antitrust problems.

These factors, and the establishment of Java as a viable software development platform, have toppled Microsoft from its former pre-eminence in the software industry, he argued.

"Java was a big blow to Microsoft's development efforts and not one that Microsoft has fully recovered from," said Smith, who added that despite its success on the server, Java never became a serious threat to Windows.

If Java had ever threatened Windows, Microsoft would "unveil its thermonuclear warhead" and switch to a web services programming model based on more open standards - in other words, an environment very close to what is now been promoted with .Net.

"What was 'Plan B' for dealing with Java is now 'Plan B' for dealing with Microsoft versus the United States," said Smith.

Turning to the strategy of a separate 'Windows' operating system company, upon which severe behavioural restrictions on business practices might be imposed, Smith said it would be likely to impact operating system prices but that the impact on overall total cost of ownership would be low.

"Enterprises should ignore the rhetoric coming from Microsoft claiming increased complexity and increased cost of ownership if it is split," he said.

Smith advised companies to insulate themselves from the consequences of the Department of Justice antitrust case, about which they should not be particularly worried, by careful contract negotiation, and to expect product delays from Microsoft that would be "even more than usual".