Microsoft Knew It

A 2004 white paper, to be read in light of the OOXML campaign

Italo Vignoli

Jun 01, 2026

In January 2004, Microsoft’s Business Solutions division published “How to Lock-in Your Clients,” a white paper written by consultant Ross Dawson and aimed at professional services firms.

Most of the text focused on relationship management and collaboration software. Hidden in the middle pages is a passage that, when read in 2008, takes on the tone of a full-fledged confession.

Discussing the possibility of retaining customers by increasing the cost of switching, the document states: “It is impossible to convince customers to purchase closed systems that would entail high switching costs if they later decided to switch to another provider. Given the choice, customers will always opt for the option that offers greater flexibility.”

So, Microsoft – or at least one of its divisions – put in writing, in 2004, that the coercive lock-in based on closed systems no longer works, and not because it is wrong but because it does not work.

The mechanism is obsolete: customers now realize this and reject it. The entire document is based on this premise: stop trapping customers and try to outdo competitors in terms of creativity.

Now let’s compare all this with what the company itself has done since late 2005.

The Timeline

Dates are important, so it’s worth recalling them precisely.

The white paper was published in January 2004. At that time, there was no standard, open alternative to Microsoft Office formats, and the document emerged in a world where Microsoft’s binary formats held a monopoly on the market.

The situation changed completely in 2005, when the ODF format was first approved as an OASIS standard and then submitted to the Joint ISO/IEC Technical Committee in accordance with the rules for publicly available specifications. Around mid-2006, ODF passed the ISO vote unanimously and was published as an ISO/IEC standard on November 30, 2006.

This marked the turning point.

For the first time, there was a credible, vendor-neutral, and internationally standardized office document format: a true alternative that a government or institution could specify and choose to adopt. The ODF standard meant the availability of a choice – that is, the condition in which, according to the 2004 document, incumbent operators could no longer survive by coercion alone.

And indeed, the State of Massachusetts decided to adopt ODF as the standard format for office documents. A decision that would later be blocked, but which set a devastating precedent for Microsoft, which responded immediately.

Microsoft submitted its own format to Ecma International, where Technical Committee TC45 produced the ECMA-376 specification, which was immediately approved in December 2006. All members of Ecma – the European Computer Manufacturers Association – used to have business relationships with Microsoft.

The specification was given priority consideration within the ISO/IEC Joint Technical Committee, and after the initial failure, the amended version was approved as ISO/IEC 29500 through an accelerated process and published in November 2008.

The fast-track process was the subject of extraordinary challenges, including formal appeals by four national bodies, numerous irregularities in the committee’s composition, and lasting damage to the credibility of the standardization system.

This controversy is a story in itself, one I will return to repeatedly in the future, but it is not the subject of this article, which aims to analyze the reasons why Microsoft decided to create a second competing standard in clear contrast to the thesis of the 2004 white paper.

Let’s try to compare the two timelines.

The white paper declaring the end of lock-in by closed formats is from January 2004.

ODF was submitted to ISO/IEC in November 2005 and was approved and published in November 2006. The decision by the State of Massachusetts ran parallel to this process.

Microsoft’s counteroffensive began a few weeks after ODF’s approval and continued unabated until 2008.

The company organized a sustained, multi-year, internationally coordinated campaign – which continues to this day, with the support of various companies – and launched it precisely at the moment when its own document stated that the old approach should have been abandoned.

My Point of View

The white paper originated from Microsoft Business Solutions, a small division based on the acquisitions of Great Plains and Navision in 2001 and 2002: an ERP and CRM company that sold primarily to medium-sized businesses.

The OOXML campaign was managed by the Office organization, still today the company’s main source of monopoly profits, on which a significant percentage of revenue and, above all, net profit depends.

Different units, different incentives, different audiences. A left hand and a right hand that don’t speak to each other, and that don’t even seem connected to the same brain.

In reality, the 2004 analysis was not naive idealism, but a strategic assessment so accurate that it prompted Microsoft to sell it to customers. The Business Solutions division, which was challenging established ERP vendors, needed to analyze the market clearly, because this was the best way to tackle its challenge, and from this perspective, coercive lock-in was truly obsolete, and stating so was a smart move.

The Office division found itself in the opposite position, that of the dominant vendor, and from this perspective found the challenger’s white paper’s viewpoint intolerable. If, as the document stated, a clean and standardized choice had allowed customers to choose flexibility, then the response was to ensure that the choice was never clear.

Thus, OOXML is not a closed system in the 2004 sense but something far more sophisticated: a direct attack on the possibility of choice.

By developing an alternative “open standard,” Microsoft ensured that the comparison was no longer between a true open standard format and a proprietary format, but between two ISO standards. In this way, the choice would fall toward the path of least resistance – and thus toward the Microsoft format. Lock-in is not eliminated, but it moves up a level from the file format to the standardization process that governs file formats.

The standardization of the OOXML format and the subsequent campaign to establish it as an ISO standard was a conscious choice by a company that fully understood the correct strategic framework and decided that this was detrimental to its business.

The Value of the White Paper

“How to Lock-in Your Clients” is a fundamental reference for understanding why the defense of OOXML – and of proprietary formats in general – was framed in terms of backward compatibility with billions of legacy documents and the protection of users’ information assets.

The 2004 document allows us to read these messages for what they are: a direct reference to the installed base, with the aim of creating uncertainty regarding the choice of document format, because it is precisely this uncertainty that the white paper identifies as the condition necessary to sustain a coercive lock-in.

The presence of a single standard, open format like ODF, recognized by ISO/IEC, threatened to make the choice clear, while the presence of a second standard like OOXML, also recognized by ISO/IEC (and it doesn’t matter if controversially, because the echo of the controversy would never have reached users), would have helped maintain uncertainty and would have pushed users toward the Microsoft format.

Thus, the document confirms – indirectly but unequivocally – that the OOXML process was the result of a deliberate choice and followed a precise strategy, based on an analysis conducted by Ross Dawson, the document’s author, which pointed to a direction Microsoft could not afford to take unless it wanted to relinquish its monopoly on office suites.

Why This is Relevant in 2026

Europe is debating digital sovereignty, and consequently whether government and citizen documents should be based on open formats that any vendor can implement or on proprietary formats controlled by a single vendor.

The arguments put forward against open standards are the same ones the 2004 document had identified: that proprietary formats are more compatible, that institutions already use them, that migration is costly and disruptive, and that users prefer what they know.

Two decades later, the strategy hasn’t changed one iota.

The arguments in favor of proprietary formats are not technical, but merely a simple description of the installed base – that is, the sole condition preventing buyers from making a choice and allowing lock-in to persist.

When a public administration, an organization, a company, or an individual user is told they cannot adopt an open standard because they depend on a proprietary one, they are effectively being told that lock-in has worked.

This is why we need to change, immediately, because we have an open standard format recognized by ISO/IEC for twenty years, ODF, which after twenty years is more important than ever. This format can save everyone – public administrations, organizations, companies, and individual users – from the lock-in situation they find themselves in, because since 2008 they did not listen to us and fell into the trap set by Microsoft.

Source: Ross Dawson, “How to Lock-in Your Clients: How Professional Services Firms Can Create Compelling Value for Clients Using Collaborative Technologies,” Microsoft Business Solutions white paper, January 2004. The PDF is available to the public on the author’s website: rossdawson.com.