"I have nothing to say about this. I hold only a tiny stake in Microsoft these days. We faced charges of being a monopoly and acting anti-competitively in the past and came through it. I'm sure the business will fend off these new accusations. Now if you'll excuse me I have a company to run.'

With that William Jefferson Gates III, chief executive officer of Bio-Tech Inc, the world's largest biotechnology company, jumped into his wired-up state-of-the-art motor launch and headed across Seattle's Lake Washington to a mooring offshore from his billion dollar home/office complex.

Welcome to the future, 10 years from now. It is a world where Microsoft has become far more powerful: where its software has migrated from the computer on your office desk to your hi-fi, to your digital television, to your intelligent fridge, to your palmtop personal organiser and, of course, to the mobile phone built into your tie clip. And, yes, in this scenario, Microsoft, even without Bill Gates, is again on the receiving end of the largest anti-trust trial in history, this time charged with trying to dominate the Internet in an anti-competitive manner.

In this scenario, Gates resigned from the company in 2002. His shock exit, following a boardroom coup, came only a few months after Microsoft agreed to open up its Windows source code to competitors, unbundle its Internet Explorer browser software and pay a hefty, undisclosed fine (rumoured to be about $70 billion) following a successful appeal against a Supreme Court judgment that it should be broken up into several different businesses.

Microsoft, bloodied but unbowed, returned to its core competence: developing software. This vision had been spelt out in the previous century when Gates announced he was to step down as Microsoft boss to become chief software architect, changing the company's focus from an applications and operating system manufacturer to a firm which could teach the World Wide Web to sing in perfect harmony.

At the time of his resignation in 1999, Gates said: 'I'm returning to what I love most - focusing on technologies for the future.' The plan, which Microsoft was to realise only following the ousting of Gates, saw the company reassert its dominance in the software market.

Gates, incandescent at his betrayal, subsequently sold almost all of his 21 per cent stake in the business through a series of private placings and used the money to fund his other great passion - biotechnology - quickly building the sector's biggest firm.

Despite the acrimonious departure, Microsoft was to thank Gates for sowing the seeds which grew into the Microsoft of 2010. Previously its formula for success had been simple: dominant PC operating systems led to dominant applications which led to the chance to dominate emerging markets. But once this loop was broken, Microsoft knew it needed a new game plan. The Internet brought new competitors, new distribution methods and, most importantly, new opportunities.

The radical transformation began in the year 2000, so ... back to the present.

Few people have yet heard of Distributed interNet Architecture (DNA) and even fewer people know how it will work, but it is clear that Gates and Microsoft see it as crucial to the company's longevity. The software writing involved in DNA may be complicated but the idea is simple: Microsoft wants to create and impose its own standards and protocols on the Internet.

As the way we access and use the Net changes, ensuring a common set of standards will be crucial. Companies and individuals want seamless communication links: after all, who ever got excited about disjointed communication?

Currently the standards which are used to allow cooperating computers to share resources across networks are called TCP/IP (Transmission Control Protocol/ Internet Protocol).

Software experts argue that Microsoft's DNA plan amounts to the introduction of its own set of protocols which will allow new generations of intelligent devices to talk to each other. 'If the Department of Justice is worried about the browser situation, this is Rockefeller and John Pierpoint Morgan rolled into one with turbo-charged stripes,' said one technology expert.

The fact that Microsoft is now limbering up for the fight to impose its own standards on the Internet should not really be a surprise. As the eminent technology journalist, Charles H Ferguson, writes in High St@kes, No Prisoners , his book about the Internet wars: 'Microsoft competes by establishing industry standards, and relatedly by commoditising the business of others. It develops products by licensing, acquiring, or copying the innovations of others and commercialising them in the form of high-volume industry standard platforms.'

This view explains why Microsoft has been so interested in taking stakes in, or linking up with, companies whose activities span the digital spectrum. In Europe for instance, Microsoft has stakes in cable operators NTL and Telewest; it also has an alliance with NDS, the com pany (80 per cent owned by News Corp) which is developing code to power the next generation of interactive television services. Microsoft is also in partnership with DX3, which specialises in encrypting music for transmission over the Net.

Chuck in its alliance with Ericsson for the development of next-generation mobile phone operating systems, not to mention numerous deals involving networks such as BT Cellnet, and handheld device manufacturers such as Casio, and it is clear that whichever platform you choose, there's a little bit of Microsoft lurking inside - except for video games consoles, a market dominated by Sony, manufacturer of the PlayStation. This explains why Microsoft is busy building its own games console complete with Internet access provider, called the X-Box.

Microsoft's critics may shudder at the implications of a wired world where the methods of procedure are devised and controlled by the software giant just as, for 20 years, the PC market has been forced to play according to the Seattle company's rules. However, the company itself sees its role in a more evangelical light. 'We're moving to a world where we believe people will be connected to the Internet through many devices. So for Microsoft the opportunity is to create a platform which spans these devices,' said Shaun Orpen, its director of customer marketing.

Some argue that it is precisely because of these increasingly diversified forms of technology and the plethora of companies who champion them, that fears about an all-powerful Microsoft are misplaced. 'They will be a strong player, but they won't necessarily be the dominant one. Before Microsoft was lucky - most of its competitors were inept. They won't make the same mistake this time,' said Michael Gartenberg, a US Vice President with IT consultants Gartner Group.

The signs are that some of these future competitors will come from within: Microsoft's big hitters are leaving because of a mixture of avarice and apathy towards their employer. Steve Chang, founder and head of Trend Micro, one of the world's largest online security companies and a partner of Microsoft, said: 'The tragedy for Microsoft is that all its top executives are leaving. They've been working there almost 15 years. They're going into dot.com companies. Without great people you can't have a great company.'

It seems a bizarre thought. The greatest threat to Microsoft may not be the US legal system but desertion by the foot soldiers who helped the company achieve its monopoly.

Either a break-up or a brain drain would cause its monopoly to crumble, albeit at different speeds, because the company would lose the physical and critical mass which secured its omnipotence in the first place. And, of course, without sustaining that sort of size and clout, Microsoft's dreams of creating the next generation of Internet protocols can never be realised.

Microsoft knows where it wants to go today and it knows where it wants to be in a decade. Whether it can arrive is down to the Department of Justice and the loyalty - or otherwise - of its own employees.

• Additional reporting by Dan Milmo