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25/12/97

making sense of microsoft

"pride goeth before a fall..."

during the holiday season, 1997, microsoft was in the news quite a bit, being challenged by the US department of justice. since i was a computer user, my relatives wanted me to explain the issue to them.

basically, the department of justice is reacting to microsoft's move to succeed in the web browser industry based on its success in the operating system industry. over 90% of computer users work with windows, and microsoft would like all of them to use internet explorer to surf the internet as well.

in laws devised to prevent monopoly businesses from restricting competetion, called "anti-trust laws," this is called a "tie-in": using your strength in one market to move into another.

my stepfather george illustrated it with an example from his experience: during World War II when importing boats were being shot up and fruits like bananas were hard to come by, some folks would sell bananas, and make you buy potatoes as well. so the people who were selling just potatoes would lose out because they didn't have any rare commodity to offer, and people who wanted potatoes to eat just picked them up with their bananas.

if microsoft can distribute its internet explorer along with its windows operating system, then millions of first-time computer buyers will end up using microsoft internet explorer by default.

this argument assumes that people are lazy, sort of, that if they buy a computer, and an operating system, they will use the web browser provided to them before they will seek out another. then, once they have begun to use that web browser, they will not take the time to seek other options. also, people are cheap. netscape, microsoft's leading competitor in the web browser wars, doesn't have many sources of revenue, and so they ask users to pay after a trial use period. microsoft gives their web browser away for free since they make money in other software markets.

in the history of business law and ethics in the united states, we think that's wrong. if microsoft wants to compete to have the best web browser, they should have to distribute their browser like everyone else, they shouldn't be able to fold the web browser market into the operating system market, which they control.

software is often distributed through partnerships. a real example: compaq, a computer maker, had contracted with microsoft to distribute its windows operating system. it had also contracted with netscape to distribute its navigator browser. microsoft sent compaq a letter threatening to stop selling compaq the windows operating system, needed to run their computers, if compaq continued to distribute their computers with netscape's navigator featured over microsoft's internet explorer.

this, according to US law, is unfair.

and i think i agree.

my brother colin admires microsoft because they are such a success story: they came from nowhere, and with aggressive tactics and relentless pursuit of their goals, they now stand at the top of one of the world's most promising industries.

on a very essential level, microsoft has made the power of computing available to millions of people. their windows product, though it lacks the finesse of the macintosh operating system, which i use, is a cheap way to make a computer easier to use. now microsoft would like to do the same thing to the internet: they would like to build their web browser into their operating system so that people could be connected to the internet easier than before (then more people use their product, and they make more money).

but the internet is an enticing market precisely because the internet software field has been open for innovation. certain standards are agreed to by a community of developers, and those standards are published, so that anyone may design software to work with them. if microsoft develops both the operating system and the web browser, the organizing principles for life online, how can someone offer a fresh way to look at things?

after talking to a few of my more software literate friends, i realized that microsoft's advantage in the software industry stems largely from their ability to integrate their products. the people developing internet explorer have access to the people developing windows. they can meet and make sure their products take advantage of parts of the programs that other software companies might not know about.

i was thinking that that microsoft, in the short term, should publish their "spec" (specifications) that they are using to develop the web browser part of windows 98. if the web browser is built in, they should make it modular, so that netscape, or other companies might publish competing plug-in internet functions.

but this does not resolve the larger issue i think my family was inquiring into. the reason people who generally avoid technology are interested in the microsoft story is because it is an old one. prior to the most recent justice department action against them, microsoft was an aggressive young empire. they offered their citizens access to the world, a consolidation of the unruly powers offered by the internet. but the microsoft empire has grown prideful. they have stepped up to demand a certain respect they feel they deserve for running on the computers of most all of the world. and anyone that stands in their way is stupid

microsoft has rendered themselves subject to scrutiny, and now we can see how big they are, and how big they aspire to be.

did you know microsoft is the largest encylopaedia seller in the world?

their encarta CD-Rom is the best-selling encyclopaedia in the world. so microsoft makes the most available basic book of general knowledge.

did you know microsoft sells cars, houses, vacations, concert tickets...?

through online ventures, particularly sidewalk.com based in different cities, microsoft is positioning themselves to be the middlemen on all sorts of online transactions people might like to make in the 21st century.

did you know microsoft is the largest teacher of software programmers?

between their books, coding libraries (bits of pre-written computer programs that computer coders can more easily compile to create their own), and training courses, microsoft determines that computer programs are built according to their architecture. in other words, microsoft is defining the vocabulary of computer use.

the destiny of microsoft seems to be at stake here, with regards to windows 98 and internet explorer integration, because they've put their entire corporate philosophy on trial. their aggressive behaviour, their nose-thumbing the us government, is on the front page of business sections daily.

in some sense, it is out of our hands. there is some place in the world for consolidation of power, and the creation of a microsoft standard to lead us through what might otherwise be untenable software chaos. but things can only get so big before they crumble. when their course has run its end, microsoft will reach too far, and their power will be checked.

the question is whether that is what has happened now.

you know what they say about pride,

amongst others, these links informed me:

netaction whitepaper: "From Microsft Word to Microsoft World: How Microsoft is Building a Global Monopoly

a thankfully thorough if slightly unbalanced account of microsoft's dealings.

news.com's microsoft under the gun

contains important primary source data/links.

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