---

Paul Ferris — A Response To John Dvorak’s Column: “Not a Monopoly, Marketing”

By Paul Ferris

[ The opinions expressed by authors on Linux Today are their
own. They speak only for themselves and not for Linux Today.
]

[ lt ed. — Quotes copyright PC Magazine. ]

In John Dvorak’s January 3, 2000 Column
“Not a Monopoly, Marketing”
, he writes:

“Microsoft is not a monopoly; it just pretends to
be one. In fact, what’s gotten the company into trouble is its
scheme to cover up the fact that the PC is a proprietary platform
designed and owned by Microsoft. Windows is part of a proprietary
platform and competes with other pure platforms, including Mac and
Sun’s Solaris. Why else would Scott McNealy be so obsessed with
Microsoft?”

Flawed logic, John. Let’s start at the end. I can think of a couple
of dozen reasons why Scott McNealy might be “obsessed” with
Microsoft. First, his company, Sun Microsystems, makes pretty
competitive, quality hardware that he cannot sell on its (the
hardware and software’s) merits. Why? Because “off the shelf”
software won’t run on it.

Imagine that Microsoft owned all of the gas stations. Imagine,
in this broken reality, if you could also buy a quality, super-fast
sports car for a couple grand over the “Microsoft” brand car.
Microsoft, in this case, would simply make the engines for a host
of cars. They would dictate that all of the cars come with a
special patented fuel filler, one that no one else could make. The
sports cars would all be impractical to drive because the fuel
filler problem would prevent you from using the non-Microsoft car.
You would have to resort to inferior technology when you knew you
could be using something better. Imagine how you would feel if the
sports car were free, to boot.

Scott McNealy is likely “obsessed” because he can’t compete with
these kind of conditions in place. I hope it changes. I myself
worry that Scott would like to be the next “Bill Gates”. God
forbid. I hope, I pray there will be no next Bill Gates and that
GNU/Linux, the BSDs and the government will see to that.

That’s the scenario today. Microsoft is a monopoly because their
software runs on 90% of the computers made worldwide. It’s partly
that way because of marketing. It’s also partly that way because of
exclusionary tactics. Read the trial testimony. It’s a fact from
the trial, not some peyote induced dream, that they have a
monopoly. They have used exclusionary tactics and abused said
monopoly (fact again, from the trial). A Federal judge has
expressed these facts in his findings. You can have all of the
wrong opinions you like, but these are the facts.

“Microsoft’s model for marketing a proprietary PC
(which I’ll call the Microsoft Windows PC) is unusual, because
Microsoft doesn’t manufacture the hardware. The concept is similar
to the fab-less semiconductor company. Microsoft does control the
specifications of the computers and essentially outsources the
manufacturing of the computers on a no-fee basis. This is a
remarkably generous approach. The company expects that this
generosity be rewarded with some modest amount of loyalty. Why
should Microsoft put all this effort into the design (for example,
PC-100 specifications) if a company is going to put Linux on the
PC? Use a new legacy-free box or something else for
that.”

I will grant that Microsoft’s position is unusual. I’ll give Bill
Gates credit for realizing that he could captivate practically the
entire commodity hardware industry with proprietary software. But
similar to the fab-less semiconductor industry? I don’t think so.
Microsoft didn’t commission Intel to improve it’s processors. That
market for PC hardware has thrived, but today it’s getting out of
hand. Today, the off-the-shelf software industry has been
captivated by network effects of hardware/software.

It’s a chicken and egg scenario. No one can get into the market
to compete because all the applications are coded for Windows and
the barriers to entry for new platforms are too high. To enter the
market, you would have to get the application coding houses to code
for your platform, and those costs are astronomical. Thanks to
these costs, we’re now saddled with hardware that’s bloated to run
a bloated operating system and bloated applications.

Instead, if there were competition, and some kind of decent open
standard, you would likely be able to purchase a VCR-like device
(at similar cost too) which would function as a PC. The hardware is
dropping in price and it’s starting to get into a range where the
tax that Microsoft demands for “loyalty” is nearing the cost of the
hardware manufacturer’s product.

Microsoft has long since priced themselves out of the market —
but their monopolistic and exclusionary tactics have kept them in
the saddle. Seen in this light, Microsoft is not generous —
they’re the only ones raising prices in this climate. Some
generosity. Oh, I’ve seen some of their generous practices. For
example, if a college professor utters their name in the proper
context, he can receive bonus money. They pay for people to speak
as if on their own behalf.

“It’s for marketing purposes that this proprietary
Microsoft Windows PC platform is not portrayed as such. Microsoft
is playing into the sentimental notion that the PC itself is an
open platform that offers more choices. Third-party development and
faux competition with Microsoft was encouraged to deceive the
buying public.”

“With the PC, Microsoft took control of the platform
immediately and is largely responsible for its development. The DOJ
testimony that Microsoft was pushing Intel around reflects this
fact. IBM got early credit for the platform, but when IBM rolled
out its PS/2 machines and the Micro Channel, IBM found Microsoft
owned the platform. Once Windows fully arrived, Microsoft took
brutal control.”

I can kind of agree with you here. Win-modems, cheap printers that
are only Windows-centric — yes, these are examples. IBM, however,
was kind of the “previous Microsoft”. The PS/2 line was doomed when
it tried to make a proprietary standard where a usable, fairly open
one existed. You’re conveniently leaving out the part, however,
where IBM contracted Microsoft to write OS/2 (the operating system
for the PS/2 hardware). Given the fact that Microsoft wanted that
space and they got it, one can only speculate at how badly IBM got
the shaft.

But Microsoft being “in control” of the hardware development?
No, they took advantage of the hardware development. Faster
hardware arrived because of the work of Intel. The only reason that
Microsoft tried to push Intel around was because Intel was
attempting to create software tied to their hardware and the fact
that Microsoft (a smaller company) was able to push Intel around
points again to their monopoly and the fact that they were not
afraid to use it.

“This way of looking at Microsoft and Windows
explains everything, including Microsoft’s recent whining –
especially about innovation. To many of us Microsoft seems to have
made no innovations that weren’t borrowed or bought. But if you
throw in the hardware part of the equation, you’ll find things such
as the USB port and other true innovations. Microsoft’s annual
WinHEC conference addresses the hardware aspect of the Windows
platform. Why would such a conference even exist if Microsoft
weren’t in full control of hardware
specifications?

I have not seen a whole lot of people attempting to stop Microsoft
from innovating. As a matter of fact, I support their right to
innovate. Any time soon would be a good time to start. Microsoft?
Hardware innovation? A recent Forbes write-up on Microsoft (clearly
a cake PR piece, sited over and over Microsoft’s most recent
“innovation”:

Clear-type. That’s right, a widely agreed upon technology that
Apple pioneered with video displays in the 80’s. That’s the only
thing they could come up with. I gagged at the thought. USB? That’s
an innovation? A Microsoft one? Give me a break. Microsoft has
ridden a wave of hardware innovation all right, but it’s not their
own.

“Seeing the Windows PC as a proprietary platform
also explains why Microsoft would want Netscape out of the picture.
I’m certain that nobody at Netscape visualized the situation
accurately. They obviously believed the Microsoft marketing
nonsense and made bad assumptions. By siding with Sun and making
noise about having a Net OS running on the Microsoft Windows PC
hardware, Netscape violated the proprietary nature of the Microsoft
Windows PC.”

I disagree with your assumption about Netscape here. I think that
from the beginning they knew what evil they were up against.

“Microsoft owns the specifications and essentially
licenses them on a no-fee basis, so the company feels no obligation
to let other companies do whatever they want on the system, which
would be like going into a fancy restaurant and setting up your own
hot- dog stand. Once Microsoft decided to shut Netscape out, it had
to go around and remind the gratis licensees (Dell, Compaq, and
others) of their obligations as manufacturers of the Microsoft
machine! These companies make money off Microsoft’s hard work – at
the behest of Microsoft. Seen this way, the Microsoft “threats” to
pull the OS from any company bundling Netscape were
reasonable.”

Really? Imagine if you had no choice of restaurants at all. Then
you might welcome a hotdog stand in the only restaurant in town.
Your analogies are pathetic here. Microsoft clearly did try to shut
Netscape out — Netscape was trying to make the operating system
unimportant and the browser the new operating system. Microsoft
couldn’t accept that. OK, I’ll agree there if that’s what you’re
trying to say.

But since when is “loyalty” a salable commodity? It’s not.
Business isn’t the same thing as the Mafia, where you have to pay
your respects to the Don. What you are describing here is illegal.
Microsoft’s “hard work” has not been in the quality area or the
competitive area, it’s been in the exclusionary tactics area. They
used their platform dominance to kill off an innovative company.
Why should the only place on the planet where innovation is allowed
be Redmond Washington?

“The most laughable irony is that Microsoft has
marketed around the fact that the Microsoft Windows PC is a
proprietary computer. The marketing machine should have said: “Hey,
this whole thing is nonsense, since we own a closed proprietary
system. It was only for the purposes of marketing that we made it
appear to be open, so we could sucker people into buying our
software and fool them into believing they actually had a real
choice. Marketing, marketing, marketing.” The fact that other
operating systems can run on the Microsoft Windows PC is actually
amazing. But the fact that few people use these other systems is no
surprise.”

Most people have not had a choice at all when it comes to operating
systems. PC’s have not appeared “open” to the average public buyer
until recently. A good portion of the people I talk to are
surprised to find out that anything besides Windows even
exists. Openness has only been the perception on the
operating systems side — only the hardware side. You are using
bait and switch tactics here. Hardware is different from software
— you know it, I know it. When true openness arrives, when people
can choose any hardware platform and any software platform — then
maybe there will be some competition. I await the day.

As for the “fact” that few people use those other systems, if
there had been a choice somewhere along the line, then there might
be something different. By abusing it’s monopoly and preventing
that choice this option has been removed.

“Seen in this light, Microsoft is no more a
monopoly than any other company selling a single product in a
complex marketplace. Unfortunately, the foundation of Microsoft’s
success – an overly complex marketing scheme – is what led to this
recent humiliation.”

Oh, and I suppose having the market might that they do is
comparable to any other company? What planet are you on? Microsoft
has bilked America out of some huge amounts of money and limited
our choices to boot. No, I will not agree here. You need not but go
into Best Buy and try to get a PC pre-loaded with Linux. When that
day arrives, then I might try to see things your way. The reality
is: Microsoft is huge in influence, price and
market share. They abused those items and killed off competition
wherever it was perceived. Look no further than that and you will
see the truth.

Humiliation? How humiliating is it to have false testimony
before a federal judge? How humiliating is it to have been caught
sending customer private information to a database somewhere at
Microsoft? How humiliating is to have been caught paying for phony
grassroots support? Microsoft has lost the respect of the public
for many things. Now they have lost a federal court battle as well.
There’s humiliation for you.

Let’s hope that the fines and the remedies bring some justice in
line with these and Microsoft’s many other infractions.