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NYTimes: The Land of Monopolies

Jul 01, 2001, 17:00 (58 Talkback[s])
(Other stories by John Schwartz)

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Are technology monopolies inevitable in the New Economy? A columnist for The New York Times thinks so, pointing out that even though Linux is free, consumers are not flocking to it and rejecting Microsoft tools:

"What troubles some observers of the world of Internet-enabled software and services â€" which marches to slogans like 'get big fast' and 'winner take all' â€" is that a number of factors may make it a breeding ground for monopolies."

"Not all of those factors are new. There are decidedly old fashioned economies of scale that make it cheaper to manufacture things in bulk. In the world of selling intellectual property like software, the trend is even more pronounced, because it costs a great deal of money to develop the product and almost nothing to put it on disks and sell it again and again. This makes it harder for newcomers to enter the market, because they must spend so much time and money up front just developing a product, before they can try to sell it...."

"It has been suggested that the so-called open source technologies â€" software like the computer operating system Linux â€" might offer real competition to the commercial software giants. These software platforms are designed by volunteers, given away for free. But Linux, like many of these software labors of love, isn't a really consumer product that can be easily installed and run by mere mortals. Although people who run Web sites have flocked to the free, open software, consumers have not."

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