1. IrvingSnodgrass - Oct. 21, 1998 - 9:17 AM PDT
The government started its antitrust suit against Microsoft on Monday. The prosecution's opening statement centered on Bill Gates, and attempted to discredit him. MS responded on Tuesday.
Is MS guilty of antitrust violations? Or are they only guilty of good business practices? Read what Slate has to say, and tell us what you think.
2. Ronski - Oct. 21, 1998 - 9:20 AM PDT
If Microsoft lied to the people it did business with, as has been alleged, it should suffer the consequences of being guilty of fraud. If it achieved an 85-90% hold on the market through legitimate means, it should be left alone.
3. CharlieL - Oct. 21, 1998 - 9:21 AM PDT
Remember:
At Microsoft, Quality is Job 1.1.
4. AdamSelene - Oct. 21, 1998 - 9:30 AM PDT
I find myself hoping that the DOJ wins, even though I detest antitrust laws, because I'd rather write to Java everywhere than to Windows everywhere.
Regardless, Gate's dominance is just as much the fault of stupid competitors as of his own ruthlessness. I don't think the world, even the software world, would have necessarly been a better place without Gates. There was a strong need for a standardized OS that vendors could write to, and Gates made Windows the standard. No one else had a clue as to how to do it - look at the current state of Unix. Apple wasn't any better, their stratagy was much more monopolitic than Gates' and they weren't nearly as smart.
Anyway - I doubt if these considerations get much air during the trial. On a strictly antitrust basis, MS is guilty as sin.
5. AdamSelene - Oct. 21, 1998 - 9:31 AM PDT
Ha ha - change "monopolitic" to "monopolistic". But the first spelling was pretty good too.
6. Super80 - Oct. 21, 1998 - 9:47 AM PDT
Regardless of the DOJ, I think MS will stumble at some point, as all monopolies do, and will lose their monopoly, and perhaps just be a dominant force.
History is littered with examples: Ford, IBM, AT&T, GE.
7. Ronski - Oct. 21, 1998 - 9:49 AM PDT
Precisely.
8. DocBrown - Oct. 21, 1998 - 9:50 AM PDT
AdamSelene, I remember those days of non-standard platforms. You could buy dozens of different personal computers, and none were compatable with each other. Also noe of them took themselves very seriously . . . who would use a TI99-A or an Atari 2600 to run a business, even though they did have sufficient computing power to do a lot of work?
As much as I hate every incarnation of the Windows OS, I hated having to choose one vendor even more. I remember recommending that a former employer invest in a Radio Shack TRS-80 Model 12. It was a good decision at the time, even though it tied him to Radio Shack. Radio Shack was as good a vendor as anyone else.
As I see it, the justification for the suit is that Microsoft is trying to undo all the good it did for us. The world standardized to the Windows platform because it was supported by so many software vendors. Now that it is the standard, Microsoft has made moves to eliminate all those other vendors. It's bait-and-switch on the grandest scale!
9. Raskolnikov - Oct. 21, 1998 - 9:52 AM PDT
I don't think the question is so much over whether they gained their huge OS market share with legitimate means, but whether they leveraged that market share to crush a competitor in another market (Netscape). From the evidence I have seen, they did.
10. JoeTiernan - Oct. 21, 1998 - 10:04 AM PDT
Hey, readers, this is the thread to get through to the boss-of-all-bosses. Being in corporate PR, I know either Gates or his chief readers will give it a look.
HEY BILL GATES: READ THIS.
First, continue the fight against the federal government and I hope you win. They are just jealous of your success and want the money. I don't know why people like Microsoft, but they do. Enough said.
The real reason I'm writing this is to tell you why Slate is dying and what you can do about it. Do you read the magazine and its fray? I suggest you lower (or cancel) the subscription price to those people who already are MSN members. Slate should be part of the $20 a month that we pay you already. Or, use a MSN foundation to underwrite the cost. Do it soon.
11. Ronski - Oct. 21, 1998 - 11:18 AM PDT
Well, if Bill Gates actually gets wind of what goes on here (and I'm not sure he will bother), tell him to stop giving money to liberals who are jealous of his success and become a candidate for the Libertarian nomination for president in 2000. Make it an interesting race.
12. Raskolnikov - Oct. 21, 1998 - 11:19 AM PDT
Bill Gates as President? Why would he voluntarily take a demotion?
13. JJBiener - Oct. 21, 1998 - 11:27 AM PDT
Raskol - "Why would he voluntarily take a demotion?"
Because he already more money than God and he needs a new challenge?
14. elliot803 - Oct. 21, 1998 - 11:27 AM PDT
There was a "Nightline" show about this the other day. The consensus of the industry and legal analysts interviewed seemed to be that Microsoft's domination is a real problem for competitiveness and is not in the long-term interests of the consumer, but that it's unclear what the best response is. None of them seemed to favor doing nothing, though.
15. Ronski - Oct. 21, 1998 - 11:28 AM PDT
Rask,
Revenge.
16. AdamSelene - Oct. 21, 1998 - 11:28 AM PDT
Bill? A Libertarian? Whatever gave you that idea? I would be that he's republican through and through.
17. Ronski - Oct. 21, 1998 - 11:29 AM PDT
Adam,
Actually, he has a record of making political donations to liberal Democrats, I have been told.
18. JJBiener - Oct. 21, 1998 - 11:30 AM PDT
I bought an anti-trust suit once. Whenever I wore it, no one would turn their back to me.
19. AdamSelene - Oct. 21, 1998 - 11:32 AM PDT
elliot,
The best response for my money is the suit over Java infringement by Sun. MS is in clear violation of their agreement and should be made to bring their Java implementation in line with the intent of that agreement (which was clearly OS independence.) Of course, Sun has made monumental mistakes with Java by not turning it over to an independent agency, but it's still the most credible threat to the Windows' monopoly.
20. Super80 - Oct. 21, 1998 - 11:34 AM PDT
Here's a joke:
God called together Boris Yeltsin, Bill Clinton and Bill Gates. He said "I have gathered together the three most powerful men in the world to let you know the world is going to end in five days."
Yeltsin returned to Russia and announced "I have reaaly bad news; there is a God and the world is ending in five days."
Clinton returned to the US and announce "I have good news and bad news; the good news is there is a God and the bad news is the world is ending in five days."
Bill Gates returned to Microsoft and announced: "Ihave really *great* news. I am one of the three most powerful people in the world and we don't have to worry about that year 2000 problem."
21. Slackjaw - Oct. 21, 1998 - 11:39 AM PDT
Another permutation of this debate? Capital.
Ronski (Message #2): would you briefly explain why you favor free market allocation over alternatives?
Selene: I have seen your posts in SciTech, but I haven't had a chance to respond yet because at the moment I'm busier than a one legged man in an ass kicking contest.
22. AdamSelene - Oct. 21, 1998 - 11:40 AM PDT
I have good news and bad news for you guys.
The bad news: Bill Gates *is* god.
The good news: Earth is still in the beta release.
23. Random - Oct. 21, 1998 - 12:08 PM PDT
Only a Clinton DOJ would be stupid enough to instigate such a legal
action because they are greedy money grubbers who plan to live off
someone's efforts all their lives.
These breakups of monopolies, so
called, have never, never produced anything that benefited the
consumer. AT&T,IBM were great companies that benefited everyone.
24. Ronski - Oct. 21, 1998 - 12:10 PM PDT
Slackjaw,
It almost always comes down to a moral issue for me, the belief that no one should initiate force against another except to protect life, liberty and property (speaking ideally). I know you are familiar with the concept.
If a company is not using force or fraud to gain a market share, I do not see the harm in its crowding out the competition. It will probably, as has been posted earlier, "stumble," that is, lose market share through its own misjudgments, or through niche competitors eventually gaining strength.
Please comment. Thanks.
25. Raskolnikov - Oct. 21, 1998 - 12:16 PM PDT
I'm pretty happy with the break up of ma bell. The American telecoms industry has been very lively since the break up, weekly phone calls from MCI notwithstanding.
26. Ronski - Oct. 21, 1998 - 12:19 PM PDT
Rask,
The phone calls are enough for me to hate the breakup.
27. AdamSelene - Oct. 21, 1998 - 12:42 PM PDT
Ronski,
As one libertarian to another - don't expect to get anywhere with the economists here on free market benefits. They'll acknowledge that the free market is valuable but that it needs regulating to maximize productivity or utility or something or other.
If you're a principled libertarian, you have to be willing to settle for non-optimal market situations in some cases or concede to some regulation.
That is, unless you're ready to present a complete restructuring of legal and economic life that's never been tried before. The best one I've seen so far is David Friedman's "Machinery of Freedom."
28. CalGal - Oct. 21, 1998 - 12:48 PM PDT
Adam,
Remember: "coordination is inevitable". (g)
29. Ronski - Oct. 21, 1998 - 12:50 PM PDT
Adam,
Thanks. I have gathered that. I agree with you. In a sense, I am always of two minds, the philosophical, and the practical, and will accept incremental change. But I do believe the problem with our philosophy is that change is needed across the board, so to speak, for the new system (really an old system) to work. Still, keep the faith, and kind regards.
30. AdamSelene - Oct. 21, 1998 - 12:52 PM PDT
CalGal,
Of course, inevitable can take a very, very long time! *g*
Just to be totally clear, I could care less about Gate's monopoly. I'm just pissed that Windows is such a lousy product and that his competitors don't have enough brains to unseat it.
31. AdamSelene - Oct. 21, 1998 - 12:59 PM PDT
Errata to Message #19,
Actually, Apple's unexpected success with their new iMac might, just possibly, pave the way for their next OS (a combination of the old Mac OS with Rhapsody/Next) to supplant Windows. It's still only a marginal possibility, but it's the most likely alternative next to Java.
32. proudnerd - Oct. 21, 1998 - 1:06 PM PDT
AdamSelene, Message #30
Windows rode the popularity of IBM PC clones on its way to success, an obvious marketing success. Besides, most serious programmers consider the PC to be an inferior programming challenge.
33. Raskolnikov - Oct. 21, 1998 - 1:11 PM PDT
"faith" about covers it. There is little other basis for an unfettered free market. Since Slack isn't here, I'll take a stab at it. The "harm" in monopolies stems from the market effects of no competition. The monopoly is free to charge a higher price than they would have in the presence of competition (note how the upgrade to Win98 costs twice as much as Win95, considering that is only a slight upgrade). Also, monopolies have efficiency problems of their own. Once competition as a driving factor is removed, there is little to punish organizational waste and inefficiency. However, an OS can be called a "natural monopoly", where the market actually benefits by having one company control it (no need to duplicate your product for 15 differen OSs, for instance).
The argument against Microsoft is that they are using that monopoly unfairly and illegally. That they are leveraging their OS monopoly into gaining monopolies in other markets where natural monopolies do not exist. The damage here is that the inefficiency problems of their OS monopoly will now spread to these new markets as well. Having Microsoft monopolize the Browser market as well as the OS market would also give them leverage to supress potential ends to their OS monopoly (like JAVA).
The government is arguing that Microsoft does things like offering AOL equal billing on the Microsoft desktop in exchange for making Internet Explorer their default browser (AOL was previously defaulting to Netscape), and other practices where they are using their OS domination unfairly.
34. proudnerd - Oct. 21, 1998 - 1:13 PM PDT
AdamSelene, Message #31
I would hedge my bet on Linux.
35. Raskolnikov - Oct. 21, 1998 - 1:18 PM PDT
Short of government intervention, I will be very surprised if anything brings down the Microsoft monopoly any time soon. They have consistently taken on all comers and have shown a very impressive ability to turn their business strategy around on a dime. I don't see them succumbing to hubris any time soon, except possibly for hubris in thinking they can ignore anti-trust laws.
36. proudnerd - Oct. 21, 1998 - 1:31 PM PDT
I look at the DOJ lawsuit this way - Irrespective of who wins the case, if it succeeds in making Microsoft reluctant to browbeat PC manufacturers planning to install alternative OSes, I would consider it to be a successful culmination of the lawsuit. Have no doubt, given a level playing field, technical excellence will eventually prevail over monopoly of mediocrity.
37. AdamSelene - Oct. 21, 1998 - 1:46 PM PDT
proudnerd,
Windows didn't ride the popularity of the PC clones - they CREATED it! Gates intentionally decided to write to a set of cheap, standard chips because he knew that the cheaper the pc, the more buyers for his software. Not like stupid Jobs at Apple who tried to hog everything for himself (hardware AND OS). Gates wisely fostered competition between the clonemakers to drive down hardware prices so that he could sell sell sell sell.
Not to mention, he sacrificed a lot of potential OS enhancements to keep backward compatibility and keep his clients happy. Jobs --- every operating system was incompatable with the previous. He just couldn't keep his head out of his A**.
38. AdamSelene - Oct. 21, 1998 - 1:50 PM PDT
proudnerd,
I consider myself a serious programmer. Windows is arguably a bigger challenge than unix to write good code for!
I don't think Linux will do it. There's no single company with enough at stake to push it hard enough. The next big OS will either come from the pc world (only they have the volume to make it happen) or through an OS-independent source like Java.
39. Ronski - Oct. 21, 1998 - 1:55 PM PDT
Rask,
Thanks for your posts. I understand the value of competition and the idea of natural monopoly; but what is the government claiming is "unfair" about the example you cite, i.e., AOL.
40. Msivorytower - Oct. 21, 1998 - 1:58 PM PDT
From the header.....
"Is MS guilty?"
I simply want to state, unequivocally.....
Yes, of course I am.
41. AdamSelene - Oct. 21, 1998 - 2:00 PM PDT
LoL!
I always knew it!
Uh... of what?
42. Super80 - Oct. 21, 1998 - 2:00 PM PDT
MsIT,
I saw that too!
43. Raskolnikov - Oct. 21, 1998 - 2:02 PM PDT
Ronski, they are leveraging their OS monopoly. Every copy of Windows comes with AOL's icon on your desktop. They offered this deal in exchange for having AOL use IE as their default browser. Netscape, not having an OS, could not match Microsoft's offer. To me, this is clearly an example of leveraging their OS monopoly to attack another market, which is illegal.
44. Raskolnikov - Oct. 21, 1998 - 2:06 PM PDT
I think technically, it is leveraging a monopoly in one market to get a monopoly in another market, but I would rather the DOJ act now rather than wait until the competition is bankrupt.
45. Raskolnikov - Oct. 21, 1998 - 2:35 PM PDT
For future reference, here is the address to the DOJ's complaint:
http://www.usdoj.gov/atr/cases/f1700/1763.htm
The root directory for all their US v. Microsoft documents is:
http://www.usdoj.gov/atr/cases/ms_index.htm
There is a host of information for all this available on the net. Evidently the "cannot use monopoly in one market to leverage a monopoly in another" rule was set up in US v Griffith.
46. PseudoErasmus - Oct. 21, 1998 - 3:48 PM PDT
Ronski
I have already demonstrated that (any form of) libertarian ethics is incoherent rubbish, internally inconsistent and self-contradictory, except in its extreme and unworkable form of anarchocapitalism. Pretty soon, you will be able to catch my remarks to this effect in the Fray Archives.
Besides, the psychology of libertarians is such that they (consciously or unconsciously) avoid the contemplation of the real world by imposing on it a simplistic mechanical ethics. I mean, who cares about difficult choices or optimal solutions for society if they can't by definition ever matter in your ethical framework?
47. AdamSelene - Oct. 21, 1998 - 4:21 PM PDT
Ha ha ha. You never get it, do you, PE? Your definition of optimal *precludes* libertarianism.
Anyway, check out my comments about moralty and evolution in the SciTech thread.
48. PseudoErasmus - Oct. 21, 1998 - 4:24 PM PDT
"Ha ha ha. You never get it, do you, PE? Your definition of optimal *precludes* libertarianism."
No shit.
"Anyway, check out my comments about moralty and evolution in the SciTech thread."
I have been following it. The comments don't help you. You are incapable of differentiating between positive ethics and normative ethics.
49. AdamSelene - Oct. 21, 1998 - 4:44 PM PDT
PE,
And you, my friend, are incapable of differentiating between debate and slander.
50. verdeazul - Oct. 21, 1998 - 8:33 PM PDT
Fugetaboudit! Antitrust my Aunty's Ass...MightySoft in general and "Trey" Gates in particular, are guilty of far more than simple Geek Thuggery! We shall soon realize that these goons are really guilty of the wilfull and wanton impeding of The Progress of All Humanity!
Anyone with half a brain can see that but for Gates and his Retro OS, mankind would have colonized all of the inner planets by now and that each colony would have the OS best suited for that planet! Mars Colony would have the Mac OS (something "fun" and "elegant". You need that on a really boring red desert so's the colonists don't go gouging their eyes out with joysticks). Venus, of course, would be running the Be OS (You better be able to be doin' 16 different things at the same time AND keep the air conditioning going to make it there!)
Now Titan Colony would have some kick-ass UNIX work stations with macho, command-line interfaces just to make sure that the pumps and generators keep turning over...and so on and so forth.
Only Mother Earth is forgiving enough to sputter along on Windoz - forever (or until Y2K, mebbe, when Time itself, just might start moving backwards).
futurezul~
51. AdamSelene - Oct. 21, 1998 - 8:40 PM PDT
I don't know whether to be green with envy our just blue over that last post....
52. JJBiener - Oct. 21, 1998 - 11:12 PM PDT
Zul - LOL! The image of Mother Earth staring at the Windows BSOD is just TFFW.
53. proudnerd - Oct. 22, 1998 - 1:45 AM PDT
AdamSelene, Message #37
"Windows didn't ride the popularity of the PC clones - they CREATED it! Gates intentionally decided to write to a set of cheap, standard chips because he knew that the cheaper the pc, the more buyers for his software."
I disagree. Gates was smart to see where the market was going. But the credit for the popularity of the PC clone must go to the utter stupidity of Jobs. Gates just tagged along.
54. proudnerd - Oct. 22, 1998 - 2:16 AM PDT
AdamSelene, Message #38
"Windows is arguably a bigger challenge than unix to write good code for!"
Why ? Because your development machine doesn't stay up long enough to do any reasonable debugging ? In any case, I was merely commenting on the architectural aspect of the PC - single CPU, straightforward Von Neuman, banal I/O architecture make it a rather uninteresting machine to solve interesting computational problems.
"I don't think Linux will do it. There's no single company with enough at stake to push it hard enough. The next big OS will either come from the pc world (only they have the volume to make it happen)"
Linux *is* the next big OS from the PC world. Look out for Redhat. With backing from Intel and Oracle, it has already entered corporate IT departments. As for the numb-brained ones who care about GUI/desktop crap, they will have to wait till GNOME is released. There are some very smart people working on it and being a freeware, it has had the advantage of lot of peer reviews during development.
55. proudnerd - Oct. 22, 1998 - 2:37 AM PDT
verde Message #50
ROTFL....
OK, now I am off to prepare for my impending relocation to Titan...
56. AdamSelene - Oct. 22, 1998 - 5:40 AM PDT
proudnerd,
Well, that's certainly one reason, *g* (Windows doesn't stay up long enough to do debugging.)
"As for the numb-brained ones who care about GUI/desktop crap, they will have to wait till GNOME is released. There are some very smart people working on it and being a freeware, it has had the advantage of lot of peer reviews during development."
Well, the only ones who really care about GUIs are the end-users. And who cares about them, right?
Freeware is NOT an asset. Who does your tech support? Will Claris and Adobe and Peachtree and ad nauseum write software for Linux? Sure, Linux may be great for net servers and maybe even DB servers, but who's writing the front office apps? Besides, I wouldn't bet on anything Oracle pushes - they're fighting for their life against Sql-Server. Don't make the techie mistake of thinking the best technology always wins. There are only three serious 3 assetts in business software - installed base, installed base, and installed base.
I may be wrong, of course, we'll have to wait and see. But I would bet that Linux does a pretty good job of unifying most of the Unix world (what's Sun's stance? HP?), but Unix doesn't even have a toe-hold in the front office apps, much less in the home market. Seen anyone porting Quake or Descent to Unix lately?
57. AdamSelene - Oct. 22, 1998 - 5:48 AM PDT
proundnerd,
"I was merely commenting on the architectural aspect of the PC - single CPU, straightforward Von Neuman, banal I/O architecture make it a rather uninteresting machine to solve interesting computational problems."
What kind of problems do you work on? You must be either write chip microcode or compilers, right? That, or DoD apps.
58. AdamSelene - Oct. 22, 1998 - 5:51 AM PDT
*cont*
Because you obviously don't write device drivers or game graphics. If you did, you'd find lots of very interesting problems in dealing with multiple buses, 2 levels of cache, massive 3d graphics's card chips with SIMD instruction sets, etc. Have you looked inside a PC lately? It's not your grandmother's design anymore.
59. tmachine - Oct. 22, 1998 - 6:42 AM PDT
This seems to be the right thread to give my husband Henry Ehrlich's new book a plug. It is called the Wiley Book of Business Quotations, and it has numerous Bill Gates and Microsoft quotes. But why believe me, his biased wife? Merely go to this terrific review in today's Houston Chronicle on line and see for yourself:
Barlow/Houston Chronicle
I hope no one minds my advertising it here but it's really really good! and Wiley isn't giving it much of a real advertising budget, so I'm helping out. You can also order the book from amazon.com!
60. tmachine - Oct. 22, 1998 - 6:45 AM PDT
and here is the link to the book at amazon.com:
Wiley Business Quotations/amazon
61. Ronski - Oct. 22, 1998 - 6:46 AM PDT
I love this thread. Thanks to everybody for your posts. I come to the Fray to learn what other people think about issues that interest me, and why. In that vein:
Rask,
Thanks for the sites. Leveraging is illegal, but should it be? What if leveraging does not result in a total monopoly? And how do you define monopoly? A 100% domination of the market? 98%? 85%
PE,
I look forward to the additions to the Fray Archives. I hope you never lose your interest in critiquing libertariansim.
Adam,
Keep fightin'.
62. Msivorytower - Oct. 22, 1998 - 6:50 AM PDT
I agree with Message #53. Gates chose the right side to be on in this market. In fact, Apple was as much to blame for the expansion of MS as Gates own aggressive drive to capture market. Gates was willing to do whatever it took to create compatability, Apple actively BLOCKED it with proprietary behavior.
I am actually surprised the company (Apple) is still in existence today, I'd predicted it's failure 5 years ago. Too little, too late.
TM
Thanks for the tip, I'll check it out. And we MUST always help fraygrants in their endeavors.
63. tmachine - Oct. 22, 1998 - 6:56 AM PDT
thanks MsIT!!!!
64. AdamSelene - Oct. 22, 1998 - 7:28 AM PDT
MsIt,
Well, it's hard to know exactly how to apportion credit/blame, but it took both Gate's business sense AND Jobs greed for MS to trounce Apple so thoroughly.
My first commercial software sale was built on an Apple IIE while I was still in school. When the Macs came out, and they weren't even close to compatibile with the earlier Apples, (Not to mention Lisa...), I dropped Apple like a hot potato.
Of course, you can't trust *my* track record. I then spent 5 years programming on Symbolics Lisp machines!!
65. Msivorytower - Oct. 22, 1998 - 7:36 AM PDT
Selene
Yes, Jobs didn't even promote compatibility with his OWN products. Such a stupid move from an otherwise bright man.
No need to apportion blame, the excitement of markets is that many things come together to move it, pivotal events that seem unconnected eventually come to be seen as interdependent in setting conditions for its evolution.
66. JaDeGoLd - Oct. 22, 1998 - 7:45 AM PDT
However, it should be pointed out that once Gate's achieved market domination with his OS, he effectively crushed all DOS-competitors with unfair marketing practices. I refer to Dr. DOS and the Windows flap.
67. AdamSelene - Oct. 22, 1998 - 7:52 AM PDT
Yep. Gates is definitely guilty of killing the goose with the golden eggs - witness the topic of this thread.
It's too bad that his early competitors were so slow on the uptake. Anyone remember GEM? (A good GUI built on DOS When Windows 2.0 was still in beta.) Gates' competitors were always worried about building better products, silly things. Gates was worried about building empires.
68. Raskolnikov - Oct. 22, 1998 - 8:29 AM PDT
Ronski: Considering that control over the browser will have ramifications on the establishment of JAVA and the rise of any real alternative to the natural monopoly of Windows, I think in this case, leveraging is quite important and should be illegal.
As to how you define monopoly, I am in over my head (Slackjaw, check your pager). I recall something about a Hirschfield (?) index which looks at the market share of various competitors, but I seem to remember that this is on its way out in favor of some more flexible standard which considers market share as well as barriers to entry.
But I don't think even Microsoft disagrees that it is a monopoly.
69. DocBrown - Oct. 22, 1998 - 8:29 AM PDT
Bill Gates would probably be more popular with the public if he had taken a lesson from Henry Ford. Ford was determined to build an empire, sell to the masses, and push the limits of quality all at the same time. IMO Microsoft is an abysmal failure when it comes to quality. With one exception, (IBM's home made DOS) every single OS that I have ever used that had glaring quality problems came from Microsoft.
Henry Ford had many flaws, but at the height of his empire I would say that he enjoyed much more popularity with the public than Gates has ever had. I don't want to get off on a tangent, but when his popularity peaked Ford could and did exert influence over the government that is beyond Gates' wildest dreams.
Ford's popularity certainly wasn't a product of his personality! It came from the outstanding quality of the Model T. Back then millions of people loved and cherished their Model Ts.
Does anyone love and cherish Windows?
Personally, I am just nerdy enough that I have grown attached to a few select programs over the years. None of them came from Microsoft.
70. AdamSelene - Oct. 22, 1998 - 8:34 AM PDT
Raskolnikov,
Read the link for this thread. Microsoft most definitely claims that they are not a monopoly - that's their primary defense!
71. Raskolnikov - Oct. 22, 1998 - 8:37 AM PDT
Adam: Maybe you could quote what you are referring to. I don't see that argument at all. What MS seems to be arguing to me is that the browser is a natural extension of the OS, and thus they are not leveraging their OS monopoly, they are just improving the OS.
72. AdamSelene - Oct. 22, 1998 - 8:38 AM PDT
Doc,
The only programs I've grown attached to are those I've written. And perhaps a couple of development environments.
That is, if you discount Quake and the original Doom!
73. Ronski - Oct. 22, 1998 - 8:39 AM PDT
Ford also gained popularity by refusing to lower wages as the Depression deepened, but this behavior, and the the fact that he purposefully influenced other business people to do the same, as Hoover wished, may have kept many folks out of work entirely.
74. AdamSelene - Oct. 22, 1998 - 8:49 AM PDT
Rask,
You have to follow the link to the msnbc trial coverage site to find this quote:
"WHAT ARE THE OTHER KEY ACCUSATIONS? GOVERNMENT: Microsoft is a monopoly.
MS RESPONSE: Because production costs are so low, at any time in the software business, one person can create an operating system — like Linux — which can become a competitor overnight."
75. Raskolnikov - Oct. 22, 1998 - 8:49 AM PDT
By the way, here is the best overall resource site on the subject I have found so far:
http://www.findlaw.com/01topics/01antitrust/microsoft.html
I do stand corrected. In their response to the DOJ complaint, they do deny that they are a monopoly, but this has not been a significant part of their defence, from what I have seen.
76. DocBrown - Oct. 22, 1998 - 9:07 AM PDT
Adam,
Some of my fondest programs are games, too. But I also have a soft spot for good old Lotus 1-2-3 and Borland's original Quattro. We've been through a lot together. My other favorites were from the TRS-80 Model 1. It had a BASIC compiler called Z-BASIC that was great.
77. windsor - Oct. 22, 1998 - 9:29 AM PDT
As far as Ford is concerned, it's interesting that now, years after his death, he's preached in schools all over the US as a Great Man of History... despite the fact that he gave significant funds to the Nazi party in Germany and was an anti-semite...
What will the future say about Gates? Will he be exonerated? I doubt it. I think he'll go down as a dog that had his day, but was all flash, no substance. Unlike Ford (for whom we give credit for the production line), Gates has produced nothing noteworthy. Only money -- and that, like King Tut, only leaves a legacy of empty opulance.
78. Ronski - Oct. 22, 1998 - 9:33 AM PDT
windsor,
Fortunately, most people do not forget to mention Ford's bigotry; it's well known.
Never again.
79. Msivorytower - Oct. 22, 1998 - 9:40 AM PDT
Now this is ridiculous.
Gates has made some serious contributions. For one, regardless of the quality of windows, the damn thing did help fuel the massive expansion of PC's in business and homes, has fostered an environment where greater advances are being made all the time in the computer industry, has contributed to a massive increase in affordability and ACCESSABILITY to computers and their benefits to the vast majority of non-techie consumers.
The internet would NOT be what it is today without this massive expansion of PC's that has occurred. And I'm not just talking about the expansion that occurred in the 80's, where "smart" people had their computer as a home toy. The expansion that has taken place in the 90's has truly penetrated the way "average" people use technology in their lives.
IMO, that would not have happened if Apple had remained unchallenged, or if IBM had NOT made it's Satan Pact with Gates.
Finally, the growth of the computer industry (of which Gates is smack in the middle of) and it's requisite satellites (software, internet, etc) has been one of the major components of the long economic expansion we've been enjoying for the last 6 years.
80. DocBrown - Oct. 22, 1998 - 10:53 AM PDT
Msivorytower, I would never downplay Gates' contribution to PC expansion. Indeed, I praised the standardization he facilitated in an earlier post.
Right now Gates could use a dose of super-popularity, and he isn't getting it. When Henry Ford needed popularity with the masses he got it. His clout helped bootstrap America's roads up to a level that competed with Europe's at a very rapid pace.
Windsor, Ronsky, did anyone say that Ford was a good guy?
Gates' morals are probably more in tune with the mainstream than Ford's ever were. But it's not fair to simply call Ford an anti-semitic Nazi bigot. His sociological agenda was totally bizarre, way beyond classification. He was in a league of his own.
81. proudnerd - Oct. 22, 1998 - 11:40 AM PDT
AdamSelene Message #56
"Well, the only ones who really care about GUIs are the end-users. And who cares about them, right?"
I am glad that you noticed the dab of sarcasm in my comment. Traditionally this attitude of the techies has contributed to the widespread medicrity we see in the desktop market.
"Freeware is NOT an asset. Who does your tech support? Will Claris and Adobe and Peachtree and ad nauseum write software for Linux? Sure, Linux may be great for net servers and maybe even DB servers, but who's writing the front office apps?"
Wrong. Freeware *can* be an asset with the right amount of corporate backing. You are darn right about tech support, IT managers need somebody to sue when something goes wrong. It is quite possible that with the recent infusion of investment from Intel and Netscape, Redhat will be able to prop up its tech support. There are front-office apps available on linux, StarOffice is one example. Adobe softwares are already available on linux. There are plenty of other softwares/games available on linux too.
"Don't make the techie mistake of thinking the best technology always wins. There are only three serious 3 assetts in business software - installed base, installed base, and installed base."
You are exactly right. However considering the current growth rate, market penetration, recent publicity, corporate backing *and* technical excellence, linux is the best bet as a competetion to shitty fares doled out by Microsoft.
82. verdeazul - Oct. 23, 1998 - 12:53 AM PDT
Flash! Gates has just signed a contract for the construction of a,"Scrooge MacDuck" type swimming pool on one of the vacant acres inside his palacial "fortress" in Redmond, Washington.
Sources close to Chairman Trey
have stated (off the record) that he plans to drain and refill the pool with about $3,000,000,000.00 in fresh cash. once a week.
zulosranchero~
83. Slackjaw - Oct. 23, 1998 - 1:17 AM PDT
I'll post more later, but for now I wish to express my strong disagreement with the claim that any native of Indiana, even the hillbilly parts, speaks with Southern drawl. It's a profane emanation that lacks any musical quality one finds in Southern speech. The writer of the dispatch must be a Northerner.
84. Slackjaw - Oct. 23, 1998 - 2:16 AM PDT
In an early post, Rask did a fine job of explicating the troubles an economist might see with a "traditional," 1-shot monopolist who knows only the market demand curve it faces. I would only point out that the actual deadweight or welfare loss comes not from the price increase per se, but the restriction in quatity traded (think of the limiting case of perfectly inelastic demand, where a monopolist has a huge effect on price, none on quantity, and none on total surplus). Also, if the monopolist is a seller of durable goods and exists for a long time, or if the monopolist actually knows the price at which some individual buyers are indifferent between consuming some and consuming none of the good (i.e., individual demand curves, or at least reservation values), then some of the deadweight loss is abated, although distributional issues pop up in the latter case--namely, all gains from trade are extracted, but the monopolist gets them all.
There are many indices of monopoly power--the Justice Department's "C-4" index, the Lerner index, the entropy index, and the Hirfindahl index are among the most popular. All involve some permutation of a firm's market concentration, defined as a firm's share of the quantity sold in a market (and thus all obviously depend on the definition of a market). E.g., the Hirfindahl index is the sum of the squared concentrations of each firm in the market. The C-4 index is the sum of the concentrations of the 4 largest firms in the market; if that sum is above .85, DOJ keeps an eye out.
85. Slackjaw - Oct. 23, 1998 - 2:16 AM PDT
That said, who cares if MS fits some definition of monopoly, according to this index or that? Haven't you people ever heard of oligopoly or vertical restraints? The reason antitrust law exists is to prevent action in restraint of trade, which I construe as deviating from competitive equilibrium. Leveraging does that, is socially wasteful, and should be illegal--which is to say, if it becomes wasteful on a grand scale (where scale is defined relative to the resources available to antitrust authorities), we reserve the right to make you stop.
Selene is probably right, Ronski--I am a consequentialist about these things and we're probably not going to get very far. I like markets because of the outcomes they are often capable of generating, not the moral unimpeachibility of the process. (Actually the famous efficiency results for market equilibrium are remarkably fragile in some obvious and some very subtle ways. Consequentialist support for free markets is probably best derived from an argument similar to Krugman's in support of free trade: it's theoretically possible to do better, but the informational and political demands probably make it impossible in reality.)
(cont.)
86. Slackjaw - Oct. 23, 1998 - 2:17 AM PDT
However, if you wish to make a moral argument, stick to it. Don't give me this backdoor folk-wisdom efficiency argument, like from Message #24: "If a company is not using force or fraud to gain a market share, I do not see the harm in its crowding out the competition. It will probably, as has been posted earlier, 'stumble,' that is, lose market share through its own misjudgments, or through niche competitors eventually gaining strength." It is easy to show that there are conditions in which this is not true. One of them is increasing returns to scale, or so-called non-convex technology (because the set of things a firm can produce given its inputs is not convex). I think non-convexity is a reasonable assumption in this case, because of coordination economies: the more people use a given OS, the more valuable it is to a consumer. Contrast this with, say, the choice of a cola.
In any case, even if your backdoor argument is true, there is a real welfare loss between now and when the stumble actually occurs.
87. Ronski - Oct. 23, 1998 - 5:26 AM PDT
Slackjaw,
Thank you for your posts. You have pointed me in a useful direction for further study. I'm very happy to stick to the moral argument, but I will endeavor to learn the extent of the welfare losses that accrue in these situations, to see how substantial they may be. While I think the moral issue is paramount, I am concerned about real-world effects, even if, as has been alleged in the Fray, some libertarians are not. Regards.
88. varrius - Oct. 23, 1998 - 3:52 PM PDT
From today's report from Michael Lewis:
"In any case, it didn't take him [Microsoft attorney John Warden] long to prove that technology doesn't sound nearly as impressive when it is discussed in a booming hick drawl. As he boomed on about "Web sahts" and "Netscayup" and "the Innernet" and "mode ums" he made the whole of the modern world sound a little bit ridiculous."
What kind of elitist slam is that? Mr. Lewis needs to drive only 30 miles west from the DC courthouse to find a place where the natives do talk just like Mr. Warden. That area includes the new headquarters for America Online (with lots of mode ums), the under-construction gargantuan technology campus for MCIWorldcomUUNet, and countless other technology and telecommunications leaders who were at the core of building the Innernet while Bill Gates was still programming Altairs. You don't have to talk like a blue-blood Harvard drop-out to know technology.
89. HCaulfield - Oct. 23, 1998 - 4:08 PM PDT
AdamSelene (#56) "Sure, Linux may be great for net servers and maybe even DB servers, but who's writing the front office apps?"
You mean, like these guys? (I can point you to others.)
90. AdamSelene - Oct. 23, 1998 - 4:59 PM PDT
HCaulfield,
Thanks. So who's buying this stuff? How do they advertise? Any info on their market share? (Gotta be less than 1% of MSOffice sales.)
Regardless, I guess I need to read more than Windows Mag, ZDNet, and Neural Networks Journal. I'd never heard of Applixware.
91. AdamSelene - Oct. 23, 1998 - 5:30 PM PDT
Well, well, well. Looks like Linux is poised to attack. Very interesting.
The case for linux. (internet world)
Red Hat Linux review
The little OS that could.
Linux applications.
Linux home site.
Red Hat Software.
92. HCaulfield - Oct. 23, 1998 - 6:12 PM PDT
Adam -- I can't answer any of your questions. Of course, who can doubt that the market share for competitors is low when M$ says to hardware vendors, "You want to sell windoze? No prob, as long as you PRE-INSTALL IT ON EVERY BOX YOU SELL."
Oh, I forgot. That's not illegal, it's just "healthy competition."
BTW, I downloaded my suite for free from here.
93. proudnerd - Oct. 23, 1998 - 7:27 PM PDT
AdamSelene Message #90
"I guess I need to read more than Windows Mag"
Come on, you could do better than reading that piece of Goebbelsian trash-rag.
"Any info on their market share? (Gotta be less than 1% of MSOffice sales.)"
According to the applixware website, they have had 400,000 downloads. Anyway, marketshare of applixware is directly linked to the size of the install base of linux.
Years back when linux was in its infancy, two problems hindered its gaining popularity amont non-expert users -
(1) It didn't have a GUI based desktop software.
(2) It lacked applications to go with the OS.
There will be a full fledged desktop Gnome available soon (Free and GPLed). Another called KDE is already availble. Plenty of applications from " Corel ", Oracle , Netscape etc. are already available.
Only a claptrap propagandist rag like the Windows magazine would have us believe that these things don't exist. BTW, they also believe that multitasking is a useless feature for an OS.
The question we all should be asking is - Will Dell and Compaq have the balls to make pre-installed linux PCs available for customers who don't want chickenshit software from M$ ? This is why I think the browser issue is trivial compared to M$'s OEM vendor deals.
94. proudnerd - Oct. 23, 1998 - 7:40 PM PDT
AdamSelene Message #91
The correct link is linux home site .
95. AdamSelene - Oct. 23, 1998 - 8:17 PM PDT
oops - sorry. My infamous misspelling strikes again.
Anyway - it's a long way from good product to successful product and from "available soon" to market penetration. I hope Linux can do it. Next time I'm at CompuUsa I'll see what linux apps they're stocking. *g*
FYI, I used to hold the same hope for Java. The problem there was Sun's stupidity (not unlike Jobs'.) It's possible that the wide developer base may do the trick for Linux. We'll know soon enough. Anyway - it looks like a good product. Everyone savy enough to care should check it out.
96. viewpoint - Oct. 23, 1998 - 8:57 PM PDT
The very funny dispatch from the trial and the equally entertaining Readme comments on it were well worth my 39 cents for this week.
97. miykal - Oct. 23, 1998 - 10:30 PM PDT
No
98. AdamSelene - Oct. 24, 1998 - 6:22 AM PDT
Now, this looks *really* intersting:
Java For Linux.
99. jonnichols10 - Oct. 24, 1998 - 10:18 PM PDT
I have difficulty with the definition of the word "monopoly". How do we distinguish between a business which has the majority of market share because of government restriction to other companies entry into its market, ie the East India Tea Co, and perhaps today, the Post Office, or the Social Security System, and a company like Microsoft which got its market share in a completely open market? Or is this distinction worth making?
I, of course, think there is an enormous difference, and in the first instance ( government preferences ) which is a true monopoly, the restrictions should be abolished, and competition introduced by any company who wishes to get into this market,without any limitations. In the second instance (Microsoft) I have confidence the market does not need any help from the same government who does not seem to be able to recognize the limitations of the first senario.
In fact, this second instance, where the government "protects the public" by suing the big monopolistic company, is really nothing more or less than that of a government wishing to excerise it power; and has nothing at all to do with helping or protecting consumers. Consumers can help themselves. That is the essence of the free market.
The rub here is one either believes this or not; it is very difficult to convince a non-believer by argument. Consequently, this nonsence of "anti-trust" continues today, to the cheers only of those who have no real understanding of of how a free marketplace works dynamically, or, it seems, the competitors of the company being sued by the government. This is too bad, because in the long run they are bad mouthing the wrong entity; it's the government folks, the government whom we should be very concerned about, not Microsoft.
100. vonKreedon - Oct. 24, 1998 - 11:17 PM PDT
Does posting the 100th count any coup?
101. Slackjaw - Oct. 25, 1998 - 1:45 AM PT
jonnichols:
You're right, it is tough to convince a non-believer. So maybe I'm wasting my time here, but I'll give it a whirl.
Your typology of monopolies itself ignores some important market dynamics. An example is the ability of a firm with a monopoly in one market, which happens to be an input in the production of another, complementary good, to start producing that complement, and essentially raise the price of its input to its competitors in the complement market. More basically, ignoring other markets, perhaps we're talking about an industry in which firms have declining costs in output--the more product a firm sells, the cheaper it is to consumers. Then a competitor, unlike in the canonical market situation, cannot play if it jumps only equally as high. It must jump a few inches higher if it wishes to enter the game. The monopolist can exploit its position, perhaps for a very long time if it's clever, at the expense of consumers (I am not talking specifically about MS). This is not the same as the canonical situation, in which a firm's cleverness is necessarily to the benefit of consumers.
Markets are like dog races. They work because firms are chasing that rabbit around the track. If the dogs ever catch it, the benefits of that race are gone.
At any rate, if unfettered market operation is going to introduce competition in your second case, why do you object to a lawsuit to speed things along? It can't be because of diminished incentive for firms to reach for the golden ring as they won't be able to enjoy the reward; if your story is right, the reward is fleeting anyway. So what's the big deal? Yeah, the lawyers make a little money off the rest of us, but not so much to warrant anything more than idle barroom bitching.
*cont*
102. Slackjaw - Oct. 25, 1998 - 1:45 AM PT
Now perhaps there is some chance--not for sure, just a chance--that you are wrong, that the competition wouldn't on its own pop back up for some strange reason. Well, then there's real room for benefit from our lawsuit.
"How do we distinguish between a business which has the majority of market share because of government restriction to other companies entry into its market...and a company like Microsoft which got its market share in a completely open market?" Obviously you have some underlying story of how market competition works in the absence of government barriers. Somehow, a firm may become totally dominant in its market, only to become unseated later, or at least joined by companion firms capitalizing on the profit motive. Why don't you flesh out this story a bit? It probably has to include grave irrationality on the part of the former competitors of the temporary monopolist. We are, after all, by assumption speaking of a market in which at least several firms can profitably coexist (though even "several" may not be enough to create a truly competitve atmosphere). And, by assumption, only one firm's management had the cunning to make its firm last. (Seems like a strange distribution of managerial talent. Why didn't the failing firms' owners get some good new guys, or steal the future monopolist's top dogs with offers of untold riches? Must be irrational owners too.) It should probably include some short-sightedness on the part of future competitors. (Given someone with enough knowledge of a field to open a firm in it, why didn't they open their firm when others were dying off and before the monopolist became a monopolist?)
103. BrerLou - Oct. 25, 1998 - 2:48 AM PT
Without having done any research or reading on the subject, I find Jon's comment interesting because I was about to make an opposite comment. No one can deny that the tremendous dynamism in the communications industry,which we are all utilising here in some mesure, coincided or rather followed the break up of the monolithic Ma Bell.
I was just about to ask if there is anything unique about anti-trust legislation as compared to other laws which protect individual rights based on some concept of morality. It seems to me that anti-trust legislation is based strictly on economic pragmatism. Is the prevailing situation good or bad for the industry and therefore the economy in the long run?
If this is the criterion, we can study actual cases using economic analysis, and not even begin to consider questions of morality or even of the letter of the law. What is the underlying principle here?
Sociologists tell us that historically laws were passed basically to protect the power and possessions of the powerful, or eventually of property owners. Even welfare legislation can be seen in this light as forcing the wealthy to contribute to relieving the misery of the masses in their own interests, of preserving peace and harmony. Anti- trust legislation seems to have gone one step further, and has lost sight of the goal of protecting the powerful, and is acting purely in the interests of the more amorphous Market.
If this is so,then the considerations that Jonnycool is advancing are not really relevant. Mr Market is king, and there seems to be little doubt now that his invisible hand is not nearly so efficient or omnipotent as Jon is saying. He needs a little help from a legislature
which seems to have broken free of its traditional role of protecting property and power.
104. AdamSelene - Oct. 25, 1998 - 5:27 AM PT
Slackjaw,
"And, by assumption, only one firm's management had the cunning to make its firm last. (Seems like a strange distribution of managerial talent. Why didn't the failing firms' owners get some good new guys, or steal the future monopolist's top dogs with offers of untold riches? Must be irrational owners too.) It should probably include some short-sightedness on the part of future competitors"
Yep. That's the assumption. IBM didn't believe there was a serious market for cheap PC's, so the small manager who was dealing with Gates and DOS didn't know better than to release the resale rights. Stupid.
Jobs thought he could keep all aspects of the Mac proprietary and thus maintain a 50% profit margin forever, no matter what Gates did. Not to mention, Jobs thought he could ignore compatability between OS versions and ignore all those vendors who he forced to continually rewrite their applications. Stupid.
IBM thought that they could ignore the joint designs of a PC OS with MS and build it their way -to the point where Gates decided to opt out and build his own version of Windows. Stupid.
Sun found a viable alternative to the monolithic OS with Java. They succeeded in creating interest in the development community which caught everyone's imagination. (There are now more registered Java programmers than any other language.) But --- they refused to turn it over to an open standards committee, tried to use it to leverage their own "cheap" network PCs which cost more than "regular" PCs. Stupid.
Now, to be fair, there were a couple of extremely lucky breaks along the way. Like the two MS engineers who refused to give up and finally figured out how to make protected mode work - which paved the way for Windows 3.0 and finally 95, just when Gates was ready to throw in the towel.
But the reality is --- yes, the competition was stupid, stupider, and stupidest.
105. AdamSelene - Oct. 25, 1998 - 5:48 AM PT
Slackjaw,
"We are, after all, by assumption speaking of a market in which at least several firms can profitably coexist (though even "several" may not be enough to create a truly competitve atmosphere)."
Maybe, maybe not. MS leveraged the coordination benefits to achieve their position, despite the fact that their are indeed several "successful" operating systems out there. Gates was the only one (beside's Apple) who guessed that the big money was in consumer PCs, not IS departments, and focused on removing the mystique of the guru so that everyone could use the pc. (Of course, in so doing they stole from the best - the Mac interface, which itself was stolen from Xerox.)
The remaining OS's, VMS, MVS, etc., not to mention the various flavors of Unix, were designed by and for technologists. And even the "standardized" real OS, Unix, was ruined by the competitors who each developed their own version such that applications developed for one machine wouldn't run on the other. Not to mention the several incompatible GUI standards.
Gates' most brilliant (and maybe only) brainchild was in his decision to ONLY write the OS, recruit other software vendors to build the apps, and to do it for an open architecture that anyone could build. Thus - the hardware world began competing to build the cheapest compatible PCs, the other vendors built the apps that made dos and windows worth buying, and Gates just sat back and watched his market grow.
Of course, once his market was dominant, he began squeezing out the other application builders by dumping his own.... No one ever accused MS of having the best-of-bread in any app area. But the MS office suite worked together and was so cheap, pre-bundled even, that the niche players lost their niches.
106. AdamSelene - Oct. 25, 1998 - 5:59 AM PT
Slackjaw,
"More basically, ignoring other markets, perhaps we're talking about an industry in which firms have declining costs in output--the more product a firm sells, the cheaper it is to consumers. Then a competitor, unlike in the canonical market situation, cannot play if it jumps only equally as high. It must jump a few inches higher if it wishes to enter the game. "
I don't think this is a serious problem. Software is so cheap to build that cost isn't the issue, it's the coordination benefit that is hell to overcome. Look at Linux - basically built by one student (then extended by a world of technophiles.) But --- how do you get the app builders on board? How do you get the customers away from MS?
Here's a good analogy: compare the market for prebuilt cars vs. kit cars? (circa 1960, say, when kit cars were buildable.) Who care's if the kit car is cheaper or even better --- how many people would to take the risk of having to maintain it yourself? Well - not many did.
107. Slackjaw - Oct. 25, 1998 - 10:35 AM PT
Selene: I think I mentioned that I was addressing a more general issue than MS, but:
Message #104: Yes, everyone knows that some stupid decisions were made in this particular case. It can happen. Did I suggest this was a sufficient condition for jonnichols' story to be viable? It's not--thre is the minor defect that the conclusion of the story is false. Where is the competition capable of giving a serious challenge in this case? Right around the corner?
Message #105: "Maybe, maybe not." No, definitely--if you believe the story jonnichols is telling. If no more than one firm can profitably exist with any non-marginal market share, the competition will either not materialize or it won't mean anything vis-a-vis the exercise of monopoly.
Message #106: I don't see how this relates to what you quoted. However, the "it's no big deal" argument is probably better than the "competition is just around the corner" argument. So let's forget the latter--it's kind of lame and naive of things like coordination economies. To the former, as you said, "maybe, maybe not." I believe the important implications of MS's position are for innovation, not pricing, and really finding out the extent of the problem--maybe large, maybe miniscule--would require comparing alternative worlds, one of which doesn't exist. But the classic objections to single-market monopolists simply do not hold in this case: their base product is pretty cheap, and everybody and his dog has a PC.
108. CalGal - Oct. 25, 1998 - 11:13 AM PT
Adam,
"Gates' most brilliant (and maybe only) brainchild was in his decision to ONLY write the OS, recruit other software vendors to build the apps, and to do it for an open architecture that anyone could build. "
Actually, not true. IF you remember, IBM came to Gates to write the apps and the OS. In what was undoubtedly the last altruistic move of his life, Gates said, "Oh, no. Kildall's Digital Research is the OS company; MS does apps." IBM obediently flew down to talk to Gary, who legend has it went flying and whose wife refused to sign the NDA. Then IBM came back to Gates and Ballmer who wore ties for the occasion, shrugged, and signed the NDA.
Gates did several things that were devious and/or brilliant:
1) He lived up to the letter of the NDA early on and didn't mention to IBM that he was buying QDOS to provide them with an OS. Had he done so, given IBM's legal problems, the story would be very different.
2) Long before anyone else had come close to figuring it out, he realized the advantages of coordination.
3) He and Ballmer made the truly brilliant decision to bail out of their OS/2 deal with IBM. It is worth remembering that this was considered a huge risk at the time. All the press was wondering *when* OS/2 would overtake DOS/Windows. To wonder *if* it would wasn't even in the picture.
You nailed all the stupid decisions of others.
There was no guarantee that the business and home markets would coordinate around the same platform. This was a combination of luck, the reality of software development, and Gates being smart enough to take advantage of the opportunities that came his way.
Oh, and Adam? Software development is *not* cheap. What on earth were you thinking?
109. AdamSelene - Oct. 25, 1998 - 1:41 PM PT
CG,
Only a software developer would think software's not cheap to build. Have you priced an automoble factory lately?
110. freetochoose - Oct. 25, 1998 - 2:27 PM PT
auto factory? How about a fab plant? The growth in the cost of those is breath-taking.
111. CalGal - Oct. 25, 1998 - 3:45 PM PT
Adam,
Dig noted, bastard. (g)
I have no idea of the cost of these things. But it seems that an auto factory, once built, has maintenance costs that are a reasonable percentage of the original cost. I have no idea whether this is, in fact, true and would welcome information.
But software maintenance and enhancement, as a percentage of the original cost of development, seems very high to me.
112. freetochoose - Oct. 25, 1998 - 3:50 PM PT
CalGal
I think your point cuts against you. If annual costs are a large percentage of the startup costs, then they become a part of ongoing expenses faced by all entrants. It is when ongoing costs are LOW relative to startup costs, that the startup costs become a barrier to entry.
113. CalGal - Oct. 25, 1998 - 4:23 PM PT
FTC,
Ah. Are we only talking about barrier to entry to the OS market? No argument. Cost of development is not an issue.
I was thinking more of the costs of software development in regards to why more software companies don't port their products to other OS. Much of which is the cost of building software to run on several different OS and the cost of maintaining and supporting it. This is, it seems to me, a major factor in the barrier to entry--and its completely outside the control of the OS developers themselves.
I wasn't so much arguing that as a point--just tweaking Adam about the costs in general. Again, I'd be interested in numbers.
114. AdamSelene - Oct. 25, 1998 - 5:01 PM PT
CalGal,
I think you and Slackjaw are missing the point.
When you compare the cost of software development (and ongoing pest control) with the cost of virtually any other mass-market product - guess which is cheaper? The reason being, of course, is that the only significant cost to software is labor. Office space, development workstations, LAN, server, etc., and software development tools can be had for a fraction of the labor cost itself.
The only *significant* barrier to entry is the coordination benefits enjoyed by the established players.
(The only reason that maintenance cost is a large percentage of startup cost is simply because the startup cost is so low to start with!)
115. Slackjaw - Oct. 25, 1998 - 5:04 PM PT
What on earth did I say to warrant mention in the last post?
116. CalGal - Oct. 25, 1998 - 5:08 PM PT
Adam,
We're in agreement, then. I was just questioning the way you stated it originally. Sorry if I misunderstood.
117. AdamSelene - Oct. 25, 1998 - 5:18 PM PT
Slackjaw,
Perhaps I misinterpreted this statement of yours:
"More basically, ignoring other markets, perhaps we're talking about an industry in which firms have declining costs in output--the more product a firm sells, the cheaper it is to consumers. Then a competitor, unlike in the canonical market situation, cannot play if it jumps only equally as high. It must jump a few inches higher if it wishes to enter the game. "
If you were including coordination as a primary cause of economy of scale (as you do seem to do in #86,) then we are in agreement. But that's not the normal assumption, is it?
118. AdamSelene - Oct. 25, 1998 - 5:27 PM PT
I'd like to propose a serious solution to the MS "monopoly problem." (I'm not the first one to think of this, but let's assume that I'm at least bright enough to recognize its value!)
The coordination benefits in the OS case is due to one simple fact: all the applications are built to run on it. The reason this is true, of course, is because of the installed OS base, but the benefit to the consumer is the number of integegrated applications.
Now, one of the (unproven) charges against MS has been that they do not publish all the Application Programming Interfaces (APIs) that their own app developers get to use. And even if they do - they change them so frequently that outside vendors have a hard time keeping up.
So - if MS were required to publish all of the APIs, and to do it - say - one year in advance of each change, then not only could all application developers have an equal chance to compete on their merits, but the OS itself would become a commodity as other vendors realized they could right software to fit the back side of the API just as well as the front side.
Not that this would be "fair" to MS, but it could form a starting point for developing a workable solution.
119. AdamSelene - Oct. 25, 1998 - 5:30 PM PT
er, "write" software, not "right" it. Or maybe I was right the first time?
120. Slackjaw - Oct. 25, 1998 - 6:34 PM PT
Selene Message #117,
what, are you kidding me? The last time we did this I had something like a 400 post exchange with you and CalGal in which I argued only that coordination benefits in a case like this create economies of scale, that the least cost arrangement in such a case is monopoly, that free market operation would thus tend to favor monopoly (as it should, seeking out the least cost solution and all--just doing it too well), and that monopolies are generally not desirable for a number of reasons (pace of innovation, effect on other markets, etc.). Now YOU are telling ME I need to think more about coordination?! Sheesh! You know, my mother-in-law's computer? That whole driving on the right side of the road thing? I believe I mentioned that in the first discussion on MS to take place since I've been here. I don't think it a misapprehension of history to say that I introduced that argument into the annals of Fray discussions on Microsoft. I'm sure CalGal has the posts saved and will let me know if it happened differently, at least in our second go-round in the econ thread. My argument in the Gates thread before that (and before that in Politics) was pretty much the same, of course.
There are multiple causes of economies of scale. Coordination economies are certainly recognized as one at the intro econ level. They're often called "network externalities."
121. Slackjaw - Oct. 25, 1998 - 6:36 PM PT
I think that's a grand solution to the problem, really. At least as long as these sorts of "hooks" running on this platform remain optimal. Kind of screws microsoft, though. Not that they haven't earned enough rent in the interim to make the whole thing worth their while.
122. CalGal - Oct. 25, 1998 - 6:46 PM PT
I do have the posts saved.
But you're wrong.
There were over 700 posts on the subject.
123. AdamSelene - Oct. 25, 1998 - 7:05 PM PT
slackjaw,
mea culpa. I was debating your statement on its face in this thread, not on our history. I should have clarified your point for you rather than challenge you on it.
Regarding the optimal API hooks - Well, optimality is relative, subjective, and depends on the OS itself. Plus, new innovations keep requiring new hooks, which can make old ones suboptimal in the new context. For example, integrating browser technology like MS did changed the way basic file headers are accessed.
The real problem here is keeping different versions of the "commodity" OS from diverging as the different vendors make their systems "optimal" for different kinds of users. This industry has had mixed success with open standards committies in that regard. Their good when you want one standard for all time (say, ASCII or the 7-layer IP stack), but when the very nature of optimality is context dependent.... watch out for corporate meddling.
124. proudnerd - Oct. 25, 1998 - 7:24 PM PT
AdamSelene, Message #118
Coordination offers no benefits in the OS case if the entity controlling the definition of the OS simply ignores the requirements of the users. Publishing APIs well ahead of the release hardly compesnates for the fact that application developers and users can be crippled by a brain-dead OS (like ones from M$). It is not as if platform and application vendors haven't tried to get M$ to mend its ways, it's just that M$ has always conveniently ignored them. The only way to reap the benefit of coordination is to use a consortium to control the OS.
125. AdamSelene - Oct. 25, 1998 - 8:09 PM PT
Proudnerd,
If the "brain-dead" windows OS is so bad, then why is Sun so upset that MS *extended* their Java development tool to include the native Windows' GUI API? It would be different if MS blocked the competing swing technology, but they didn't block anything - they just added ways for Java programmers to access native windows APIs.
My point here is that windows may or may not be brain-dead, that's not the issue. The issue is that windows APIs *ARE* the best way to *use* windows, and as long as windows is dominant, programmers will try to take advantage of the most efficient techiques for using windows - which prevents that java code from running on other OSs.
If you asked me, Sun should have just wrapped AWT around WFC and usurped the Windows advantage. Of course, then Gates would probably have sued them for stealing their API definitions...
Anyway - Sun won't even allow a Java consortium to get out of their control - you don't really expect Gates to give away Windows do you?
126. Slackjaw - Oct. 25, 1998 - 11:10 PM PT
700 posts, eh? Well, time flies, er something like that.
Selene: "I should have clarified your point for you." Precisely. Try to do better next time.
No, it's just that I wouldn't have thought you so quick to forget. On the other hand, I think you're about my dad's age and he forgets stuff all the time these days. Probably age related.
Ha
Ha
Ha
127. freetochoose - Oct. 26, 1998 - 4:42 AM PT
proudnerd
"The only way to reap the benefit of coordination is to use a consortium to control the OS."
You mean like the consortium in Japan to build the 5th generation computer? The one that failed miserably?
Or the consortium to develop the HDTV standard in Japan? The on that's been abandoned before selling beyond the techo-nerds?
Lest you think it is a Japanese problem, perhaps you were thinking of the US consortium Sematech? The one with dribs of products after spending gobs of cash.
Or perhaps you mean the granddaddy of them all, the oil shale consortium? Oil, yes, at a per barrel cost higher than anytime in history.
Ah yes, the proud history of consortiums.
128. AdamSelene - Oct. 26, 1998 - 5:20 AM PT
freetochoose,
Yes, a sad history. But don't throw the baby out with the bubble bath. You've heard of ASCII, right? Posix? (well, not that the last one was ever used much befor Linux.) A lot of software-related standards have been handled successfully in committee. Of course, virtually all of those cases were academic committees or had strong academic involvement. I would dread to see what an industry or government-chaired committee would do with an OS standard - On the other hand, we already have seen something like that --- maybe you've heard of Ada? (I bet no one outside of the DoD world has!)
Slackjaw --- hmmm. I seem to recall some young whippersnapper with that name... now, if I can just remember where they put that darn fool Enter key...
129. JaDeGoLd - Oct. 26, 1998 - 5:24 AM PT
Sadly, DoD *still* clings to Ada. It's become a matter of face with them.
130. freetochoose - Oct. 26, 1998 - 5:33 AM PT
AdamSelene
My intention wasn't to throw out the baby with the bath. As the chair of a committee developing principles, I hardly want to be in the position of arguing that committees never succeed (g).
Committees and consortiums certainly have their place. Voluntary standards is one such place.
Yes, I've heard of ADA. I even remember (at least I hope) who it was named after, Ada Lovelace, the first programmer.
131. AdamSelene - Oct. 26, 1998 - 7:36 AM PT
FTC,
And don't forget MCC (the Microelectronics and Computer Consortion) in Houston. Our private industry response to MITI. All the participants wanted to put in token projects and reap the benefit of everyone else's research. Guess how well that turned out.
p.s., yep. That's the lady. Babbages' sponser, as I recall. The problem with Ada (the programming language) wasn't so much the committee, (well, in addition to the committee anyway) but the fact that they invented new programming approaches and terminology for things that had been solved years ago. Like "tasks" and "rendevous" for processes and semaphores. Oh well. The real-time specifications were nice, I'll admit.
132. stostosto - Oct. 26, 1998 - 11:07 AM PT
For a useful brief on what economics has to say on the Microsoft trial, see this link on network economics.
(Sorry, if it has already been linked)
(Well, even if it has already been linked, it is still useful, and I am not really all that sorry...)
133. HCaulfield - Oct. 27, 1998 - 6:57 AM PT
Guess how much it cost to build that "free" Linux?
134. AdamSelene - Oct. 27, 1998 - 12:19 PM PT
HCaulfield, Excellent link!
BTW, I was looking for some software over the last few days (MS Visual Development 6.0, Enterprise Edition, if anyone's interested) and I kept my eye out for Linux. I found two copies of Redhat Linux at CompUSA, and talked to a college kid who was thinking of buying it. (He didn't.) I also found one copy at Best Buys, but it was the previous release. CompUSA had one collection of application tools for Linux, 3 copies. I'm heading to Egghead this week - I'll bet they have a few copies.
Of course, both of these stores had rows and rows of MS products, and a couple of rows of MacStuff.
135. vonKreedon - Oct. 27, 1998 - 3:03 PM PT
A problem with requiring MS to publish its APIs a year ahead of releasing the OS is that the OS would never get released as each new API set that was added to support market driven features would require another 12 month delay.
136. AdamSelene - Oct. 27, 1998 - 4:47 PM PT
VK,
I forgot to specify what kind of "year." I meant a Microsoft release-date year. Or, to the laymen, 27 months.
137. vonKreedon - Oct. 27, 1998 - 4:50 PM PT
Well, yeah, MS has a hard enough time getting the OS out the door, to force them to release ANYTHING a year, MS year or otherwise, prior to ship would ensure the death of the MS OS.
138. AdamSelene - Oct. 29, 1998 - 4:09 AM PT
Has anyone besides me had it up to here with Michael Lewis' bigotted condescension? How many times does he have to phonetically spell southern speech before he expects us to get the idea that southern drawl is the ultimate hallmark of redneck bumpkins who don't belong in court? Enough already!
We sutherners awready figured out that Lewis got nuthin' 'portunt ta sayee 'bout this 'ere triyll, so wha ain't he dun quit wastin' ur tiym awready?
139. christophersharp - Oct. 30, 1998 - 1:04 AM PT
AdamSelene. looks like you're the only one. speaking for myself, lewis
is a very funny man.
140. AdamSelene - Oct. 30, 1998 - 7:26 AM PT
And I suppose you laugh at white comics in blackface?
141.christophersharp - Oct. 30, 1998 - 11:16 AM PT
yep. if they are funny.
142. dr3011 - Oct. 30, 1998 - 3:24 PM PT
I believe Lewis's point was that the lawyer was deliberately exagerating his accent as part of his legal act, to be "folksy" rather than a techie, just as he was more being more bellicose than usual, and making fun of Netscape's names.
143. AdamSelene - Oct. 30, 1998 - 4:56 PM PT
dr3011,
Your suggestion gave me pause, so I reread the first two of Lewis's reports. No, you are indeed wrong. In fact, upon rereading I find his callous slander of "hicks" to be even more dispicable that I originally thought. His agenda is very clear and his methods all the more revolting.
I'm afraid Slate bent over a little too far backwards on this one.