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It occurs to me, working away on
various analyses, white papers, and Opinions while the long, hot
summer passes outside my window that we (that is, various members of
the government and participants in the computer industry) keep
complaining about something Microsoft has done that “we” don ’t
like. Often, this is put in terms of Harm to The User, rather
than in terms of politics, government costs and revenues, or
commercial competition in the marketplace. In
the meantime, Microsoft is taking its usual approach Steve Balmer told
me last year that they have no choice but to keep their heads down and
pursue business as usual. In this case, that includes asking the
Supreme Court to agree to hear a Microsoft appeal to set aside the
current decision, thereby delaying other actions based on the current
decision for a year or more. Perhaps
a different approach is useful. Rather than saying what we DON’T
want Microsoft to do, it might be more helpful to lay our cards on the
table and say what we DO want them to do. Then, of course, we’d
have to consider the likely consequences of our requests, but that’s
part of the process. The courts will have to consider such
consequences when they finally decide what Microsoft did wrong and what
the penalty should be. Freedom
Of Choice Many
ISVs, large and small, demand that Microsoft stop practices which they
believe impede choice for the user (meaning the ISVs’ ability to
compete in the marketplace). The problem is users don’t really value
choice nearly as much as the vendors who want to use it to protect their
possibility to create and protect market entry. In
fact, in many cases, ISVs don’t value freedom of choice much either
(unless their offering will be affected). The reasons that there
are tens of thousands of applications for the Windows platform, for
example, isn’t that ISVs love the aesthetics of the platform, but
rather that they are compelled by market economics. Popular products
create huge markets. In these huge markets even smaller and less
successful ISVs may find very good businesses. Ten per cent of a
Windows market segment could still be a $100 million market. That
might not be true for less popular platforms. Successful platform vendors are creating standards, de facto or marketplace standards, to be sure, but strong standards nevertheless. On these standards, hardware vendors, application software vendors, consultants, trainers, and customers can build whatever they want. They are assured of lots of partners, lots of choice ON TOP OF THE PLATFORM, and ease of interoperability and integration within the platform rules. Of
course, platforms may also be created by multiple vendors agreeing to de
jure or institutional standards, but it’s a slower process to both
create the original standard and to make modifications during its
lifetime. Marketplace
standards occur largely because developers agree to develop for a
platform and customers agree to buy that platform and its surrounding
infrastructure. They are mutual co-dependents. Vendors can
propose platforms as standards, but if the marketplace doesn’t agree,
nothing interesting will happen (remember OS/2? How about CPM?
What about all the obscure minicomputer operating systems that, in some
sense, have been mainly replaced with Unix and NT?) If
you want Microsoft not to have Windows as a strong platform, what do you
want? Open Standards? Another vendor in Microsoft’s place?
Something will be needed. Where
would the users be in all this? It is the strength and durability
of platform standards that allow users to have a huge choice of
applications in a highly competitive market. Without it, they
become (as Apple users had become) isolated by their smaller numbers,
with only a few choices in each application category and little
incentive for ISVs to invest in building new applications. It is
only the advent of OS X for the Macintosh (a Unix variant) that permits
ISVs to rethink their interest in the Apple market, since they can now
service the entire Unix (and Linux) markets, too, with minimal porting. Stop
Innovating We
could force Microsoft to stop innovating. We could argue about how
much innovating Microsoft actually does, as opposed to clever adaptation
of ideas already under discussion in industry circles, and acquisition
of technology and companies. I’m
not sure how (legally or practically) you’d stop a company from
innovating. Would you ask them to stop having good ideas? To
stop listening to what their customers wanted them to do and add?
To stop looking at competitive products? Should
we require that they only bring out new releases at longer intervals?
When they had added at least x new features? Or perhaps that they
couldn’t bring out new versions of products at all? What about
new products? If
companies are required by their responsibilities to their shareholders
to attempt to maximize their revenues and profits, wouldn’t such
requirements mean that they couldn’t both meet such restrictions and
meet their corporate responsibilities? Stop
Integrating Many
of the arguments about what Microsoft has done to harm or potentially
harm Users or Markets hinges on the notion that it’s a bad idea to
incorporate new functions into existing products because that will
prevent ISVs who would like to sell just the new function as a separate
product from succeeding in the marketplace. That, of course, was
the basis of the Netscape/Microsoft Browser Debate. Of
course, it has been the software industry’s practice for at least the
last 20 years (the history of the PC software industry) and possibly
longer to mine one type of software (new stuff) to find features for
other types of software (usually mature stuff). That is how word
processors ended up including most of the features of desktop
publishing, for instance, and how spreadsheets included graphics
presentation software, and why so many types of software come in
“suites.” If
this is good for everyone else – and users love it because it gives
them more functionality at lower prices, with a guarantee (all right,
maybe it’s just a promise) that the products will work smoothly
together – why is it bad for Microsoft? The textbook answer is
because Microsoft has too much market power. So
if we force Microsoft to stop integrating new areas of function into the
Windows Operating System (or into major applications) we could preserve
these areas for other vendors to compete. But:
Stop
Marketing Aggressively Competitors
would love to see a kinder, softer Microsoft but given the highly
competitive nature of the software industry it seems unlikely that a
software company that fails to market aggressively could be a large and
successful one. Nevertheless, this is a fruitful area for enforcement of
existing antitrust rules. If a vendor is gaining unfair advantage
by illegal marketing practices, then such practices should be promptly
noted and appropriate penalties enforced. Here
the question is, I believe, knowing where to draw the line between
competing hard and doing more than competing. Crisply drawn lines and
open contracts, openly enforced, would help. Serve
The Consumer Better Strangely,
this isn’t often overtly stated as something competitors would like
Microsoft to do although it often seems to be the consequence of what
they’re asking for. That might be because if Microsoft were an even
better marketeer it could be even more of competitive threat. Actually,
Microsoft does pretty well in this area, but there’s always room for
improvement. “Better” probably requires some definition.
For most users it’s some combination of better software (more useful
function), easier to use (and install and support), and less expensive.
For the record, we’d note that to the extent that software is more
integrated it is often easier to install, support, and use, offers more
function and is a better value (because the user gets more for his
money). Again, that means that serving the consumer better may be
distinctly at odds with meeting the demands of the law as it is
currently interpreted. Some
Conclusions This
was an exercise. It was brought about because it’s boring to
hear people say “Off with their head,” without understanding that if
Microsoft is the most important and visible piece of the high tech
revolution that has changed forever the way we work that removing it
from the equation is neither possible nor interesting. All of the
interested parties – Microsoft, its customers, competitors, partners,
and the various government players – need to sit down together and
answer the questions:
My
dad, who was a talented amateur woodworker, used to say measure twice
and cut once. That seems like good advice here. Once we
carve up the golden goose, it will be too late to regret that it no
longer lays those lovely golden eggs. Lastly,
there are many inherent contradictions in the goals we seek.
Understanding these contradictions and seeking to resolve them (or at
least find a balance point) may help us understand that there is no
winner or losers here, just players.
Comments or Questions: Send Email to
opinions@wohl.com
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