My NatPost Column on Microsoft

The first few paragraphs of tomorrow’s National Post column on Microsoft versus the EU:

Microsoft will be punished this week by the European Union, and the punditrocracy is dutifully taking up flanking positions. But both supporters and critics are adrift this time around.

On the one hand you have people like the EU’s Mario Monti complaining that Microsoft doesn’t play fair. His concern, apparently, is that the next generation of Microsoft’s Windows software, a product codenamed Longhorn (“Late”-horn might be better given the product’s tardy arrival), will contain new features that will hurt Microsoft competitors.

Say it ain’t so. A profit-seeking company in a competitive market would be so bold as to keep its products current? Outrageous.

More seriously, the question of whether Microsoft can and should add features to its products is long-settled, and the answer is a resounding “Yes”. To prevent Microsoft from adding an arbitrary and changing list of features to its software is absurd and tantamount to a death sentence for the technology company. If senescence is the goal, then fine, simply say that.

Because it was just a scant few years ago that Internet browsers were the technology regulators wanted to keep from being included in the operating system. Does anyone reading this column — many using a browser — really think they have been damaged by not having paid separately for the browser they are using? I thought not.

But arrayed against the EU are some other folks who aren’t doing the Microsoft cause any favors either. Economists, pundits, and assorted others are wailing about the death of innovation and the perils of interfering in fast-growing technology markets.

That is well and fine, of course, but it has little do with Microsoft. Because Microsoft is not a growth company. You have to go all the way back to the mid-1990s to find Microsoft growing sales consistently at more than 30% per year.

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  1. Harmed by Microsoft?

    Paul Kedrosky asks: Infectious Greed: Does anyone reading this column — many using a browser — really think they have been damaged by not having paid separately for the browser they are using?And I raise my hand, and shout, “I do! I do!” I certainly …

  2. Kevin Walsh says:

    You have conveniently conflated two or three different major but unrelated issues with MS to support your point.
    1) MS “right to innovate”. Few question whether MS has a right to add functionality to their OS. That’s not directly at issue. The issue at hand is whether MS has (and continues to) illegally leverage their Windows monopoly to threaten and coerce partners to preferentially adopt their products or specfications, and actively exclude competitors. Secondly, they design the products with proprietary and confidential API’s to hamper or exclude the ability of competitors to compete with their products, which is fine in a competitive market, but isn’t in a monopoly situation (akin to a electricity utility telling you that you have to use their electic appliances, and if you want to use someone else’s they won’t share with anyone how to plug it in). Isn’t it odd that MS has failed in every market they’ve tried to enter where they can’t use the Windows monopoly to disadvantage/hammer their competitors?
    Having worked for a major PC mfg in past years, I can state definitively, from direct experience, that when 80-90% of your H/W revenues come from Windows based products, the mere suggestion that you might get (or not get) preferential access to new product info (enabling one to be feature competitive or fall behind), or lose kickbacks (umm, I mean Market Development Funds – aka co-op $$) i.e. be profitable or lose money in a H/W universe of razor thin margins, this constitutes an offer you can’t refuse.
    2) Has anybody been damaged by not having paid separately for a browser. YES!!
    - Why is my computer still (albeit somewhat less) unstable, crashing and generally unpredictable.
    - Browser still relatively twitchy and difficult to use
    - Why does every opening every single email potentially expose me to a potential exploding cigar that will destroy my system and erase my data?
    - why do I have to waste hours every month on patches/fixes, and pay what amounts to protection money to anti-virus companies, due to unprotected/insecure web Win/IE programing interfaces
    - Why do corporations waste literally billions on anti-virus, firewall and security software to try and stop software before it gets to inherently dangerously architected web browsers or email.
    - Why I am constantly bothered by pop-ups, and privacy destroying and dangerous web attachments (spyware/malware, cookie tracking, viruses) which are automatically downloaded unless I degrade IE browser functionality to the point of uselessness.
    The issue is not simply that MS’s IE was a better browser and therefore won (it wasn’t and isn’t). Rather, MS used brute force tactics leveraging their Windows monopoly to compel computer mfg’s, software developers, consultants and others to preferentially use/sell/develop-on IE, and explicitly exclude competitors, thus driving them out of business. The resultg was that browser innovation and user interface development effectively stopped, leaving a huge static monoculture target for every virus writer/spammer/marketer to exploit.
    3) Re: harming general innovation. One can make an even stronger case that the entire computer industry has been severely harmed by MS abuse of their monopoly. For about five years now, the Windows environment has not had any new major “killer apps”. This is due in large part to the fact that entrepreneurs don’t see any compelling ROI in major development investments on the Windows platform, which is 90+% of the total computer market. This is because if the resulting market builds to any signficant size MS has proven repetitively that they will either copy, and in several proven cases outright steal the innovation to produce a competitive product which is then coercively marketed or bundled with the OS. The result? Customers have found that there’s no reason to upgrade their old computers, since there’s no new software that really requires more than what they bought 3-4 years ago. The entire computer industry has thus had 3+ years of stunted growth (i.e. post Y2K), partially due to market saturation and post Y2K market exuberance, but in large part due to companies delaying refresh cycles for want of any compelling S/W innovations that require H/W upgrades.
    In short, MS has most definitely directly and indirectly harmed everyone who is effectively forced to use IE because of MS’s abuse of their Windows monopoly to drive competitors out of business.

  3. dws says:

    re: “Does anyone … really think they have been damaged by not having paid separately for the browser they are using? I thought not.”
    That’s the problem, you thought not! dws