Microsoft, the Monopolist Zombie

A lot of people know that I’m not a fan of Microsoft Operating Systems. In fact, if I could bill Microsoft for all of the time I’ve spent trying to fix their mistakes, I’d be a rich man now.

What most people don’t know, because they don’t read court filings, is that Microsoft has deliberately attempted to block competition in Operating Systems, and Client Software for a good many years. In fact the company was found guilty of anti-competitive acts in several countries, including the United States.

However if you don’t have a technical background, it can be hard to understand what Microsoft did, and why it’s important. In simple terms, what Microsoft did was make sure that their products were interoperable when first introduced, so that they would be widely adopted, and once the products were widely adopted, would introduce incompatibilities into them, so that Microsoft products would only work well with other Microsoft products. They would then blame the competing product, claiming it didn’t work properly.

The result was a series of Microsoft products that worked great with other Microsoft products. Since other vendors products didn’t work well with Microsoft products, the easy way for most customers was to adopt a 100% Microsoft ecosystem.

This wiped out many Microsoft competitors, and once Microsoft felt it had a commanding lead in a market, it would increase prices on it’s products. This is documented by Anti-Trust cases that Microsoft lost both in the European Union and the United States.

There was also a class action lawsuit launched against Microsoft in the state of Iowa, called Comes v. Microsoft. The case was unusual in that the lawyers for the class posted all of the documents that they obtained from Microsoft during discovery on a website. Many people took advantage of the availability and downloaded copies. Mirrors of the original site can be found in various places around the net.

This week Groklaw, a geek legal site run by the redoubtable Pamela Jones, a paralegal, published several of the documents as text. In addition to the work done by the Boycott Novell website, the work done at Groklaw gives a view inside Microsoft, where as far back as 1999 Microsoft was more concerned with blocking Linux adoption, than they were in providing a superior product.

Groklaw’s main concern is the damage Microsoft has done to Free Software, but Free Software hasn’t been Microsoft’s only target. They used the same attacks against a wide range of competing companies, including IBM, Novell, Digital Research, Word Perfect, Corel, Apple, Commodore, Atari, Berkeley Softworks, Lotus, Borland, Real Networks, Netscape, Micrografx, Beos, Sun, Go Corporation, Ashton Tate, and Stac Electronics. Many of these companies no longer exist due to Microsoft’s machinations, which have left a trail of wrecked companies and lives.

It’s impossible to determine how much damage Microsoft has done to the world economy by it’s anti-competitive actions. We know that the EU Competition Commission levied a fine that was over a billion euros, and which apparently has done little or nothing to change Microsoft’s actions. It appears that fines are part of the cost of doing business from Microsoft’s point of view.

However it’s possible that Microsoft has in the end done more damage to themselves than to anyone else. For years Microsoft was the 800 pound gorilla of the computing industry. Since 2003 Microsoft has not introduced one product that has achieved widespread adoption, and has lost money on every new field that the company has entered. While it’s difficult to be sure, it appears that Microsoft’s focus on preventing competition, has done more damage to Microsoft than the competition, at least in the last 6 years, due to a lack of focus on product design. It doesn’t matter if you are a monopolist, if you design a product that isn’t attractive to your customers.

For example many people think that Microsoft’s XBox360 is wildly successful. And Microsoft did sell a lot of these since their introduction. But at a tremendous cost. The systems have been very unreliable, with Microsoft having to replace enormous numbers of them under warranty. No other consumer electronic device has every had as high a failure rate.

Microsoft’s Windows Mobile was supposed to be the operating system that would introduce smart phones to the masses, however first RIM with the Blackberry, and then Apple with the IPhone have produced devices that worked better than Windows Mobile devices, and nearly wiped Windows Mobile out as an operating system. Microsoft claims that Mobile is still a major part of their corporate focus, however it is difficult to see how they can gain back the market share that they have lost.

Microsoft’s Zune Media player is another product that hasn’t sold at all well. While the device does work, it seems unable to compete with the Apple IPod, or for that matter with the less expensive Chinese made media players.

Apple has hit Microsoft hard, literally taking the top end of the personal computer market by storm. Some estimates give Apple 50% or more of the market for computers costing over $1000.00 US. Apple’s Mac-PC ad campaign has helped to introduce a new generation of computer users to the Mac platform, which only a few years ago most people had written off as dead. In Canada some estimates put Mac OSX at 10% of the total market of in-use systems.

Firefox has taken market share from Microsoft’s Internet Explorer every month since it’s introduction. In fact in some areas of the world it now appears to be the dominant browser, despite Internet Explorer being shipped with every copy of Windows. Other browsers are also taking market share from Microsoft, including Opera, and Apple’s Safari.

Microsoft Office has also taken a hit, with a variety of competing Office Suites nibbling at it’s market share. Word Perfect is still around, and gaining share slowly. More dangerous to Microsoft is Google Office, an online collaborative suite. For those who don’t want to keep their data on the cloud, and can’t afford Word Perfect or Microsoft Office, there’s Open Office, which is a free download, and has most of the functionality of Microsoft Office. In fact it’s better than Office in some ways, for example when opening legacy Office documents, OpenOffice works better.

The question is, can Microsoft still compete? The answer appears to be no, in the short term. It got fat and complacent, just like General Motors did. General Motors had to go into bankruptcy protection to survive. But GM produced a hard product. Microsoft doesn’t. And that could be what kills Microsoft.

Wayne Borean

Saturday January 16, 2010

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