ISSUE 446: THE HIGH-TECH OFFICE
--Alan Zisman: May 12 1998
A few polite rules would hardly hamper
Microsoft's freedom to innovate and imitate
In last week's column, we looked at two recent Micro-
soft products: Office 98 for Mac users, and Publisher 98 for
Windows users. I liked both, and suggested that one reason for
Microsoft's success is that over time, it has produced some pretty good
products.
Despite that, Microsoft seems to be well on its way to
becoming a company that people love to hate. When Microsoft chair Bill
Gates got hit with a cream pie in Brussels earlier this year, a lot
of people felt satisfied. Windows users were quickly able to spice up
their screens with a free "Bill's Pie Toss Interactive Screen Saver" (www.risoftsystems.com).
With the company dragged before the U.S. courts under
investigation by the Justice Department, and with Gates
testifying before the Senate, even the company's own polling has
suggested that Microsoft's public-approval rating is taking a turn for
the worse. And revelations that the company's U.S. public relations
firm had been sending out bogus letters-to-the-editor (shades of Paul
Reitsma!) didn't help matters.
The Software Publishers Association has taken
a stand against Microsoft, recruiting former presidential candidate Bob
Dole to call for government action against the company. Even
non-computer industry businesses and groups such as the American
Society of Travel Agents and Knight Ridder New Media, have
come out in support of the SPA's anti-Microsoft Project to Promote
Competition and Innovation in the Digital Age.
These new critics have been watching fearfully as
Microsoft, with online sites for booking travel and buying cars, seemed
to be leveraging its computer industry strength to move in on other
markets.
Microsoft's main lines of defence -- that they're only
giving the public what it wants and that the company has to be left
free to innovate -- sound thin and increasingly shrill, especially
coming from a company that has been more successful at imitation than
innovation.
Nevertheless, Microsoft continues to have supporters.
A recent poll of 5,000 readers of the U.S.-based Business Week
magazine found 67 per cent of respondents preferred to have the
government leave Microsoft alone, with 22 per cent wanting government
regulation and 11 per cent proposing the company be broken up. At a
time when other computer industry companies -- including giants Intel
and Compaq -- hit with lowered demand in Asia and decreased
profits as computer prices drop, have reported lower-than-expected
profits, Microsoft has continued to make money. (Its share prices are
up about 50 per cent since last January.)
A couple of points:
* Microsoft does hold a virtual monopoly in several
areas, including PC operating systems and office suite software. But
under U.S. law, holding a monopoly is not illegal.
* The Justice Department has been focusing on
Microsoft's inclusion of its Internet Explorer Web browser in recent
versions of Windows 95 and the upcoming Windows 98. This is the wrong
issue. Operating systems from Microsoft, Apple, IBM and
others have all, over time, added functions, and Web browsers have been
included in operating systems from IBM and Apple, among others.
* A bigger issue has been to what extent Microsoft has
been able to use its control of the Windows platform to unfair
advantage in creating and selling other applications. This, perhaps, is
an issue that could be more validly addressed. Michael Miller,
editor of PC Magazine, recently suggested several steps worth
investigating. Among his proposals:
Operating system "calls" and file formats should be
made public at the time the software is released. This would allow all
third-party developers to be equally able to write applications that
run under that system.
Hardware makers and vendors should be free to add
their own front ends to operating systems and bundle whatever software
packages they and their customers want to include. In the past,
Microsoft has been able to limit manufacturers' abilities to customize
Windows and, rumour has it, to include the Netscape Navigator
Web browser on their products' desktops.
These proposals seem quite modest, but if agreed to
and respected by Microsoft, they could go far towards appearing to
level the playing field, while still leaving the company room to both
innovate and imitate.
While we're grumbling at Microsoft, however, here's
one more area. Hardware prices have dropped tremendously, and so have
prices for many software products. But the price for Microsoft's key
operating system, Windows, has remained remarkably stable over the
years. The latest version, Windows 98, is expected to be released on
June 25 and to sell for the same price as its predecessor -- about
$149. (And Windows NT, aimed at the corporate market, is priced
considerably higher.)
Given that Win98 is a far more modest upgrade than
Windows 95 was, I'd suspect sales would be much stronger at a price
point of, say, a third of that. But that is probably unlikely, given
the lack of real competition.*
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