--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-
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" (

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.*

Search WWW Search

Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan