Brigham Young University
This article was published in the November 1997 issue of the industry newsletter, the Multimedia Monitor. Copyright 1997, Phillips Business Information, Inc. For more information about the Monitor contact 1-301/424-3338 (Inside U.S. 1/800-777-5006) Fax 301/309-3847. EMAIL [email protected] Appears here by permission.
"Even if Gates has a monopoly, having a monopoly in the computer business is like being married to Larry King. The one certainty is that it won't last. The business is too volatile, too competitive, and too unpredictable." Stephen Chapman in "Microsoft As A Monopolist? In Its Dreams," a commentary that appeared on the editorial page of the Chicago Tribune, October 23, 1997
Almost a year ago I wrote a three-part series of articles [Monitor: November and December, 1996 and January 1997] that examined the growing negative feelings toward Bill Gates, relating this phenomenon to the roles of Microsoft Corporation and other companies in the information industry. Documenting something I called "Gates Hate," I went on to explain how a great deal of Microsoft's success was due to mistakes on the part of their competition.
My thought a few weeks ago was to update that initial theme, prompted by the booing and hissing that greeted Steve Jobs' announcement at MacWorld that Gates (Microsoft) was investing $150 million in Apple. Childish and immature was how Jobs described those reactions of the Mac faithful. Big Brother-ish was how many described Gates' face on the huge TV screen behind Jobs on the stage, alluding perhaps to the now-famous 1984 ad that announced the Macintosh to the world. My sense was that Gates Hate had reached new levels.
But now, it appears that what started out as some bad vibes emanating from some disgruntled Mac heads and a few negative comments from the management of some competitors (not to mention Scott McNealy of Sun trying to get a Saint Bernard to urinate on the Microsoftlogo) has turned into a full scale offensive. Sun has brought suit againstMicrosoft claiming that Gates' company has violated several provisionsof their Java licensing agreement. [Update: Sun brought suit in 1997, alleging Microsoft's incomplete implementation of Java in its Microsoft Java Virtual Machine A Wikipedia article explains how this suit was finally settled in 2001 with Microsoft dropping the support of Java that it had implemented. ]
And as if that were not enough bad news for one month for Bill and Company, Microsoft's competition has now enlisted the help of the Department of Justice (DOJ), convincing them to pick up where it left off after obtaining the consent degree that endedMicrosoft's attempt last year to buy out Intuit. Basically, the DOJ hasbrought suit against Microsoft, asserting that the software company hasviolated the consent decree with its requirement of having computer manufacturersplace Internet Explorer on machines onto which they will be placing Windows 95.
Several others have joined Sun and the DOJ. For example, the Senate Judiciary Committee, chaired by Senator Orrin Hatch R-Utah, has scheduled hearings into Microsoft's practices. This puts Senator Hatch and Attorney General Janet Reno on the same side of an issue for the first time I can remember, with Hatch calling Reno's move "an important step toward ensuring an open, unfettered and unregulated information highway." Consumer-advocate Ralph Nader has announced a November conference in Washington, DC, entitled "Appraising Microsoft." Even George Gilder, an unabashed Gates admirer in previous years, has parted company with Microsoft, at least technologically, implying that Microsoft might be losing its technical edge. In his article "Will Java Break Windows" published in Forbes ASAP, Gilder so much as says that Microsoft just does not get it with respect to Java, the thing that Sun and many others are convinced that Gates is out to torpedo.
Add to this already illustrious group: (1) antitrust officials in the European Economic Community, (2) agencies from various states, and (3) Web surfers who are registering their opinions in an online poll on the ABC News Web site and it appears we have an Information Age version of a lynch party getting itself organized. To take up again our original theme, "We have seen the villain and the villain is Microsoft. Lynch 'em!" [In an ABC online poll readers were asked the question "Who do you think should prevail in the antitrust action against Microsoft?" As of October 27 , 1997, at 03:32 AM EST, 65.7% of the 760 people who had responded said the U.S. government should prevail and only 34.2% had said Microsoft should win.]
First off, let's say it clearly, Microsoft is not a monopoly! IBM, Apple, Sun Microsystems, and Silicon Graphics (SGI) together represent an enormous amount of power in the hardware and software business and they all sell systems that compete with Windows machines, at least at some level. Their machines run AIX (IBM's UNIX), OS/2, MacOS and two versions of Unix. Sure, sales of Windows machines dwarf in numbers the offerings from these companies, but this does not constitute a monopoly.
The last time fears of Microsoft's supposed monopoly position reached a feverish pitch was in 1995 when AOL, Compuserve, and Prodigy were quaking in their boots that Microsoft was going to use its "monopolistic position" to place the Microsoft Network's (MSN) logo on the Windows 95 desktop, quickly crowding them out of their businesses. Yet AOL recently announced its acquisition of Compuserve, increasing its base of 9 million subscribers by 2.6 million, bringing them to 11.6 million compared to Microsoft's 2.3 million. It is clear from these numbers that Microsoft's dreaded takeover of the online services market has not materialized. The MSN logo has been there on the Windows desktop for over two years now, yet consumers have not chosen MSN over other alternatives.
Second, the argument that Microsoft wants to kill Java holds almost no water at all. My sense is that if Java is as good as Gilder says it is, then the smart guys at Microsoft will recognize this soon enough. Already I have personally had the experience of watching Java applets load and run significantly faster when using Microsoft's Internet Explorer 4.0 as compared to Netscape's Communicator 4.03.
Finally, does Microsoft want to eliminate Netscape from all new machines and from the marketplace? Microsoft officials point to a host of PC makers such as Compaq and IBM that offer the Internet Explorer and the Netscape Navigator both on their machines, in direct conflict with some of the testimony to the Justice Department. Whom do we believe? My sense is that Microsoft is too smart to think that they will gain anything simply by placing Internet Explorer on those machines. They know that the real battle will not be won by whomever can give away the most browsers. Netscape by the way is winning this conflict by all accounts, 70% to 30% or 80% to 20%, depending on your source.
No, the real battle hereis for Microsoft's survival. In fact, perhaps the main new battlegroundwill be in the area of Network Computers (NCs), which some think will significantlychange the complexion of computing. Sun and IBM are of course both happy,since thin clients dictate the need for fat servers, the kind of machinesthey will be all too happy to sell. Microsoft's real interest in all ofthis lies with the fact that these two companies plus Netscape and Oracleare all supporting standards for NC machines that do not need Microsoftsoftware of any kind! Therein lies the challenge, or at least a primaryone.
Microsoft is a monopoly?Talk to the IBM of yesteryear about what it means to have a monopoly! Theydid, and now they understand better than anyone how precarious life atthe top of an Information Age pyramid can really be. You can bet your sweetbippy that Bill Gates understands it too! He knows that the best innovationswill win EVERYTIME!
And contrary to what peopleresponded in a poll on ABC's Website, Microsoft works hard to innovate. In that poll 70% of the respondents are saying that Microsoft is an imitator and30% say it is an innovator.] It should be clear that imitation would notcost them the $2 billion they are spending this year on R&D, about20% of gross revenues. This is an amount surpassed only by five U.S. companies:General Motors, Ford, IBM, AT&T and Hewlett-Packard, and Microsoftis ahead of all of these in research spending as a percentage of revenue.
The sad part here is thatthis whole issue is being dealt with purely on the basis of feelings. JanetReno, Orrin Hatch, Ralph Nader, and 66% of the American public (at leastof those who responded to ABC's poll) FEEL that Microsoft is a monopolythat should be controlled. As for me, I trust the buying public much morethan that. I trust them to buy what they want and need rather than whatMicrosoft merely wants to foist upon them. I trust them significantly morethan I trust the ability of the Renos, Hatches, and Naders to tell us whatshould be sold or not.
Author's Note: Microsoft has put together a set of materials that support their position with respect to the Department of Justice action.
Michael Bush is Associate Professor of French and Instructional Psychology and Technology at Brigham Young University. He is also a partner in Alpine Media of Orem, Utah, a company specializing in multimedia development for education, assessment, and foreign language training. In 1992 he retired from the Air Force as a Lieutenant Colonel at the US Air Force Academy, where he was principally involved in the design and implementation of the largest interactive videodisc language learning center of its kind on any college campus in the world. Bush may be reached at Department of French and Italian, 4013 JKHB Brigham Young University Provo, Utah 84602, 801/378-4515, fax 801/378-4649, email: [email protected]. Or, contact Bush at Alpine Media, Suite G-1, 560 South State Street, Orem UT 84058, 801/226-4283, fax 801/223-9069.