Micrsoft: what could it have done?

Great Debates
1

This thread and this article (linked to in that thread), along with a DOJ document which I linked to in that thread, have provided me with a pretty clear picture of what is going on with Microsoft.

And I am resolutely ambiguous about the whole affair. I see that, in tracing out the chronology of the events, I can see how Microsoft’s actions were both good business practices, legal in themselves, and logicla progressions of an industry that even they weren’t really fit to keep up with (that is, their monopoly seemingly offered them no special insight into what tomorrow would bring).

I know we have a few MS haters on the boards, and I know we have a few supporters, and so I bring to the boards what I consider to be a really fucking important question that neither the press, nor the DOJ, seemed to allude to at all; and yet, this question would really determine if even a monopoly was subject to real competition from things that were not able to be subverted by “traditional” monopolistic tactics. The question is simple. It is almost IMHO, but I will add a twist to it.

First and foremost: what do you think Microsoft should have done? We know (or have access to) what they did. We know what the DOJ wants to do to Microsoft. What I am asking is, what steps should they have taken during their reign to both stay ahead of the game and avoid an anti-trust suit? The more I think about the topic, the more it seems to be inevitable: one couldn’t both stay firm in the market (even if they weren’t a non-monopoly) and avoid anti-trust suits.

In other words, the very nature of the market surrounding software, OSs, the internet, and the rush of bringing computers to the general marketplace was Microsoft’s blessing and curse. Each step brought them closer to the suit, and yet each step was unavoidable if they wanted to stay in the market.

My concern is two-fold: from users I have spoken to who hem and haw about how crappy windows is, they still seem to concede that every other choice available has not been geared for public consumption. Hell, you can’t give Linux away! OS’s which aren’t dummy-proof and dumbed down simply wouldn’t have made it in general consumption, and yet that is a claim many like to bolseter as self-evident, but on the flip side: monopolies offer shoddy products.

Do you really think there was a choice in this? Really?

My second concern is that software is still a fledgeling market. We simply don’t have good data on how such a thing should play out. It has only been geared for mainstream consumption for (maybe) 10 years, and I think that is putting it a little high. And yet so many are quick to think that Microsoft’s near-perfect monopoly was somehow permanent.

So, again: what would you have done that would have been both a smart business move and yet not considered, in hindsight by the courts, illegal?

I would like to reiterate: I am ambivalent; I feel that Microsoft made sound business decisions the whole way, and that its anti-trust suit was simply a matter of fate. So they both were right, and wrong. Don’t get much more ambivalent than that, I hope.

2

You’re ambivalent because you don’t know the specific ways about how Microsoft violated anti-trust laws. Whether or not they’d be where they are without those violations is debatable, but they’re not suffering from an anti-trust finding because they’re hard competitors. They really did break the law–that’s why the appeals court that’s been rabidly pro-Microsoft from day one let stand 2/3 of Jackson’s findings in law and all of his findings in fact.

Read the article I linked in the other thread by John Heilemann. As I said there, you’ll gain an appreciation of what Microsoft did and how they could think they were right in doing it, while also understanding how the Justice department came up with a clear case that convinced Jackson (who, despite his feelings after the trial, was a Reagan appointee who was generally against anti-trust law prior to the Microsoft case).

3

I reckon you young’uns are too young to remember the olden days.

If you were using application “X”, to save a file, you had to hit “Escape”, and then hit your arrow key until you highlighted the word “Update” which meant “Save”, and then you hit F6 ({{{NOT ENTER!}}} Enter would abort what you were doing and put you back in the document).

For application “Y”, you saved your file by pressing “End” + “Tab”. This opened a list of files. You moved the arrows until you highlighted one. To save a new file, you picked the one at the top that said, “New Document”, and then it gave you a screen to type in the name. Eight characters, of course. You pressed “Enter”. Then it asked you to type the name of a directory…

For application “Z”, you held down “Ctrl” with your elbow while pressing “Page Down” + “Back Space” with your right hand and “F12” + “Esc” with your left.

Users clamored for seamlessness. For all applications to work the same way. That launched a years-long effort to do exactly that. There were some notable achievers. Borland was doing great, and then they spent all their cash on a new building and died. Lotus was doing great, and then sat down to rest on its laurels, crushing them. Microsoft wasn’t even considered as a serious player. But in the end, it was Microsoft who best understood this demand and began wholesale integration of applications so that users dealt with documents and not programs. Every file, no matter what the application, was saved in exactly the same way. Learn one, learn them all.

Programs, per se, began to disappear. Thus, copying from Excel and pasting into Word was big news at the time, and a very welcome thing to everyone. And so it went until, with Windows 9x, depending on how you set it up, you couldn’t even tell the difference between documents, applications, your own hard drive, and even the Internet, as they all merged seamlessly into a single whole. And, dammit, just as things were becoming exactly what we had wished they would become, DOJ up and shoots its wad and screws everything up.

That’s how I see it, anyway.

4

I notice, Lib, that your post had not one word about the legal issues involved.

5

Did the OP require that? I thought it asked what MS should have done. I thought it should have done exactly what we had demanded it do. And that is in fact what it did.

I don’t know legal from squat. I just know that, so long as their practices were not coercive, they were ethical.

6

What could Microsoft have done to avoid the anti-trust suit? Simple. When people first started pointing out, “Hey, you know, you can’t buy a new computer that doesn’t have Windows already installed on it”, Microsoft should have said, “Oops, hey, you’re right! And hey, we’ll fix that right away. We’ll stop automatically bundling our OS with the computers.”

But instead they got all huffy and said, “Oh, yeah, well, we are not forcing anyone to buy our OS. They can get any OS they want!” And when people said, “Um, well, actually, maybe techically if you kidnap the Best Buy floorwalker’s mother and hold her hostage until he lets you buy a computer that doesn’t have Windows installed on it, then you can get a new computer without Windows, but–we don’t think that counts…”, Microsoft got all huffy again and said, “Oh, yeah? Well, well…bugger off, then…” and they circled the wagons and didn’t change anything at all, and the next thing you know they’re being sued by the People of the United States of America.

Competition is the lifeblood of the American capitalist system. People are free to go down the street and get a better price on a product, or to buy a different product entirely. But Windows wasn’t really optional, and Microsoft didn’t seem to see any problem with that, in terms of “consumer satisfaction”. All they saw was that they were selling lots of software.

I think the keyword here is “arrogance”. Microsoft behaved like John D. Rockefeller, not like a humble purveyor of computer software, and they got sued just like JD.

7

Yeah, but Microsoft doesn’t manufacture or sell computers. They don’t make the decision as to what OS is included on the machines–the manufacturers do. So isn’t what you describe really the fault of IBM, Dell, Gateway, Hewlett-Packard, et al.? Should MS have said, “Hey, you’re right–we’re not going to sell our OS to those guys anymore! We’d rather go out of business!”

Apple performed a brief experiment a few years ago with licensing their OS to other manufacturers. Users had implored them to do this for years, but unfortunately, it was too little, too late. None of the big boys took it up. They had the chance then to go with a non-MS OS, and carve themselves a unique little market niche, and they didn’t do it. If H-P had decided to start selling machines with Apple’s OS rather than Windows, you can bet that application writers would have been falling all over themselves to provide more Apple OS compatible software and get it bundled on H-P machines.

8

The manufacturers make those decisions in light of the licensing terms MS offered them: bundle Windows on every single computer you sell, or we’ll double your licensing fees.

Since Microsoft has a desktop monopoly, it was an effective threat. Dell, HP, Compaq, and Gateway sold a copy of windows with every desktop they sold; they didn’t offer desktops with no OS pre-installed. They couldn’t afford to double their licensing fees, so they couldn’t switch to another desktop OS. This is the same threat MS wielded to keep Compaq from bundling Netscape Navigator with it’s machines.

And that’s one of the anti-trust violations upheld by the appeals court.

9

The OP asked what Microsoft should have done to be as successful and still avoid an anti-trust suit.

10

I’d just like to point out here that you can indeed give Linux away.

[sub]Yes, I know what you really mean.[/sub]

11

Well, I guess (somewhat unsiprisingly) that Lib and I agree. There was nothing they could have done.

DDG, I appreciate your comments, but pld is saying some compelling things. Certinaly it seems like the market was competitive when MS entered it, and everyone jumped on the bandwagon to make money. They rode the winner by making the winner. Essentially, MS would have had to turn down good business deals to avoid becoming a monopoly. Or so it seems.

The market demanded simplicity and convenience. Microsoft provided that by teaming up with the hardware manufacturers.

Don’t get me wrong, I do see things that now make MS look pretty shitty, but others made the monster they wanted to take down.

That article I linked above kept me up to the wee hours last night (this morning). It is somewhat biased, IMO, toward the DOJ side, but only in rhetoric. Certainly the facts are presented cleanly enough (AFAICT).

DDG, do you feel your solution would have kept MS as a market leader, even if not a monopoly?

12

They did not. People were happy with what they were using. There were once a number of so called integrated programs such as Framework and Symphony. They never caught on because each individual module sucked. Look at Microsoft Works to have a feel.

They died not because of a new building but the dumb decision to by Aston-Tate for dBase. Remember them?

Not so. Unfortunately the initial attempts at converting of 1-2-3 to Windows were lackluster.

Are you serious? This cannot be further from the truth. First of all, M$ applications are not intergrated per se: Word is Word and Excel is Excel. They are not modules of the same program. Secondly, while certain operations are unified, learning one program does not grant a user knowledge of another. Can a Word user program Access without studying? 'fraid not.

The advantage M$ had - and still has - over other competitors was it has a cash cow. That used to be MS-DOS, which became Windows. This means M$ could afford to make blunders in, say, the applications area, and still could recover.

Maybe in your world that it works that way, but not in the Real World.

13

They could have paid attention to anti-trust law, and not broken it. Integrating keystrokes or menu selections in Office has no bearing on what they did that got them into court.

You’re buying into the pro-Microsoft party line that they got in trouble because they were “too successful”. Which is bullshit.

14

I think, by definition, monopolies are “too successful.” I think the meaning of “success” and “monopoly” bear that out completely, no?

I am not buying into anyone’s line, unless someone is trying to say that Microsoft was following a chain of events that were almost deterministic in hindsight.

I get the not-so-subtle sense that you feel there were specific actions they could have taken to avoid a suit and remain successful; what would those be, and why?

15

Two more things I wanted to mention: have you ever read over the Sherman Act? It is pretty much impossible to not break it.

As well, I wasn’t talking about integration specifically; my post mentioned ease of use, and complete packages are very easy to use. It is common sense to package Windows with a computer. Perhaps it is the console gamer in me, but I hate peripherals; I want to buy a PS2 for $X and get it home, and use it right then and there. Are you telling me that if Sony made controllers that didn’t disconnect from their console they’d be a big-bad-company? What about Nintendo’s popular practice of packaging games with the system? FOX advertising their own shows on their airtime?

“But they aren’t a monopoly…” Well, exactly. But if, like MS, they were to become one through swift and devestating business opportunities, the courts could find them guilty in hindsight of such a thing. I think monopoly cases are one of the only areas of law where one can be charged guilty for doing something that was, at the time, legal. This isn’t just misfeasance, this is [some other legal term which I can’t remember…]

The only way to avoid being tried under anti-trust laws for sure is to avoid becoming a monopoly. In MS’s case, that means not taking new opportunities as they arose (always a great incentive for growth!). I suggest a reading of the ALCOA case (which I can cite some text from if you’d like) for exactly the kind of thing that they were busted for.

And because of the fierce competition that the software business did and does have, I feel that one was either left with the choice of becoming a giant or falling far short of anything.

But really, I didn’t start this thread to lobby for any cause, even though I feel quickly backed into doing so. I am more interested in hearing other poster’s insights into the matter. I know exactly what I think; I am interested in hearing other conclusions and seeing if perhaps I am wrong in mine.

16

In a trivial way, yes, but a monopoly is not, in itself, illegal. Microsoft was found guilty of abusing its monopoly position.

This is all irrelevant. MS didn’t get into trouble for making deals with computer vendors to pre-install windows. They got in trouble because, as a monopoly, they put riders on the deals to pre-install windows that leveraged their monopoly into other areas.

Two off the top of my head:

They went to Compaq and said “don’t bundle Netscape Navigator with your pre-installs, or we’ll double your licensing fees”. That was a specifically anti-competitive act that leveraged their monopoly on the desktop to create a browser monopoly.

They went to Netscape and offered to divide the market, which is an illegal offer in and of itself.

This is unsupported supposition.

Or, like IBM, Sun, and HP, they could have their in-house lawyers train upper management on anti-trust law and what they can and cannot do as a monopoly. They can take new opportunities as they arise, but a company in their position needs to be aware of the legal landscape, an awareness MS has fastidiously avoided cultivating.

And again, it’s not illegal to be a giant. It’s illegal as a giant to use your fists.

You’re romanticizing the issue. You’re making it a black-and-white dichotomy: strive for monopoly, or just stay home. It’s not that simple. I think Microsoft would still be approximately where they are today without the blantant anti-trust violations.

17

This is how anti-trust suits operate. This is the only way they can operate, as far as I can tell.

No; if it is, then all the anti-microsoft corporations are guilty of it too, and I would expect to see them in court. The article you linked me too outlined just such a thought, as a matter of fact.

OK, so you feel the browser war tactics are what got MS into hot water. They should have let competition rule there and be done with it. Fair enough. Is that it though?

Not if the ALCOA case sets any precident.

For what will be the last time whether or not you do not cease and desist, I brought this here to hear other arguments, not to try and make a case one way or the other myself. I welcome your comments and can listen to your reasoning, but please leave my opinions out of it, unless you think the only way to support yours is to destroy mine. I would like to think that your arguments could stand on their own merit, and I think they probably would, and that is really what I was hoping for anyway.

I am romanticizing nothing; my understanding leads me to believe that there was sort of a dichotomy. I am less interested in knowing why I am wrong than why you are right. Perhaps this isn’t the standard tactic. Sorry if it is that inconveneincing.

18

They weren’t asked to rule on the Findings of Fact, and thus weren’t allowed to. Appeals courts can only rule on questions asked to them.

Interestingly, It came out in the arguments at appeal, the at least some of the Appeals court wanted to take up the Findings. That wouldn’t happen if they thought the findings were correct.

Jackson is perhaps quite good on legal matters. But he didn’t understand more than 10% of the testimony, He wasn’t even awake for more than half of it. He basically rubber stamped all of the DOJ’s arguments because he wasn’t competent to do anything else and he didn’t LIKE Bill.

I agree that Bill will never win a popularity contest. But the law isn’t supposed to care about stuff like that.

19

You sir, are making things up. This did not happen.

20

See my cites in the other MS anti-trust thread.

And next time, be sure that I can’t cite what I’m talking about before accusing me of deliberate deception.

Alright, in my opinion, Microsoft could have been approximately as successful on the quality of their software and their legitimate marketing without the illegal strongarming of their business partners. Their software has never been the best of breed (at least until very mature versions), but it’s usually of sufficient quality that its lower price could command a strong market.

Aggressive competition and anti-trust violations are not the same thing. Lots of companies of similar size (Sun, IBM, etc.) are healthy, successful companies that dominate particular fields without abusively monopolizing them.