Justice? Microsoft needs more worthy competitors
By , Tech Update
February 28, 2002
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In response to "Can justice cope with technology?" reader Doug Strait writes:

As an IBM employee in the 1960s through the 1980s I watched with amazement and bias as the government tried to rein in IBM's overwhelming power in the marketplace. The government failed, even though a consent decree, which followed an incredibly expensive litigation that would have bankrupted most companies, was finally agreed to.

I lived in IBM's technical and business management environment during my career there and was impressed with the inability of standards organizations to come up with standards that fairly addressed everyone's requirements and didn't give one company significant market advantages over their competitors.

Everyone now knows it was IBM's position in the PC marketplace that enabled an unofficial standard to emerge in the personal computing field. No one expected Intel and Microsoft to run away with the brass ring except some of us on the inside who saw IBM's senior management treat the PC as a minor player in the client marketplace. They were confident that IBM's control of corporate computer centers would be where the money was spent and that IBM would be able to protect that market because the company had better products and solutions that could ensure continued dominance.

Having ceded that market niche to anyone who wanted it, IBM opened the door to an industry of creative entrepreneurial technologists to build the basis for a new environment with IBM's stamp of approval and encouragement.

Microsoft with Intel simply took advantage of that by aggressively pricing an open architecture that enabled millions of creative people to invest in and subsequently benefit from the opportunity to create and exploit the thousands of applications waiting to be discovered and developed.

Sun had a similar opportunity but choose to keep its prices too high to enable the largest creative and entrepreneurial population from accessing their technology. (Most people would agree that Sun would have been a more desirable technology to begin with than the Intel platform.)

Once the base was laid with the Intel and Microsoft platforms, only a major business mistake--such as the one IBM made when they ignored the PC market--could unseat their incumbency.

So far the first opportunity to do that was with the Internet. However, Microsoft, unlike IBM, was unwilling to let the upstarts have a pass to exploit that market without interference from Microsoft's dominant position. So a new technology base is being laid and it is at the expense of many companies who can either challenge that position or direct their energies in the direction of exploiting that new marketplace with new applications and features. The smart ones are developing ways to more effectively utilize the resources that Microsoft has put in place.

We have at least three platforms in the marketplace, including the Intel/Microsoft platform, Unix/Linux platform, and even IBM's OS. Unfortunately, none of the competing vendors in those market spaces have seen fit to adopt a Microsoft/Intel-like strategy of getting a product into the low cost space to enable volumes to rise and get creative people to invest in applications based on the potential market available.

As long as the market remains as it is, Microsoft will continue to provide more and more function for less cost than anyone else is willing or able to provide. The competitive market will exist for those capabilities Microsoft does not regard as strategically important to their continued control of the marketplace. That was exactly how IBM played the game until their strategic blunder with the PC.

Examples of Microsoft's encroachment into previously available market spaces include document and workflow management. They aren't there yet but are rapidly fielding products that will soon eclipse all but the very strongest providers in that space.

We as system integrators/VARS are watching and preparing to leap when their offerings become capable enough to meet the demands of the market. Their prices are already very attractive.

We don't need a justice system that can move as fast as technology. We need companies willing to employ the kinds of strategies Microsoft is willing to employ to win market share. As long as greed exists coupled with the hope that justice will win for these other companies what they couldn't or wouldn't compete successfully for in the marketplace, we won't find any of them willing to make that commitment.

Doug Strait
President
Dynamic System Solutions, Inc.