Microsoft: Testing Market Limits
Here, too, at the basic OS level we are fundamentally well-served by the Intel/Microsoft monopolies. Application developers have a single user system to which to write and we benefit from having everyone's computer function in more or less identical ways--at least at the OS level. (Apple users and others, please save your mail. I know you exist and I'm glad that you are enjoying your chosen desktop.)
The issue here is whether building the browser into the operating system crosses a line that forces action against Microsoft. Browsers are an interesting case. Netscape and Microsoft both give them away for free, feeling that owning mind share is a better bet than trying to get $30 or so from each
of us. Further, Netscape has said publicly that a powerful enough browser wouldn't need an OS like Windows--a clear slap at Microsoft. So Microsoft has done Netscape one better by building an OS feature-laden enough that it does not require a standalone browser.
The real genius of Microsoft's p
lay is not that it will put Netscape out of business. Microsoft already has rendered Netscape fairly impotent. No, the real play is in using the embedded browser to link automatically to MSN, Microsoft's online network. With the embedded browser and a link to MSN, Microsoft plans to make freely available patches and updates to all Microsoft desktop products. This includes the OS and all of Microsoft's applications.
From our discussions with Microsoft, this is intended to be a service that is unavailable from any other application vendor. Other vendors can put up their own Web sites and provide updates with it, but the level of integration with the OS will not be the same. Not only will Microsoft own the OS, it
will own the browser and its applications will be painfully easy to own. Virtually everyone who uses these tools will obviously see a great advantage in having MSN as their subscription service.
How Much Is Too Much?
So, just how many businesses should Microsoft be allowed to control by virtue of its dominance of the desktop OS market? If the answer is anything less than desktop OS and desktop applications and online services, then how should Microsoft be restrained?
Law suits are likely to be filed with regard to building the browser into the Windows97 OS. Perhaps the least decisive thing the courts could do is to simply pass judgment on this one issue; although doing so will clearly lead to drawing a fairly indelible line in the sand. I'd guess that a reasonable argument can be made that an Internet browser is more like a productivity application and less like an operating system utility and, therefore, Microsoft cannot simply include it in the OS as a basic component.
One step more
would force a demarcation between the operating system and applications. Could OS/2 have caught on if buyers knew that applications written to Win32 would work with it--by law? This is going the route that's been taken with telcos or TV, and it's not particularly appealing. In these industries, the govern
ment has forced the standardization of the interface between service providers and customers. The result is that competition can exist, but new standards come at a painfully slow rate. The equivalent for Microsoft would be to force the Win32 APIs out into the public domain with additions to those standards being made by public forums. I really hope this doesn't happen; our industry can't stand innovation being slowed to that point.
Wielding the Big Blade
Alternatively, the Justice Department can always swing the big ax and force Microsoft to remove itself from various markets. However, telling the folks at Microsoft that they can't have an online subscription service or that they must spin off
their desktop applications products seems severe. On the other hand, like AT&T spinning off the regional Bells, it may lead to a more healthy and competitive market place. It also means that we concede the desktop OS as a natural monopoly and regulate Microsoft just like we do the Bells, cable companies and utilities. Again, it sounds like an innovation stifler to me.
While the alternatives are not particularly attractive (at least to me), it is clear that Microsoft has crossed a line and that, in doing so, the company has opened itself to both private and government generated law suits. What this means for the release of Win97, which is ready to enter beta testing with the IE browser fully integrated, is anyone's guess.
Software Giant, Regulate Thyself
My feeling is that just like the TV industry rating its own content, Microsoft would do well to read the tea leaves and pull IE out of Win97. I see much less of a problem with Microsoft including the standalone IE in the Win97 box, but if
Microsoft insists on building it into the operating system, the courts will be left with no choice. The result won't be good for anyone, including Microsoft and its stockholders, and desktop users.
Learning to play fair isn't easy, but it is important. You can't parlay one monopoly into another. We've lived wi
th this rule throughout the industrial age and it makes good sense. Microsoft will have to learn to live with these rules too--or be forced to live with them by government mandate. It comes down to this: We all hate regulation; even the government hates regulation. But if you play fair, you won't be regulated. So why not just play fair?
Art Wittmann can be reached at awittman@nwc.com.
|
REPORTS
ANALYTICS
Follow 
