Microsoft & Monopoly

When I played the game “Monopoly” several years back, I had no idea that a monopoly was a bad thing. But trust me, it is. Most of the people I know still think that Microsoft is the greatest software company out there and that MS has done a great service to all of us by bringing Windows to us. I urge them to think again.

Yes, Microsoft created share holder value. It was the one of the fastest growing companies over a long period of time. It sure made a lot of people rich. But it did so often by anti-competitive practices and left people stuck with no choice other than what monopolistic MS offered them.

So why exactly is a monopoly bad for everyone ? Because it stifles innovation. Once there are no worthy competitors in the market, a company can dictate terms. Microsoft did. It shoved poorly built, buggy, insecure, unstable Operating Systems like Windows 3.1, 95, 98 at a high price at us for years because there was hardly any competing product. This it achieved through shrewd business practices for which it has faced extensive litigation. But the damage has already been done.

Here are a couple of examples of their monopolistic practices.
1. Murder of Netscape ( http://en.wikipedia.org/wiki/Browser_wars )
2. Attempt to kill Java (The 1998 anti-monopoly case against Microsoft revealed a Microsoft internal memo. The memo revealed that Microsoft’s “strategic objective” was to “kill cross-platform Java.” by “grow[ing] the polluted Java market.”)

…and there are many others if you care to Google a bit.

The effect a monopoly can have on the market can easily be seen in the Telecom sector in India. Remember the days when the Govt. owned telecom major VSNL had a monopoly on providing Internet service in India for several years ? There was next to no improvement in service for years. VSNL didn’t need to improve. Unreliable, 33 Kbps max data rate over copper phone lines at high costs was the only choice you had. If you didn’t like it, you could do without it. Fast forward only a few years post granting of licenses to private operators and see what we have today. GPRS/EDGE, ADSL, Cable Internet, extensive networks of fibre optics…..overall something which one could not have even imagined if the VSNL monopoly had continued. Now imagine what could have been if Microsoft had not used monopolistic practices in the first place many years ago and allowed competition to develop.

When someone says that Windows XP is easier to use, do ask them to compare the length of time that they have been using Windows to the time they may have spent using the other OS, say a popular variant of Linux like Ubuntu or SUSE. In most cases that I know of, the answer is that the time spent using Windows and Linux is something like 10 years Vs 10 days. So really, one ought to to use the OS a bit before they realize that “the other OS” can be just as easy to use if they used it enough. And in case of Linux, it is usually free of cost which is important when licensing issue are considered.

Cost. Aha…that brings us to the concept of “Total Cost of Ownership” or TCO. Microsoft, which has been losing market share in the Server Operating Systems category to Linux based OSs has recently started projecting itself as having the lower TCO inspite of having a higher licensing fee because of lower costs involved in training staff to use the OS and related software since most users are already familiar with “the MS way” thanks to its monopoly. So you see that despite Linux being cheaper, more secure and more suited for the job for a networked environment, Microsoft still wins. Not because it has a better product. But because it has a monopoly.

And while we are still talking about TCO, a recent news item had me in splits….

The launch of Windows Vista will create more than 50,000 technology jobs in six large European countries and will lead to a flood of economic benefits for companies there, according to a Microsoft-funded IDC study.

Isn’t a new OS supposed to reduce work ? Naah. Not with MS apparently. More people will be needed to be hired to install it. To install the additional hardware it needs. To upgrade it. To fix it. To fix the problems the fixes create…you get the drift, don’t you ?

A lot more money and effort could have gone into developing GUIs for Linux or any other OS. Hardware manufacturers would have provided drivers for Linux by default. Microsoft would have been forced to develop its own OS along more security focussed lines saving all of us incalculable hours of trouble with viruses, crashes, data corruption and intrusions into our privacy. One can go on and on. But in short, we would have had more choice today. And many of these choices would have been better than the best that we do have today had it not been for Microsoft’s monopolistic past.

Do you now feel that you have been affected by Microsoft’s monopoly ? Or are their any other monopolies that come to mind ? Do leave a comment.

---

Possibly related posts: (automatically generated)

• Obama anti-trust chief: Google is a monopoly threat, not Microsoft
• Viva Monopoly!