Microsoft Hatred FAQ

Steven D'Aprano steve at REMOVETHIScyber.com.au
Sat Oct 15 11:18:54 CEST 2005


I was going to sit this one out, as being obvious flame-bait, but Jeroen's
post appears to be reasonable, and yet so utterly wrong that it needs to
be responded to.

On Sat, 15 Oct 2005 07:52:57 +0200, Jeroen Wenting wrote:

>>>    Q: Microsoft's Operating System is used over 90% of PCs. If that's
>>>not monopoly, i don't know what is.
>>
>> They got where they are  by CHEATING.  That is why they are evil, not
>> because they have a large market share.
> 
> no, they got their by clever marketing and generally having a product that 
> was easier to use for the average user than anything the competition made 
> and a lot more powerful than other products created for their main target 
> market.

That's what Microsoft would like us to be believe, but it isn't what the
historical record shows.

The historical facts show that Microsoft had one piece of good fortune,
which they leveraged into the massive corporate empire they have today:
the US Justice Department investigated IBM for abuse of monopoly position.

That investigation lead to IBM playing it safe when they decided to move
into the personal computer market with the IBM Junior. Instead of making
their own operating system, they went out and licenced one from Microsoft.
And because they were desperate to licence something *quickly*, they
foolishly signed an agreement with Microsoft whereby Microsoft got paid
for every PC that they shipped *regardless of whether it had PC-DOS or not*.

IBM did the work to make PC-DOS a de facto standard, which allowed
Microsoft to foist that same sort of agreement on PC clone manufacturers.
This was anti-competitive in the extreme. Who in the highly competitive,
low-margin PC business would commit economic suicide by paying Microsoft
for DOS, and pay another operating system manufacturer as well, unless the
customer asked for the other operating system? The result was, everybody
shipped with MS-DOS, and competition got a bullet in the head.

This was illegal, and in the early 1990s the US Justice Department slapped
Microsoft with a consent decree where Microsoft agreed to stop breaking
the law and the DoJ agreed not to prosecute.

(To see how much they have stopped, you just try buying a laptop or
a Tier One PC with no operating system or something other than Windows.
The Tier One vendors won't do it, or if they do, you pay just as much for
the operating system free PC as the one with Windows. Hands up anyone who
thinks that Dell gets Windows for free?)

Even with the luck of IBM's foolish mistake, Microsoft couldn't quite
knock out their last operating system competitor, DR-DOS. And that's where
they got really dirty. Months before Windows 3.1 was released, they
started sending out test versions of Windows to journalists to review. In
those days, Windows ran as an application on top of DOS. Journalists
discovered that Windows generated an error on DR-DOS. In their reviews,
they of course reported that Windows wouldn't run on DR-DOS. This
effectively killed DR-DOS -- consumers wanted an operating system that
would run Windows.

When Windows was released, a few IT professionals noticed that it would
run under DR-DOS. Of course it was too late now: the DR-DOS market was
effectively gone, except for a few diehards. One of these people was
Andrew Schulman, who wondered why there was a great big piece of encrypted
code inside the review version of Windows 3.1, with a flag that shut the
test off in the release version.

Schulman wrote:

"Whether in spite or because of the books Undocumented DOS and
Undocumented Windows, I've often had to publicly defend Microsoft against
what I felt were acts of scapegoating from whining competitors ..."

No enemy of Microsoft is he.

Schulman discovered that this code had no purpose except to detect DR-DOS,
and then put up a misleading and pointless warning message.

For details, see: http://www.ddj.com/documents/s=1030/ddj9309d/9309d.htm

See also:

http://www.maxframe.com/DR/Info/fullstory/factrel.html
http://encyclopedia.laborlawtalk.com/Microsoft#Monopoly_and_legal_issues
http://www.base.com/software-patents/articles/stac.html

Microsoft has *repeatedly* been found guilty of engaging in illegal
practices, including outright theft of code, perjury ("oh no judge, this
is not a doctored video"), breaking non-disclosure agreements, misleading
conduct, patent and copyright infringement, and breach of contract. In
addition, they have engaged in unscrupulous and unethical behaviour,
including "astro-turf" media campaigns where they have written letters on
behalf of non-existent and dead people to pretend that they had more
community support than they really have.

Perhaps my favourite example of Microsoft's behaviour is what they did to
the inventors of Internet Explorer. IE was originally called Mosaic, one
of the first graphical web browsers in existence. Mosaic was licenced from
Spyglass, on the basis of a percentage of sales. Microsoft then promptly
bundled the re-named Mosaic/IE with Windows, making IE sales equal to (can
you do the maths?) zero.

Let's see now... some percentage of zero is... zero.


> Microsoft isn't evil, they're not a monopoly either.
> If they were a monopoly they'd have 100% of the market and there'd be no 
> other software manufacturers at all.

So according to Jeroen, if every computer in the world ran Windows,
except for one thrity-year-old Amstrad in somebody's basement, Microsoft
wouldn't have a monopoly. Yeah, right. 

In law and in economics, a monopoly does not mean that there are
absolutely no competitors to a supplier. That is an overly literal
definition, and is about as sensible as arguing that a fly swatter isn't a
fly swatter because you can also use it to squish spiders.

At the time the US Justice Department tackled Microsoft (for the *second*
time, I should point out) Microsoft had approximately 98% of all desktop
PC operating systems in the USA, and approximately the same around the
world. 98% is close enough to 100% to be a monopoly. Economically, 80% is
probably enough market share to be effectively a monopoly (although that
depends on precisely what market we're talking about).

Today, Microsoft's share of the desktop has fallen to perhaps 93% or
90%, still giving them effective monopoly power.


> Prices would be far far higher than they are today, like they were back in 
> the days before Microsoft started competing with the likes of Ashton Tate 
> and WordPerfect corporation by offering similar products at 20% the price 
> (which is the real reason they got to be top dog, they delivered a working 
> product for a fraction of the price their competition did, and the 
> competition couldn't drop their prices that much and remain profitable).

In Jeroen's dreams. Perhaps some reality check is needed here. In 1989, I
purchased MS Word for approximately $100, and Word Perfect for about $90.
(Prices are in Australian dollars, not adjusted for inflation.) Word
Perfect was discounted somewhat because it was a "cross-grade" from Word.
If I recall correctly, the normal price was about $120. Excel was also
about $100.

By contrast, I paid $4000 for my PC and a dot matrix printer.

Today, I can buy a PC for $500, a monitor for an extra $100, and a laser
printer for another $200 dollars: $800 all up. The recommended retail
price of MS Office is $1000. My PC has plummeted in price, falling by 80%,
while MS Office has gone up in price by 150%.

But who pays recommended retail price on Office? A more realistic price is
the OEM price, which is about $300 here. So while my PC has become
thousands of times more powerful, it has fallen in price by 80%, while
Word and Excel have had only incremental improvements, but have increased
in price by 50%.

That is a textbook example of monopoly power in action.


> Without Microsoft 90% of us would never have seen a computer more
> powerful than a ZX-81 and 90% of the rest of us would never have used
> only dumb mainframe terminals.
> IBM's prediction that there would be 5 computers (not counting game
> computers like the Comodores and Spectrums) by 2000 would likely have
> come true.

Except for, oh I don't know, Apple, Apricot, Amstrad, Wang, Xerox, and all
the other thousands of computer companies that existed before Microsoft
destroyed competition in the software arena.

IBM's prediction, for the record, was well before Steve Jobs and Steve
Wozniak had invented the personal computer with the Apple. IBM's
prediction at a time when everybody thought that computers would cost
billions of dollars and be as large as a house. Trying to credit Microsoft
for the invention of the PC is foolish to the extreme. Microsoft didn't
even exist when the Apple II was bringing computers to ordinary people.



-- 
Steven.




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