Microsoft Hatred FAQ 5139

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

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 mbuttive 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-compebreastive in the extreme. Who in the highly compebreastive, low-margin PC business would commit economic dissolution 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 compebreastion 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 compebreastor, 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 end 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

"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 compebreastors ..."

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.

See also:

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 Spyglbutt, 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.

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 compebreastors 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.

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.

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 compebreastion 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.