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  • From: "Michael D. Thomas" <mdthomas AT mindspring.com>
  • To: "InterNetWorkers" <internetworkers AT franklin.oit.unc.edu>
  • Subject: Re: those dastardly memo nazis
  • Date: Wed, 20 Mar 2002 12:44:30 -0500




>Now, please tell me why it would be evil for me to do a business deal which
was good for both of
>our shareholders and our employees, who, mind you, are individuals like you
and I right here in the
> triangle? Why would it be newsworthy if my partner sent around a memo
saying they wanted an
> exclusive?

I certainly would agree that MS has made absolutely brilliant business
decisions throughout its history.
I also attest that they make world-class software that is best-of-breed in
many markets. As someone
that has served as a Microsoft Press Technical Editor, ASP developer *as
well as* a published book
author on programming in Java and the development lead on several Java
projects (including J2EE
projects), I'd like for you to believe that I've immersed myself in both
religions before coming to this
conclusion.

However.... what's good for the monopoly isn't necessarily good for the
consumer, which is the
reason for anti-monopoly laws.

Now, I don't buy the argument that having a single OS with the kind of
marketshare dominance that
MS has is necessarily bad for the consumer. Consider organizations that have
to support
dozens if not hundreds and thousands of desktops -- life is easier if they
can standardize on one
platform. To make this argument, I think you would also have to conclude
that the VCR market
was better when the consumer had to make the frightening choice between VHS
and Beta at
a time when VCRs weren't so cheap and a VCR purchase was a major household
expense.

....and monopolies aren't necessarily all bad -- when is the last time you
rode an elevator that
wasn't made by Otis? Did you still get where you were going?

But... when a monopoly stifles innovation, then the problems emerge. If you
are a MS employee
or an MS shareholder, then all is good, at least for the near term. Maybe
even for the long term.
I certainly won't begrudge anyone that has found the magic formula to reach
financial independence
early.

And in this particular context, if Dell looked at the entire Linux market
and said, "Screw that! That's a horrible
business to be in!" then I'm a-okay with the whole situation. However, if
that decision was even partially
made b/c their monopoly business partner applied pressure that carries force
b/c of their monopoly
position, then MS is being a bad monopoly.

The implication of this behavior? The market doesn't work. The retailing and
distribution of computers
has long since reached maturity. I guess I *could* go try to sell Linux PC's
but it simply isn't the way that
I want to spend my days -- even if I did become successful, then Dell,
Compaq/HP, etc. would just swoop
in and take away my entire business b/c I couldn't compete with their
economies of scale.

Such are the problems of entering mature industries.

So the retail desktop market is really left to just a couple of players. Is
there a viable and sizable market
for desktop Linux? Is it a good business decision for Dell to be in the
market? I don't know the answers
to these questions. However, I do know that if MS is using monopolistic
power to keep Dell from
properly exploring this market, then many loose b/c this particular path of
innovation is left
unexplored.

Does this mean that I won't admire MS for it's brilliant business acumen?
No. But there is a larger
question of fairness and what is best for the market as a whole. In this
particular case, I think
that it is more than possible for thousands (if not millions) of
email/web-only
computers to be sold at a price < $200, possibly much less. I think that the
retailers are as blind
to this as Henry Ford II was to the market for compact cars in the early
'70's when he said "mini-cars,
mini-profits."

Now, the Japanese automakers ate Ford's lunch. But who can be expected to
eat Dell's lunch when
Dell is the distributor? Linux (only one component) can't lower it's price
point any further... and setting
up a global brand with the kind of reach that can sell at that price point
isn't a trivial (or inexpensive)
undertaking.









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