The central question of yesterday’s Senate Judiciary Committee hearing was: What constitutes a monopoly in the software industry? And once defined, can Microsoft Corp be said to have one in the operating systems market? And, if it could, then should it not be subject to a different set of rules to the rest of the […]
The central question of yesterday’s Senate Judiciary Committee hearing was: What constitutes a monopoly in the software industry? And once defined, can Microsoft Corp be said to have one in the operating systems market? And, if it could, then should it not be subject to a different set of rules to the rest of the software industry? Most of those present, both on the committee and on the panel thought Microsoft’s position did – with more than 90% of the PC operating system market – constitute a monopoly. Obviously Bill Gates would not concede as much, and he repeatedly pointed to the situation at the time of the creation of Microsoft Corp, when IBM Corp dominated the entire computer industry. The people who feared IBM were wrong, said Gates. Sun Microsystems Inc chief Scott McNealy countered that the situation now is completely different because when IBM was dominant, very few of us touched computers. Netscape Communications Corp CEO Jim Barksdale used the audience in the committee room to demonstrate his opinion, continuing McNealy’s theme. How many of them use a PC (not counting Macintosh machines), he asked? Everyone put their hand up. How many of them did not use a Microsoft operating system? Nobody raised their hand. How many used Netscape Navigator? More than half indicated they did, to which Barksdale replied God bless you. He concluded everybody hates a monopoly unless they’ve got one. Venture capitalist and columnist Stewart Alsop, who was ostensibly brought in to balance the anti-Microsoft slant, said that in his opinion Microsoft has managed to gain a monopoly position in operating systems, and he also believed the company would use this to increase its market share in the application and development tools markets – note he did not say the internet. Gates did not directly deny that his company had a monopoly, but instead claimed that operating systems have a short life span – shorter than the six-year Senate term – in which it is born, becomes popular, and then dies. Technology is ever-changing and there is no guarantee that Redmond will dominate in years to come, said Gates. Barksdale retorted, regardless of the half- life of software, you cannot have exclusionary tactics in a monopoly. Barksdale, however, was pessimistic, even fatalistic about the chances of Windows being usurped. A few years older than the other panel members he lamented that he does not see Windows being replaced in my lifetime because the prospect of another platform coming along to rival it – in the PC space at least – is just not a likely occurrence and not worth the investment. A betting man would not bet on it, he said. Alsop echoed these sentiments, saying venture capitalists are unwilling to put up money to start-ups trying to take on Microsoft. Gates, perhaps mischievously, said it is simply not true that JavaOS will have no chance of displacing Windows. We don’t even think Sun believes that for a minute, but McNealy said JavaOS doesn’t have a chance if Microsoft is allowed to leverage its monopolies. McNealy explained Sun’s strategy to go after markets in which Microsoft does not yet have a monopoly, such as the embedded market and high-end servers. He pointed to the example of Apple Computer Inc, which had a better product and lost…it’s just about as easy to change the national language of the United States of America, said McNealy.