Microsoft's Monopoly on Operating Systems
Posted: Tuesday, August 02, 2005
by calcman05
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When a person hears the word “computer", a lot of the time the first thing that runs through their mind is Microsoft. Why is that? It is because Microsoft is a gigantic company that dominates the computer industry. That domination is also known as a monopoly.
AA monopoly is when a company has unfair advantages over other companies in the same market. Microsoft is in the natural monopoly category because of how most of its dominance was achieved through people being connected to other people (by computers) (Leibowitz). Monopolies are a big threat to people because of the harsh consequences on the consumers end. When Monopolies control everything, the consumers are left on the receiving end if an uncontrollable raw deal. Microsoft’s monopoly on operating systems has stifled competition and harmed the consumers as a whole.
Microsoft wasn’t always this way. When it was first founded by Bill Gates and Paul Allen in 1975, it was just a small company with a goal of surviving. Between Apple and IBM there was plenty of competition going on, which left Microsoft little room to barge in. When Microsoft finally released its first operating system, DOS, it had to compete with the new Macintosh computer that was just released by Apple. DOS was a command line based operating systems which means that it was entirely text based (Liebowitz). All that was seen was a black screen with white text commands. Users would have to know the path name of the file that they wanted in order to use it. It was not user friendly at all and was usually very intimidating to new users. On the other hand Apple had a General User Interface (GUI) based operating system, which meant that it was represented graphically (Liebowitz). With the Macintosh, users could move a mouse that would move a pointer on the screen and click on the file that they wanted to open or run. A GUI based system is much more user friendly compared to a command prompt system. Although most computer users prefer to use a GUI based operating system, DOS wass chosen more and more often because of its small size and its speed even with its absence of a good GUI (Liebowitz). The size of the code that made up DOS was a fraction of what was in the Apple operating system. Because of its small memory requirement, it allowed it to run much faster. These features allowed DOS to trample its competition. DOS was just the start of Microsoft’s history.
With the success of DOS behind it, Microsoft knew that it had to keep its operating systems at the top. To achieve this, Microsoft asked lots of software companies to make programs only compatible with DOS (Liebowitz). If a company did that for Microsoft, they would in turn receive free software. Since programming in DOS is much easier than Apple’s code, lots of programmers began programming in DOS (Liebowitz). Now with many software companies programming DOS instead of Apple’s language, Microsoft could begin to take control. This was the start of Microsoft’s growth and success. With an abundance of programs running under DOS, it was a big seller. In order for users to want an operating system, it has to have lots of software to run on it. Because of the limited software available for Apple, its grasp on the computer industry began to slip.
There has been word that hidden in the mass of source code of DOS, was code that wouldn’t allow Lotus 1-2-3 , an office suite program, to run properly on Microsoft’s operating system (Microsoft, Wikopedia). This so called “bug" didn’t hurt DOS as much as it hurt the company that made Lotus 1-2-3 . People believed that the makers of the office suite program were making bad programs filled with bugs and in turn stopped buying their software. This greatly hurt the software company. This was all caused by a deliberate act by DOS programmers. Doing business this way is not legal and that is why in the recent anti-trust case against Microsoft, the courts found that Microsoft engaged in “unfair and anti-competitive business tactics" (Microsoft, Wikopedia).
Microsoft’s next step after DOS was going to be a GUI based operating system that was still based on DOS but sported a new user-friendly interface. It started with Windows 1.0, then, Windows 2.0, Windows 3.0, Windows 95, Windows 98, Windows ME, Windows 2000, and currently Windows XP (Windows…). All of these operating systems were looked upon as top-of-the-line for their time.
These operating systems were the reason that Microsoft grew so quickly from a small company. Each of these was a continuation of the previous one with the exception of more features, a quicker processing time, and the fixing of the previous bugs. But, knowing Microsoft, along with those new features come new bugs and holes that can be exploited. Microsoft is known for its security holes and bugs that come with its operating systems. These lapses in security pose a big threat for all users because of the vulnerability that hackers take advantage of. Users continuously have to download new security patches to fix the exploitations that should not have occurred in the first place. According to The Bellingham Herald, Microsoft released eight new security patches within the last month that fix vulnerabilities that allow hackers complete control over an affected system (Microsoft releases…). This shows how vulnerable a computer running Windows is. Update after update must be downloaded in order to be safe.
When a person starts with any of these operating systems they are basically locked-in forever because switching systems is more of a pain than a reward, and also, each operating system requires constant updating to function correctly. This is called backward compatibility. That is when a person must keep upgrading their software all the time to keep up with Microsoft’s updates (Macinta). While upgrading is not a “must do" situation, it is a time in which you have to weigh the positive and negative effects of upgrading.
There are many choices when you upgrade your system. One of the easier choices is to update your current operating system to the newest and latest one from the same company. If you do this, then it is guaranteed that everything will be compatible. An example of this is if someone upgrades from Windows 2000 to Windows XP. Not only will the user’s previous programs be compatible, but it also has more features and has a faster processing time. This leads up to another choice which is to completely dispose of Microsoft’s operating system and go to a different company. One can easily do this by unloading Windows and loading a new operating system, Linux for example. Many people would consider thinking of this switch because of how powerful, fast, and customizable Linux is in comparison to any Windows operating systems. But there are some downsides to switching. For example, lots of software that is run daily by the user on a Windows system will not be able to run on Linux or comparable operating systems. Why is that? When Microsoft creates its operating system, it makes it so only some programs and files are compatible with it. It is comparable to how DOS was programmed to not run Lotus 1-2-3 , but in a bigger spectrum (Microsoft, Wikopedia). People who have already chosen an operating system have to consider every upgrade and compare it to the advantages of the new product and see if the advantages outweigh the disadvantages (Liebowitz). Because of the huge compatibility issues that arise with other operating systems, most people decide either to update their system to a newer version of Windows or stay with their current operating system as is. Because of this fact, over 90 percent of personal computer owners are running some form of Microsoft Windows (Microsoft’s Monopoly). That leaves little or no room for competition to have a chance.
A person might think “So what, Microsoft is a successful company that has risen from nothing and is leading the innovation industry." All of that is true, but what they have done to achieve this state is illegal. Many companies that are suing Microsoft for stealing software code or for other matters (Microsoft, Wikopedia). These lawsuits include Caldera, the maker of DRDOS 6, a version of Microsoft’s DOS operating system. Caldera is accusing Microsoft of modifying Windows 3.1 to not properly run its program. Also Stac Electronics, a software development company, accused Microsoft of stealing its data compression code and using it as its own in MS-DOS 6. Another lawsuit was filed from SpyGlass, the maker of the Mosaic web browser. They claim that they leased their browser to Microsoft in turn for a percentage of its sales. Microsoft then stole the code and integrated it into a new web browser called Internet Explorer and gave the software away for free. Internet Explorer is now bundled with all Windows operating systems, along with Windows Media Player. Opera, another competition web browser, accused Microsoft of intentionally making its MSN internet service incompatible with its browser. A very large suit was filed by Sun Microsystems, the makers of Java, which stated that Microsoft violated a contract by including a modified version of Java in the Windows operating system. Microsoft turned around and stopped using Java and switched to a similar application called ActiveX. A suit filed from Apple Computers accused Microsoft of stealing some of its QuickTime code and putting it in its own Windows Media Player. What was Microsoft’s defense against these allegations and others? “It’s a tough world out there, and it (Microsoft) has to fight hard to get where it is today" (When is a …). Microsoft also stated that consumers have actually gained from its actions because personal computer users are getting free internet software and cheaper computers (When is a …).
These actions, and the response by Microsoft clearly back the facts that point to them as a monopoly. It seems that Microsoft comes out the winner in every market that it dives into. Every time a new market opens up, for example, MP3 players, portable media players, gaming systems, etc Microsoft will go into that market with full force. That force not only includes making products that will crush competition, but it also includes scare tactics that influence the competition to pull out of the market (Bill Gates…). In addition to that, it also buys out the advertisers of competition products (Case against…). Kurt Brecheisen, from GTI, stated that Microsoft paid out $40 million dollars to a Dutch internet provider if it agreed to no longer support Netscape, an Internet Explorer rival. In addition to the $40 million dollars, Microsoft gave the company great publicity and new software (Case against…). With that much money and opportunity waving in front of the internet provider, it gave in and began not supporting Netscape in its software.
This suffocation of competition in many markets is the key to Microsoft’s success. If there is a possible way for Microsoft to excel in a market, it will do it. The lucrative markets are where Microsoft is working. Instead of trying to invent new products that serve new purposes, they just go into markets that have a big demand already (Bill Gates…). Microsoft will do anything to take over a market, including stealing other company’s software code, buying out competitors directly, or through their advertisers.
The way that these practices hurt consumers as a whole is astronomical. As we well know, competition causes innovation, and competition is something that Microsoft doesn’t have. When there are two companies, almost equal in power, there is going to be a great desire to put out a product that is superior to the others. And on the flip side, the other company is going to try and top the competitor’s new product. This makes the advancements of technology skyrocket at rates that don’t ever happen with a single company market. Take into account the great advancement of processor technology since AMD has come into the market. AMD is a innovative company that creates computer components such as chipsets and processors. It is now the biggest competitor for Intel, the major processor building company. Now that AMD has not only entered the 32-bit technology but the 64-bit as well, Intel is coming out with its own 64-bit Pentium 4 processors (Hill). Before AMD came to life, a 64-bit processor wasn’t even on the drawing board for Intel. Also, with two or more competitors fighting over a market, prices drop because of each company trying to get the bottom dollar. This is great for the consumer in many ways. First, it allows them to get their hands on high quality, new technology that offers them much more speed and adaptability. Also, instead of paying high prices for those high performance processors, they are paying a much lower price. Innovation needs to have a force behind it, driving it to do better and come up with new technology. This is how competition works, companies fighting for the top spot of a market. When this happens, consumers are on the receiving end of a good deal. Because consumers are what make up the market, they should get the best technology available, for a fair price.
This doesn’t happen in many of the markets in which Microsoft is a part of. Prices stay very high and the products that are getting unveiled are inferior. As stated by Stan Liebowitz, monopolies will restrict output of a product in order to elevate the price consumers must pay for them (Liebowitz). A quote in 1998 by Ralph Nader sums it up pretty well, “Microsoft’s agenda isn’t innovation, it’s imitation as well as the imposition of suffocating control over user choices and an ever widening monopoly" (Policy Debate…). As you can see, a monopoly not only stifles competition, and innovation but it also hurts the consumers as well.
Works Cited
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Liebowitz, Stan. Winners, Losers and Microsoft, Competition and Antitrust in High Technology , Oakland California : The Independent Institute, 2001.
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