With all of the talks of terrorism, the economy and tragedy on Black Friday, you may have missed a very interesting piece of news: the market is working. Microsoft, who once held approximately 97% of the market for desktop computer operating systems, is now showing strong signs of being down below 90% of the market share now. With Apple's market share starting to approach double digits once more, and Linux creeping up on them on the server side, competition is once again alive and well.
In the late 1990s, it was taken for granted that Microsoft was unbeatable. Apple was dying, Linux never made it on most regulators' radars, and Netscape was bitterly regretting the entire process that turned Netscape Navigator into the loathsome Netscape Communicator suite which even Microsoft could deride as a pile of spaghetti code foisted on the public. Microsoft's position seemed as sure and immutable to most observers as that of the British Empire in the 19th century.
Yet, in the early millennium, the wheels of change started to grind once more and Microsoft found itself caught off guard. Apple released the Unix-based MacOS X which catapulted them from a minor player with an outdated operating system, right into a market position that could span mobile phones to scientific workstations. Open source developers increasingly began to encroach on Microsoft's position in the server market, and Google quickly went from a small start up company to a corporate juggernaut capable of defeating Microsoft in several major Internet markets.
Regulators could not have foreseen this turn events. They also could not have foreseen how Mozilla would go from a barely alive project at America Online, to a non-profit that produces a wildly popular competitor to Internet Explorer that is threatening to do it, when Internet Explorer did to Netscape Communicator. Had you testified in the Microsoft antitrust trial that in 2008, there would be an open source office suite capable of working as a daily replacement to Microsoft Office for most small businesses and home users, you would have been written off as an idealistic geek.
It took a while, longer than social engineers may have liked, but Microsoft is now facing the prospect of being just one of many competitors in many new markets. It has a very healthy presence in the mobile device market, but faces competition every bit as capable from Nokia, Research in Motion and Apple. Nintendo is a force to be reckoned with in the video game market, and Sony is still holding on despite their myriad mistakes with the Playstation 3. Microsoft is more of a bit player than a potential market leader in online search and advertising, and their platform tools for developing web applications have to play nice with everyone else because they face so much competition both as a server platform provider and as a browser vendor.
The competition and other issues they've faced have forced Microsoft to put more effort into innovating and competing. Their .NET platform is a superb competitor to the Java platform, and was arguably more open, sooner than Java until the recent decisions by Sun Microsystems to fully open source the Java Development Kit (which includes the Runtime Environment). Times have changed, and they know that they cannot be complacent anymore, especially after the deployment debacle that was Windows Vista.
In hindsight, we can see how unnecessary the government action really was. In fact, letting them off the hook was one of the few things that the Bush Administration did right. There were signs even back in 2001 and 2002 that serious momentum had already been building up against them in the market, and it was time to let them go.
The declining power of Microsoft, and the ascendancy of its rivals should serve as a warning to people who are absolutely convinced that government action is needed to keep competition alive. Things are not always as they appear. Back in the 1990s, it was conventional wisdom that Microsoft's hard-nosed dealings with original equipment manufacturers (OEMs) was what kept alternative operating systems off the average desktop PC. Yet neither Apple nor Linux have had to rely on those OEMs to gain serious market share gains. Today, netbooks typically come with Ubuntu Linux as an option for those that want to forego Windows and most low-end Macs are well within the price range of many computer buyers.
Looking back we can see that government action was not necessary because the market was already correcting itself. Microsoft controlled access to and sought far too much wealth for competitors to not want to find new ways to kick them out of the way. The lesson for those looking to manipulate the market is that corporate power is much more tenuous than they believe it to be.
One generation's seemingly unstoppable corporate powerhouse often ends up being another generation's company struggling to escape obsolescence. It happened to IBM, then it happened to Microsoft, and it will happen to Google and Apple too if they grow complacent as Microsoft did. When the market is allowed to operate, that's how it works.
In the late 1990s, it was taken for granted that Microsoft was unbeatable. Apple was dying, Linux never made it on most regulators' radars, and Netscape was bitterly regretting the entire process that turned Netscape Navigator into the loathsome Netscape Communicator suite which even Microsoft could deride as a pile of spaghetti code foisted on the public. Microsoft's position seemed as sure and immutable to most observers as that of the British Empire in the 19th century.
Yet, in the early millennium, the wheels of change started to grind once more and Microsoft found itself caught off guard. Apple released the Unix-based MacOS X which catapulted them from a minor player with an outdated operating system, right into a market position that could span mobile phones to scientific workstations. Open source developers increasingly began to encroach on Microsoft's position in the server market, and Google quickly went from a small start up company to a corporate juggernaut capable of defeating Microsoft in several major Internet markets.
Regulators could not have foreseen this turn events. They also could not have foreseen how Mozilla would go from a barely alive project at America Online, to a non-profit that produces a wildly popular competitor to Internet Explorer that is threatening to do it, when Internet Explorer did to Netscape Communicator. Had you testified in the Microsoft antitrust trial that in 2008, there would be an open source office suite capable of working as a daily replacement to Microsoft Office for most small businesses and home users, you would have been written off as an idealistic geek.
It took a while, longer than social engineers may have liked, but Microsoft is now facing the prospect of being just one of many competitors in many new markets. It has a very healthy presence in the mobile device market, but faces competition every bit as capable from Nokia, Research in Motion and Apple. Nintendo is a force to be reckoned with in the video game market, and Sony is still holding on despite their myriad mistakes with the Playstation 3. Microsoft is more of a bit player than a potential market leader in online search and advertising, and their platform tools for developing web applications have to play nice with everyone else because they face so much competition both as a server platform provider and as a browser vendor.
The competition and other issues they've faced have forced Microsoft to put more effort into innovating and competing. Their .NET platform is a superb competitor to the Java platform, and was arguably more open, sooner than Java until the recent decisions by Sun Microsystems to fully open source the Java Development Kit (which includes the Runtime Environment). Times have changed, and they know that they cannot be complacent anymore, especially after the deployment debacle that was Windows Vista.
In hindsight, we can see how unnecessary the government action really was. In fact, letting them off the hook was one of the few things that the Bush Administration did right. There were signs even back in 2001 and 2002 that serious momentum had already been building up against them in the market, and it was time to let them go.
The declining power of Microsoft, and the ascendancy of its rivals should serve as a warning to people who are absolutely convinced that government action is needed to keep competition alive. Things are not always as they appear. Back in the 1990s, it was conventional wisdom that Microsoft's hard-nosed dealings with original equipment manufacturers (OEMs) was what kept alternative operating systems off the average desktop PC. Yet neither Apple nor Linux have had to rely on those OEMs to gain serious market share gains. Today, netbooks typically come with Ubuntu Linux as an option for those that want to forego Windows and most low-end Macs are well within the price range of many computer buyers.
Looking back we can see that government action was not necessary because the market was already correcting itself. Microsoft controlled access to and sought far too much wealth for competitors to not want to find new ways to kick them out of the way. The lesson for those looking to manipulate the market is that corporate power is much more tenuous than they believe it to be.
One generation's seemingly unstoppable corporate powerhouse often ends up being another generation's company struggling to escape obsolescence. It happened to IBM, then it happened to Microsoft, and it will happen to Google and Apple too if they grow complacent as Microsoft did. When the market is allowed to operate, that's how it works.
I agree with much of what you said. But not all of it. Netbooks do not "typically come with Ubuntu". The number is 30%. That's how many netbooks come preloaded with some form of Linux. Linux grew an astounding 200% in the last few months. Yep, it went from .86% to 1.9% or thereabouts. Less than 2% in 17 years. At that rate Linux just might hit the 50% mark around 2030. The market is taking a long time to balance out and in that time billions of dollars have been spent needlessly on anti-malware programs. People suffer with their computers unless they are a power user. Thousands of web sites have been hit with DDS attacks from hordes of Windows zombies costing millions in recovery and prevention. If our Government had simply required that computers must be sold separately from the operating system then Linux would be much further along in capturing the PC market. And that would benefit everyone, wouldn't it?
I said they come with Ubuntu as an option :)
Whether or not users choose that option is a different story, but the fact is, Ubuntu is generally an option for netbook buyers.
If you think people have problems keeping Windows running, just imagine the problems with them getting it up and running in the first place!
I disagree with your premise that Linux would have gained traction. BeOS would certainly have had a fairer shot, and very well might have 20% of the market right now, but desktop Linux wasn't a reasonable option for most people until about 2, maybe 3, years ago. Even today, it's still not as stable and responsive as a good installation of MacOS X or even Windows XP.
Microsoft is unfortunately caught in a conundrum on the security side of things. They've been pushing people to adopt good security practices when writing code with .NET, but they have a very hard time getting most developers to write their code so that it can run as an unprivileged user. That's a significant advantage that Linux and MacOS X have had. Microsoft shot themselves in the foot by not build security limits into Win32 when they ported it to 9X from NT, which got a lot of developers of consumer software for Windows accustomed to the idea that their users would be running as an administrator account. If Microsoft could close that hole, I think you would find that a significant amount of security holes on Windows would go away.
If Linux wasn't an option to install until 2 or 3 years ago then that's when it would start to take off. BeOS might have had 20% by then but Linux would have had more that 2% for sure.
Nobody would be installing there own OS. Remember, I said sold separately from the OS not uninstalled. :)
Much of Microsoft's security practices apply to their OS only. Never connect to the Internet with out malware protection. That's unnecessary with Linux because it was designed from the start to be malware resistant (not impervious). Microsoft's approach to security is reactive. You're right, they're stuck. But changing it will require a complete rewrite, not simply glomming on some patches. There business model is to sell software. They made choices and now they are stuck with them.
I'm not sure I follow you. If they are sold separately, then that means that the PC you get from Dell or others would have no OS on it. If it were just a matter of you have to also buy the OS from the OEM as a separate product, I would hazard to guess that Microsoft would have gotten its tentacles in there in some fashion similar to its existing relationships with OEMs.
It won't require a rewrite of their software, but rather a rewrite of a lot of software for Windows. The biggest advantage that Linux has is that developers were never allowed to write software under the assumption that they could read and write the entire file system. Windows developers were allowed to have that assumption under Windows 3.1 and 9X, which is why Windows XP and Vista still have to allow people to run their apps as admins.
Imagine how insecure Linux would be if most of your software had to be run as root. That's the situation that Microsoft got itself into because they cannot afford to cut off all of the programs that need admin privileges for no good reason other than they want to put a DLL somewhere other than their own directory, or write data to arbitrary locations outside of the user's home folder. If Microsoft could cut off all of that software in Windows 7, and make all future versions of Windows software behave as though it were running in an unprivileged environment, you'd see Windows security quickly begin to approach the same level as MacOS X for the average user.