How Microsoft became a monopoly

Previously, the Apple Mac could have been considered as superior to Intel-based personal computers. The personal computer is, however, catching up . . . just a decade and a half later, thanks to Microsoft's legendary innovation.

Microsoft can thank an accident of history and one great decision for its success. Under IBM's stewardship the PC gained legitimacy as a business tool (the accident); then Microsoft made the operating system widely available (the great decision), permitting the creation of clones, which created a competitive marketplace. The competition drove sales; sales delivered critical mass; critical mass ensured that third-party developers wrote software applications for the PC, which stimulated further demand.

Apple was the real monopoliser, and resisted clones for years. But it wasn't a hugely successful monopoly. Although it is enjoying a renaissance, it's highly unlikely that its global clout will ever make Apple a target for antitrust regulators in the US.

Microsoft - which is hugely successful - became a target. Judge Thomas Penfield Jackson's findings of fact, released in November, state that it is also a monopoly.

Days after learning of the judge's conclusions relating to the evidence presented in the Microsoft antitrust trial, Microsoft chairman and CEO Bill Gates took to the stage at the Comdex conference in Las Vegas. Delivery of a quick joke at lawyers' expense proved that this wasn't going to be a newly contrite Gates.

Indeed not. Gates' original ambition was to put a PC running Microsoft software on every desk. That ambition grew. Next, he wanted to put Microsoft product into the back office, into schools and into the home. That achieved, Gates wanted Microsoft content to flood the Internet, and he wanted to control access.

Bill Gates' latest approach goes one step further: he is evangelising his vision for technologies that will allow people to access the Internet from anywhere, at any time, using any device - using Microsoft software, of course.

One key element in the vision is Windows 2000, due for release on February 17, which is intended to offer a much more robust operating environment than has previously been available in the Windows sphere. The second significant component is the Microsoft-championed XML standard, which will allow Web application transparency.

This latest version of Bill Gates' vision splendid was unveiled eight days after Microsoft learned it was officially viewed as a monopoly. Never mind that US Assistant Attorney General Joel Klein seems to have his heart set on a settlement with the software maker that will likely include deconstructing the company.

Microsoft, while publicly announcing that it wishes to put the matter behind it so it can focus on innovation, is unlikely to agree to a settlement that fails to offer some top spin in its favour. If there is no top spin in a settlement and Judge Jackson backs his findings of fact with findings of law (showing that Microsoft actually broke the law in its scramble toward monopoly status) then Microsoft can deploy its legal cavalry through years of appeals.

Behind Bill Gates' Comdex bravura lies the simple fact that, for the end user, the legal brouhaha in Washington will make little difference to purchasing decisions, and Microsoft knows it. Chief information officers cannot play Canute, ordering the waves of demand from their users to halt until Microsoft's future is resolved. They need systems that will allow end users secure and robust access to the Web. If Windows 2000 meets their needs, they will buy it, whether it shores up Microsoft's monopoly or not, and regardless of the company's wrangle with the US administration.

It might make users a little more inclined to look at alternative solutions, of course, and if these alternatives seem an improvement over Windows 2000, then Microsoft should lose the sale. In an ideal world, that is.

Let's face it, few of us bought Microsoft because it was better or smarter than anything else in the marketplace; just ask Apple. We all bought Microsoft because it was easier. Human nature being what it is, if Microsoft continues to make it easier, then we will continue to buy its products, even if the company is split into several different businesses.

Joel Klein probably suspects this already, but Bill Gates is banking on it.

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Beverley Head

PC World
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