Why
is Microsoft a Monopoly?
I decided to write this while I was working on “The Real Troubles of
Microsoft.” As I was working on it, I began writing about why Microsoft
became a monopoly because I realized that an explanation was necessary.
At first, I was going to include this in one big article about Microsoft.
But then I realized that my conclusions in this article were diametrically
opposed to the conclusions in the other article. Also, that the combined
article would have been too long and complicated. Sometimes it is better
to write about one idea at a time. Understand, the problem here is the
economics of the computer business. Or rather, the three economies of the
computer business; the hardware economy, the software economy, and the
communications economy. There are three conflicting economic paradigms
at work here, the hardware paradigm, the software paradigm, and the communications
paradigm. This means that when I write about the computer business, I can
easily come to conflicting conclusions. In this case, when I discus why
Microsoft is a monopoly, I am writing about the hardware paradigm and the
communications paradigm. Remember, when Microsoft created DOS and Windows;
they created a hardware standard for the machines that could run the OS,
and they created a communication standard for that allowed the machines
to run a common pool of software. The communications paradigm is what made
them a monopoly. When I discus the “Real Problems of Microsoft,” I am mostly
writing about the Software Paradigm. With that in mind, I started writing.
Finally, I wrote most of this before the prosecutors made their recommendations
on how Microsoft should be broken up, so some of this may be a little dated.
Please read.
Cloning at Apple Computer
As I was writing about the troubles facing Microsoft and the economic
paradigms at work in the computer industry, I started thinking about practical
examples of economic paradigms at work. And, the experiment Apple computer
did with cloning came to mind. In the computer business, there are three
economic paradigms at work; the hardware paradigm, the software paradigm,
and the communications paradigm. Sometimes, these paradigms can conflict
in fundamental ways. When you are in the business of making both the OS
(software) and the machine (hardware), the conflict between paradigms can
bite hard. But, many managers in the computer world are unaware of these
conflicts (according to the business schools they cannot exist). So, a
large computer firm can be caught up in expensive conflicts without management
even being aware. A good example of this kind of conflict is the experience
of Apple Computer and the cloners. Please read.