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Menu: Home UP EDITORIALS Another Linux Laptop More Scumbags Join the EFF Java woes Linux Laptop Die, threads! Welfare Whores I bought it, it's mine. MS Trial Verdict Linux Desktop Letter to Bob Robb MS Myths 1-3 Windows? No, KDE! Benchmarketing 101 Benchmarks Galore! Mindcraft Reality Check Open Source Economics FUD 101 Commoditization Markets & Microsoft Don't Cry for Bill Links Contact Info My Resume My Public Key EMAIL Eric BadTux Portal[et]	An Open Letter to William Raspberry Dear Mr. Raspberry: Congratulations. You are the latest person to be duped by Microsoft's latest PR campaign. You state that you know nothing about computers. Fine. But those of us in the computer industry know a lot about computers -- and we know a lot (from firsthand experience) about the tactics that Microsoft uses, tactics so brutal that they would make the Mafia blush with shame. The AT&T Breakup Side Show First, a side show. You state that the breakup of Ma Bell was a mistake. Perhaps. All I know is that the Internet would not exist if Ma Bell still existed. Almost all of the fiber-optic lines that carry the "backbone" of the Internet belong to competitors to AT&T, such as MCI, GTE, and LDDS-Worldcom. If they had not been allowed to compete, they would not have been able to invest in those fiber-optic lines for an "unproven" technology like the Internet. In addition, the Unix operating system that powers the backbone of the Internet would not be widely available if AT&T was still a monopoly -- it'd still be hidden in a back room at Bell Labs. You also would not be allowed to attach modems to your phone line if AT&T was still a monopoly. I remember using acoustic couplers at 300 baud because AT&T would not let me attach a modem to the phone line. Today's modems run 100 times faster and people still complain that they're too slow to browse the Internet. And finally, my phone bill today is much lower than it was in 1979. My long distance rates hover at around 10 cents per minute, where the average rate in 1979 was around 75 cents per minute (and that was back when a dollar was worth something). Enough said. The breakup of AT&T allowed high speed modems, allowed the Internet, and allowed telephone rates to drop by over 700%. If you still insist that it was a bad thing, I have pity for you. Back to our story... You talk about Microsoft's overpowering technical and promotional success. But those are not an issue, especially since Microsoft has never been much of a technical success. Throughout the life of Microsoft their competitors have had superior technology. For example, early in the life of Microsoft, Digital Research had CP/M and CPM/86, of which MS-DOS was a blatant copy. Later, Digital Research brought out DR-DOS, which would run MS-DOS programs faster than MS-DOS would run them. A few years after that IBM brought out OS/2 Warp, which would run Windows programs better than Windows would. And now, BeOS and Linux both represent better technology than Windows 98 and Windows NT, yet, like the earlier technologies, are difficult to find. Why is this? Well, as long as Microsoft has a monopoly in at least two different areas, it can use the threat of increasing license fees or revoking licenses to whip computer manufacturers in line. For example, the Caldera Vs. Microsoft lawsuit claims that Microsoft shot down DR-DOS by threatening to withdraw Windows licenses from computer manufacturers who dared to install DR-DOS on their computers. Microsoft is also alleged to have used similar tactics when dealing with computer manufacturers interested in bundling OS/2. Supposedly Microsoft said okay, you can bundle OS/2 with your computers, but you'll have to pay us per-CPU (i.e., if you sell OS/2 you have to send some of the money to us too) or else pay full wholesale price (about $50 higher than competitors) for your Windows. Since at least half of the market still demanded MS-DOS and Windows, this meant that OS/2 was effectively locked out of the market. An earlier Department of Justice lawsuit ended in an out-of-court settlement, a consent decree intended to prevent such things from happening again. The current lawsuit is basically an extension of that earlier lawsuit -- the Department of Justice is basically saying that Microsoft did not live up to their deal. The Myth of Microsoft Performance Mr. Raspberry, you imply that Microsoft is responsible for the decreased price and increased performance of today's computers. That, sir, is a lie. Microsoft's operating systems have consistently increased in price almost every year. The only time there has ever been a price decrease in Microsoft's product line is when there is a valid competitor, at which time Microsoft swiftly drops their prices until the competitor runs out of cash and can no longer compete. Then Microsoft raises their prices again to even higher than they were before. In fact, now that they have driven IBM's OS/2 out of the server business, just this year Microsoft significantly raised license fees for their flagship Windows NT Server product. Microsoft's products are known by everybody in the computer industry to be poorly designed, slow, and overly bloated. The usual term used to describe them is "bloatware". They are "good enough" products, which do their job "good enough" but which do not excel in any manner. Microsoft has taken the art of "good enough" to its logical conclusion: any technology is "good enough" if you have enough cash to drive the competitors out of business. There are a number of companies that are responsible for the increasing power and decreasing price of computers. Intel, for example, under pressure from fierce competitors AMD and Cyrix, has decreased prices and increased the power of their microchips every year. Similarly, fierce competition in the disk drive and RAM markets have resulted in storage capacity doubling in size and halving in price almost every year. None of this has a bit to do with Microsoft. The Bundling Thing One aspect of a monopoly is this: when a competitor comes along, they drop the prices on their product. They may even give it away for free, like Microsoft did with Internet Explorer. They continue giving it away until the competitor runs out of cash and dies. Then they raise their prices back to even higher. The Department of Justice has stated that the entire reason that Microsoft bundled Internet Explorer with their operating system was not to improve their operating system but was, rather, to eliminate Netscape's cash flow. Microsoft executives have been reported to say things like "We're gonna keep giving it away until Netscape runs out of cash." Microsoft viewed Netscape's browser as a threat to their operating system monopoly because Netscape's browser could display the results of programs located on some non-Microsoft operating system many miles away. If people started running word processors written in Java using Netscape's browser, then people would no longer have a reason to buy Microsoft's Office product. Furthermore, since Netscape also runs on other operating systems that Microsoft views as competitors, such as Linux and Apple's Macintosh, people would no longer have a reason to buy Windows. The Department of Justice is alleging that, seeing this threat, Microsoft resorted to illegal tactics: that Microsoft used its monopoly on the Windows 95 operating system in order to force computer manufacturers to stop bundling Netscape with their product. Hints about "If you do this, we'll raise your license fees to the point where you go bankrupt or we'll refuse to sell you Windows 95 at all" are alleged to have been made. The Department of Justice is also alleging that Microsoft actually PAID people to remove Netscape from their product in favor of Internet Explorer. For example, they paid American Online (AOL) to use Internet Explorer by including AOL's icon on every Windows 95 system sold. Why Netscape did not "build on its advantage" Netscape is not, and never has been, a monopoly. Netscape has never had the monopoly power in one area (such as operating systems) to threaten computer manufacturers if they included Internet Explorer on their systems. Furthermore, Netscape has faced valid competition throughout its existence. For example, the Spyglass Mosaic program (of which Internet Explorer is a much-improved version) existed even prior to the formation of Netscape Communications, and would display all of the web pages that Netscape would display. Maybe they would not be as pretty, but they would display. How, pray tell, could Netscape do what Microsoft is alleged to have done (threaten computer manufacturers with loss of their license if they included Netscape, etc.)? Should the government just "butt out"? Actually, I think that the current Department of Justice lawsuit is a matter of too little, too late. Microsoft is already in the process of losing their monopoly because they have fallen prey to the usual symptoms that bring down a monopoly -- an inability to innovate and an inability to bring out an acceptable product on time. In short, I believe that the Department of Justice does not need to do a thing to Microsoft except slap them on the wrist for being bad boys. What are these symptoms? Well, let's start with Windows 98. Windows 98 is basically Windows 95 with a lot of bug fixes, some updated drivers, and the Internet Explorer 4.0 as the default interface. There are no compelling reasons to upgrade from Windows 95 to Windows 98, unlike the Windows 3.11 to Windows 95 transition where Windows 95 was clearly a quantum leap in desktop operating systems compared to its predecessor. Next, let's look at Microsoft's flagship Windows NT program. Their version 3.x of Windows NT was rather bare-bones, but it worked well, was reliable, and was fast. So what did Microsoft do? They moved a huge chunk of code from Windows 95 (which has never been regarded by computer professionals as fast or reliable) into the very core kernel of Windows NT. The result, Windows NT 4.0, is slower than the previous version, and MUCH less reliable. The "blue screen of death" (a total lockup of Windows NT) is a common occurance for computer professionals who use Windows NT for network-heavy tasks such as web servers or network applications. So what about Windows NT 5.0, which was supposed to fix those problems? Well, apparently having to move yet ANOTHER huge chunk of code from Windows 98 into Windows NT 5.0, the Internet Explorer 4.0 user interface, is going to make it even less reliable and slower than Windows NT 4.0. Plus it's late. Very late. Microsoft promised it for the end of this year. Then they promised it for the beginning of next year. Now those "in the know" say that it is unlikely to come out until the end of 1999 at the earliest, and probably won't come out until the spring of 2000. This will allow competitors to eat their lunch in the Windows NT market space -- and it is already starting to happen. Already the Linux operating system has a bigger market share than Microsoft's in the Internet web server market, and its lead will continue to grow with every delay in Microsoft's product. In addition, those who are "in the know" say that initial versions of Windows NT 5.0 will be even less stable than Windows NT 4.0 was... a scary thought, if true. Windows NT 5.0 has such a bad reputation, in fact, that Microsoft in desperation has renamed it "Windows 2000". Perhaps they're hoping that people won't notice that it's the same old "NT 5.0" with a new image and new name? Conclusions Don't cry for Microsoft. They have earned every bit of pain they're currently getting from the Department of Justice. On the other hand: the Department of Justice is irrelevant. In the end, what will do in Microsoft is not the Department of Justice but, rather, simple market forces. Microsoft is already showing signs of losing their ability to innovate, with Windows 98 and Windows NT 5.0 both being disappointing so far. This opens the door for competitors. One especially interesting competitor is called "Linux". Linux is not owned by any one person so Microsoft can't buy them out or drive them out of business. In addition Linux is free. That means that Microsoft can't undercut the price of Linux. With a competitor like "Linux" that cannot be driven out of business by typical Microsoft tactics, and with Microsoft showing signs of losing their ability to innovate, Microsoft's monopoly will inevitably go the same way as Thomas Edison's early monopoly on electric power generation or Henry Ford's early monopoly of mass-produced automobiles. Sincerely, Eric Lee Green

Eric's Home Page

An Open Letter to William Raspberry

Dear Mr. Raspberry:

Congratulations. You are the latest person to be duped by Microsoft's latest PR campaign.

You state that you know nothing about computers. Fine. But those of us in the computer industry know a lot about computers -- and we know a lot (from firsthand experience) about the tactics that Microsoft uses, tactics so brutal that they would make the Mafia blush with shame.

The AT&T Breakup Side Show

First, a side show. You state that the breakup of Ma Bell was a mistake. Perhaps. All I know is that the Internet would not exist if Ma Bell still existed. Almost all of the fiber-optic lines that carry the "backbone" of the Internet belong to competitors to AT&T, such as MCI, GTE, and LDDS-Worldcom. If they had not been allowed to compete, they would not have been able to invest in those fiber-optic lines for an "unproven" technology like the Internet.

In addition, the Unix operating system that powers the backbone of the Internet would not be widely available if AT&T was still a monopoly -- it'd still be hidden in a back room at Bell Labs. You also would not be allowed to attach modems to your phone line if AT&T was still a monopoly. I remember using acoustic couplers at 300 baud because AT&T would not let me attach a modem to the phone line. Today's modems run 100 times faster and people still complain that they're too slow to browse the Internet.

And finally, my phone bill today is much lower than it was in 1979. My long distance rates hover at around 10 cents per minute, where the average rate in 1979 was around 75 cents per minute (and that was back when a dollar was worth something).

Enough said. The breakup of AT&T allowed high speed modems, allowed the Internet, and allowed telephone rates to drop by over 700%. If you still insist that it was a bad thing, I have pity for you.

Back to our story...

You talk about Microsoft's overpowering technical and promotional success. But those are not an issue, especially since Microsoft has never been much of a technical success. Throughout the life of Microsoft their competitors have had superior technology. For example, early in the life of Microsoft, Digital Research had CP/M and CPM/86, of which MS-DOS was a blatant copy. Later, Digital Research brought out DR-DOS, which would run MS-DOS programs faster than MS-DOS would run them. A few years after that IBM brought out OS/2 Warp, which would run Windows programs better than Windows would. And now, BeOS and Linux both represent better technology than Windows 98 and Windows NT, yet, like the earlier technologies, are difficult to find.

Why is this? Well, as long as Microsoft has a monopoly in at least two different areas, it can use the threat of increasing license fees or revoking licenses to whip computer manufacturers in line. For example, the Caldera Vs. Microsoft lawsuit claims that Microsoft shot down DR-DOS by threatening to withdraw Windows licenses from computer manufacturers who dared to install DR-DOS on their computers. Microsoft is also alleged to have used similar tactics when dealing with computer manufacturers interested in bundling OS/2. Supposedly Microsoft said okay, you can bundle OS/2 with your computers, but you'll have to pay us per-CPU (i.e., if you sell OS/2 you have to send some of the money to us too) or else pay full wholesale price (about $50 higher than competitors) for your Windows. Since at least half of the market still demanded MS-DOS and Windows, this meant that OS/2 was effectively locked out of the market.

An earlier Department of Justice lawsuit ended in an out-of-court settlement, a consent decree intended to prevent such things from happening again. The current lawsuit is basically an extension of that earlier lawsuit -- the Department of Justice is basically saying that Microsoft did not live up to their deal.

The Myth of Microsoft Performance

Mr. Raspberry, you imply that Microsoft is responsible for the decreased price and increased performance of today's computers. That, sir, is a lie. Microsoft's operating systems have consistently increased in price almost every year. The only time there has ever been a price decrease in Microsoft's product line is when there is a valid competitor, at which time Microsoft swiftly drops their prices until the competitor runs out of cash and can no longer compete. Then Microsoft raises their prices again to even higher than they were before. In fact, now that they have driven IBM's OS/2 out of the server business, just this year Microsoft significantly raised license fees for their flagship Windows NT Server product.

Microsoft's products are known by everybody in the computer industry to be poorly designed, slow, and overly bloated. The usual term used to describe them is "bloatware". They are "good enough" products, which do their job "good enough" but which do not excel in any manner. Microsoft has taken the art of "good enough" to its logical conclusion: any technology is "good enough" if you have enough cash to drive the competitors out of business.

There are a number of companies that are responsible for the increasing power and decreasing price of computers. Intel, for example, under pressure from fierce competitors AMD and Cyrix, has decreased prices and increased the power of their microchips every year. Similarly, fierce competition in the disk drive and RAM markets have resulted in storage capacity doubling in size and halving in price almost every year. None of this has a bit to do with Microsoft.

The Bundling Thing

One aspect of a monopoly is this: when a competitor comes along, they drop the prices on their product. They may even give it away for free, like Microsoft did with Internet Explorer. They continue giving it away until the competitor runs out of cash and dies. Then they raise their prices back to even higher.

The Department of Justice has stated that the entire reason that Microsoft bundled Internet Explorer with their operating system was not to improve their operating system but was, rather, to eliminate Netscape's cash flow. Microsoft executives have been reported to say things like "We're gonna keep giving it away until Netscape runs out of cash." Microsoft viewed Netscape's browser as a threat to their operating system monopoly because Netscape's browser could display the results of programs located on some non-Microsoft operating system many miles away. If people started running word processors written in Java using Netscape's browser, then people would no longer have a reason to buy Microsoft's Office product. Furthermore, since Netscape also runs on other operating systems that Microsoft views as competitors, such as Linux and Apple's Macintosh, people would no longer have a reason to buy Windows.

The Department of Justice is alleging that, seeing this threat, Microsoft resorted to illegal tactics: that Microsoft used its monopoly on the Windows 95 operating system in order to force computer manufacturers to stop bundling Netscape with their product. Hints about "If you do this, we'll raise your license fees to the point where you go bankrupt or we'll refuse to sell you Windows 95 at all" are alleged to have been made. The Department of Justice is also alleging that Microsoft actually PAID people to remove Netscape from their product in favor of Internet Explorer. For example, they paid American Online (AOL) to use Internet Explorer by including AOL's icon on every Windows 95 system sold.

Why Netscape did not "build on its advantage"

Netscape is not, and never has been, a monopoly. Netscape has never had the monopoly power in one area (such as operating systems) to threaten computer manufacturers if they included Internet Explorer on their systems. Furthermore, Netscape has faced valid competition throughout its existence. For example, the Spyglass Mosaic program (of which Internet Explorer is a much-improved version) existed even prior to the formation of Netscape Communications, and would display all of the web pages that Netscape would display. Maybe they would not be as pretty, but they would display.

How, pray tell, could Netscape do what Microsoft is alleged to have done (threaten computer manufacturers with loss of their license if they included Netscape, etc.)?

Should the government just "butt out"?

Actually, I think that the current Department of Justice lawsuit is a matter of too little, too late. Microsoft is already in the process of losing their monopoly because they have fallen prey to the usual symptoms that bring down a monopoly -- an inability to innovate and an inability to bring out an acceptable product on time.

In short, I believe that the Department of Justice does not need to do a thing to Microsoft except slap them on the wrist for being bad boys.

What are these symptoms? Well, let's start with Windows 98. Windows 98 is basically Windows 95 with a lot of bug fixes, some updated drivers, and the Internet Explorer 4.0 as the default interface. There are no compelling reasons to upgrade from Windows 95 to Windows 98, unlike the Windows 3.11 to Windows 95 transition where Windows 95 was clearly a quantum leap in desktop operating systems compared to its predecessor.

Next, let's look at Microsoft's flagship Windows NT program. Their version 3.x of Windows NT was rather bare-bones, but it worked well, was reliable, and was fast. So what did Microsoft do? They moved a huge chunk of code from Windows 95 (which has never been regarded by computer professionals as fast or reliable) into the very core kernel of Windows NT. The result, Windows NT 4.0, is slower than the previous version, and MUCH less reliable. The "blue screen of death" (a total lockup of Windows NT) is a common occurance for computer professionals who use Windows NT for network-heavy tasks such as web servers or network applications.

So what about Windows NT 5.0, which was supposed to fix those problems? Well, apparently having to move yet ANOTHER huge chunk of code from Windows 98 into Windows NT 5.0, the Internet Explorer 4.0 user interface, is going to make it even less reliable and slower than Windows NT 4.0. Plus it's late. Very late. Microsoft promised it for the end of this year. Then they promised it for the beginning of next year. Now those "in the know" say that it is unlikely to come out until the end of 1999 at the earliest, and probably won't come out until the spring of 2000. This will allow competitors to eat their lunch in the Windows NT market space -- and it is already starting to happen. Already the Linux operating system has a bigger market share than Microsoft's in the Internet web server market, and its lead will continue to grow with every delay in Microsoft's product. In addition, those who are "in the know" say that initial versions of Windows NT 5.0 will be even less stable than Windows NT 4.0 was... a scary thought, if true.

Windows NT 5.0 has such a bad reputation, in fact, that Microsoft in desperation has renamed it "Windows 2000". Perhaps they're hoping that people won't notice that it's the same old "NT 5.0" with a new image and new name?

Conclusions

Don't cry for Microsoft. They have earned every bit of pain they're currently getting from the Department of Justice.

On the other hand: the Department of Justice is irrelevant. In the end, what will do in Microsoft is not the Department of Justice but, rather, simple market forces. Microsoft is already showing signs of losing their ability to innovate, with Windows 98 and Windows NT 5.0 both being disappointing so far. This opens the door for competitors. One especially interesting competitor is called "Linux". Linux is not owned by any one person so Microsoft can't buy them out or drive them out of business. In addition Linux is free. That means that Microsoft can't undercut the price of Linux.

With a competitor like "Linux" that cannot be driven out of business by typical Microsoft tactics, and with Microsoft showing signs of losing their ability to innovate, Microsoft's monopoly will inevitably go the same way as Thomas Edison's early monopoly on electric power generation or Henry Ford's early monopoly of mass-produced automobiles.

Sincerely,
Eric Lee Green

Created with PHP 4. Last modified Fri, 06 Dec 2002 10:27:39 -0500.

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