In the economic catechism of the U.S. courts, there are 2
propositions that tower over all the others: (1) Big Is Efficient. (2)
Big Is Innovative. The latter ranks particularly high as a judicial article
of faith: Technological progress--the root source of all good economic
things--comes out of the laboratories of the world's corporate giants. In a
few weeks, the court that has just 'expedited' its review of Bill Gates'
case--the U.S. Court of Appeals, DC Circuit, Washington--will hand down a
decision boldly announcing that it has just struck a mighty blow for the
American 'consumer' by finding Microsoft innocent of all those frivolous
monopoly charges-- and thus leaving it free to go on churning out more and
better 'technological innovations' for the enrichment of all mankind.
Does technological progress come mostly from giant firms? It does
not. Small startup firms--even home garages--are a far more important
source of major inventions and innovations. Is the computer industry an
exception? Is its largest software firm, Microsoft, the incubator of its
scientific marvels?
These questions are addressed in the column (below) of Robert X.
Cringely, which was kindly forwarded to me by Tom Lowe. "Innovations,"
Cringely writes, "don't often come from big companies and, when they do, it
is generally the result of [small-firm] competition. Innovations usually
come from little companies that need to innovate to make a place for
themselves in the market." Quite so. But the U.S. judiciary, being
innocent of the country's real-world experience with monopolies over the
past 100 years and their routine SUPPRESSION of inventions (to protect their
investments in outdated technology), go on declaring the opposite.
So the appeals court in Washington is not just going to acquit Bill
Gates--it will probably SANCTIFY him. Hail the creator. Praise the
century's Prime Economic Benefactor.
Charles Mueller, Editor
ANTITRUST LAW & ECONOMICS REVIEW
http://webpages.metrolink.net/~cmueller
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Take a Billionaire to Lunch: The Real Reasons Why
Microsoft Is So Desperate to
Fold Internet Explorer Into Windows 98
by Robert X. Cringely
"The check is in the mail."
"Of course I'll still respect you in the morning."
We all know the standard list of lies, but here are two
more, straight from the mouth of Bill Gates this week: 1)
"The Department of Justice is trying to deny product
innovations to computer users," and 2) "If the Department
of Justice is successful in keeping Internet Explorer 4 from
being bundled in Windows 98, Microsoft could be put out
of business."
Make a list of the product innovations that have ever come
from Microsoft. There is a fantasy in Redmond that
Microsoft products are innovative, but this is based entirely
on a peculiar confusion of the words "innovative" and
"successful." Microsoft products are successful -- they
make a lot of money -- but that doesn't make them
innovative, or even particularly good. I do documentary
television shows about the history of the computer business,
and it is amazing how Microsoft executives retrospectively
will acknowledge how bad some of their products have
been. At the time those products were introduced, the same
executives claimed they were the best in the world. How
can this be? It's this confusion of market success and
product quality, combined with a general lack of respect
and concern for users.
Innovations don't often come from big companies, and
when they do, it is generally as a result of competition.
Innovations usually come from little companies that need to
innovate to make a place for themselves in the market.
What comes from big companies, especially big software
companies, are product revisions. We don't ask for the
revisions, but they are nevertheless thrust upon us. Who
actually uses any features of Microsoft Word introduced
after, say, version 4? Yet new versions continue to appear
and we upgrade to them -- not because we want ever
larger, more bloated software -- but because we have no
choice. Deliberate changes in file specifications keep
upgrading just so we're able to read our own writing and
share files with others. It's a plot, a grand manipulation of
millions of users with the sole purpose of maintaining
corporate earnings growth. They do it for them, not for us.
And it's not just Microsoft. Nearly every software company
does the same thing because it's the best way to generate
revenues after the easiest sales have already been made.
There's a sucker born every minute, and more often than
not, he uses a personal computer.
Then there is Lie Number Two: Could the Department of
Justice, with its proposed $1 million-per-day fine and
not-all-that-sophisticated understanding of the way the
software business works, really put Microsoft out of
business? Of course not, and Bill Gates knows it.
But emperors are different from you and me. They can be
self-centered and whine about the most petty things, and for
some reason we listen to them. Emperor Bill can share his
ludicrous fear that the Department of Justice will take out
Microsoft with anything short of a neutron bomb, and we
listen to him. Some people even sympathize. Poor Bill.
Poor Microsoft. But understand that sympathy is unknown
inside the Redmond hallways, that no competitor there is
ever given the benefit of the doubt. Strength is all that
matters at Microsoft -- that is unless a little public
sniveling
can regain some advantage. This is theater, theater of the
absurd.
None of this would make a bit of difference if the software
at the heart of this dispute -- Windows 98 -- was truly
innovative, truly useful or even truly functional. As it
stands at this moment, days or weeks away from Win98
being frozen and deemed shippable to you and me, the
software sucks. Worse still, it treats us like fools.
Here's what I am hearing about Windows 98 from inside
Microsoft's developer and beta test communities.
It isn't done, for one thing. Not even close. Expect many
bugs and many bug fixes long after the product ships, and
probably expect a delay or two beyond Microsoft's
promised second quarter shipping target.
Then there are those innovative features of which the
Department of Justice seems to want to deprive us. Take
Win98's Active Desktop, which is worse than a nuisance.
Click on an icon and the next thing you know, your modem
is dialing someone. That's great if you have a dedicated T1
line, but a real pain if you have a 28K modem. Then there's
the new "subscriber" service: Forget to turn your computer
off at night, and at 4am, it will dial up Redmond and using
their new Remote Administration service, scan your DLLs
and replace them at Microsoft's discretion. Good luck
trying to keep Netscape Navigator running under that
scenario. Plus, how do we know what information is being
passed back and forth? And with all the Java code being
bounced around, you had better have at least a 56K modem.
It's obvious Microsoft's programmers have T1 Internet
connections to their Fast Ethernet networks. Doesn't
everyone?
Install Win98, and the first thing you see after rebooting is
the Channels Bar, with Warner Bros. and Disney logos
filling half the screen. How much dough did Microsoft get
for that sort of advertising? It's as if every time I started
my car, the radio played a Shell Oil commercial first.
Using Internet Explorer 4, clicking the search button routes
everything through the Microsoft server first. Talk about
demographic manna from heaven! Microsoft will know
everything we do, and everywhere we go on the Internet.
And then there's WinTrust: Microsoft is laying the
groundwork so that all electronic transactions will go
through Redmond. This may be the real reason Microsoft is
pushing IE4 onto the OEMs so hard.
Cybercash, online transactions, Internet advertising. The
browser is simply the front door to these innovative
services/profit centers. The only way to make sure
everyone will see those centers is to make sure everyone
uses Microsoft's browser. Netscape has no interest in
enabling WinTrust, so Netscape must die. Microsoft will
gladly give away the browser for free regardless of the
presence of Netscape just to be sure they can control the
online gateway. From a business standpoint, this is sheer
brilliance. But to some folks it's Big Brother coming from
Washington state instead of DC.
But will Windows 98 run on our current hardware? Not
really. Remember how Windows 95 needed only a 486 and
eight megs of RAM? Who runs Win95 today with anything
less than a Pentium and 16 megs? Windows 98 currently
requires 340 megabytes of disk space and a new useful
minimum 32 megs of RAM, with 48 megabytes required to
run as well as Windows 95.
Don't say I didn't warn you.
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