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MS breakup will cost $30 billion? 227

ibbey writes "According to a study released today, breaking up MS will cost consumers $30 Billion dollars due to development, marketing and support costs required for third parties to adapt their software to "new Windows descendants," and by fracturing the market resulting in higher retail costs."
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MS breakup will cost $30 billion?

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  • by Anonymous Coward
    With all due respect -- from the POV of people who mostly _aren't_ heavily relying on MS products for our livelihoods (many of us), our opinion may be a little coloured. What about the vast number of end-users who depend on MS products, largely because that's what they've been using for their entire computing experience? What about the impact on businesses and individuals everywhere? Do you really expect them to be _able_ to leave MS en masse, at the drop of a hat, and migrate onto the "free" OSes? That's easy for _us_, perhaps, but there are a LOT of people who have neither the time nor inclination to completely switch their whole IS philosophy and systems. _That's_ who's going to pay; people stuck in the MS world, and will need to pay for the extra development and _support_.

    NOT EVERYONE IS A LINUX GEEK. Think about the rest of the world, not just yourselves.
  • by Anonymous Coward
    You are absolutely right. And the funny thing is that MS is accusing the Linux community of forking to multiple OS's.

    The same source code tree is used for all Linux hardware platforms, from palmtop to 4 processor DEC Alphas. Can the same be said for Windows? I think not.

    If you have a palmtop you will be running CE, most desktops run Win3.1 or Win95. Multiprocessor workstations need WinNT Workstation and high end servers need WinNT Server and all of these only run on a limited set of hardware platforms.

    You cannot run CE on an IBM Compatible. You cannot run Win95 on a PowerPC. You cannot run WinNT on a StrongArm.

    Basically windows sucks.

    Why should breaking MS up add 2 extra OS'es? We all know that Bill will be the CEO of one and sit on the board of the other companies. Breaking the law is something that MS does very well. The three companies will probably work exactly the same as they do now to stick it to the competetion.

    Natural Monopoly? I think not!
  • by Anonymous Coward
    A fracture market may indeed induce competition, but it doesn't appear to induce new technology.

    Take the Unix marketplace for instance. dozens of vendors all fighting over who's implementation of what will be the standard for decades. Even today the mostly unified market is still too busy fighting within itself to advance the core OS technologies very fast.

    I happen to believe that the OS market would be a lot more advanced today if the Unix community had not been so bent on reinventing the wheel over and over again.

    Microsoft is sort of the opposite, but also equally bad. Microsoft doesn't change unless they have to. For the last 10 years or so they've had good incentive to change. They want everyone using Windows NT instead of of crappy 16 bit products. In Microsofts eyes, if everyone were on NT their support nightmares would be greatly reduced. This gives them a huge incentive to try and push people to NT.

    Unfortunately, the market didn't agree. So Microsoft was forced to create Win95 and then Win98 in an effort to make the transition to NT more bearable. This effort has also set MS's OS back since they've been spending so much time and effort on compatibility.

    Either way, I don't think further fragmentation is going to help anyone.
  • by Anonymous Coward
    I'm not quite sure of all the rememdies to MS. But I think that (in addition to whatever happens) they should be fined extremely hard. I don't care if technology moves so fast that the Caldera case or the DOJ case are 'out of date.' What both of them are about is having illegal business acts. The punishment must fit the crime. Otherwise, people will accept that the risk that they get caught because in the long run they have the gains. I would like to see MS fined so harshly that all they have left in cash (without debt) is $20 billion in the bank. Then they won't be able to buy themselves out of everything that they do. That would be less cash on hand than Apple has.

    ~$2 billion profit on ~$4 billion sales is insane.

    I'm not a huge fan of Oracle's CEO, but I tend to agree with him on what to do with MS. Split the company up in 2--one run by Balmer, the other by Gates. They both get a copy of all the current IP. Then let them go at each other. Only the truely open standards would win. But then we'd all have to worry that they would be colluding with each other.

    As for Liebowitz, I don't like him. I think that I read on Techweb or someplace that he's one of the university profs that get money from MS by having all his students required to use MS products. So of coarse he's going to make it sound like a travesty to MS.

    -Matthew Smith
  • by Anonymous Coward
    If breaking up microsoft's monopoly would cost so much, wouldn't that indicate that the Windows OS should be the property of everyone?
  • by Anonymous Coward
    The whole study sounds like a giant strawman argument. The point of dividing Microsoft would be to establish public interface standards, not to bastardize Windows. Therefore it has been suggested to break them up along functional divisions: operating system, applications and services.
    It's amazing how people like Liebowitz are willing to sacrifice all their credibility and integrity just to protect Microsoft.
  • by Anonymous Coward
    Only in the past 12 to 18 months has Microsoft started to market the idea of a single Windows base for all its users.

    Not true at all. If you go back and read some of the trade rags from 1992 you'll find the message from Microsoft quite clear. NT will be replacing windows when it comes out. It had even been stated publicly that Windows 3.1 was the last of the line for 16 bit windows, which was why MS had to save face and call Chicago completely 32 bit. This message didn't start to change until early 1993 when it became clear from market tests that the general population wouldn't accept NT's lack of compatibility and huge system requirements. It's no coincidence that work on Chicago began about the time of NT's release.

    I worked for one of the major OEM's at that time. We were told the exact same message. Prepare for NT to take over.

    It didn't happen.

  • by Anonymous Coward
    No, the money won't vanish. It'll be wasted on inefficiency. Having a single dominant standard makes program development and testing easier and more efficient. Having to support a large number of divergant standards will make software development harder, especially for the smaller companies. This is bad for nerds trying to start up their own software companies. Development costs will go up. Thus, cost of products will go up. Consumers will buy fewer due to higher prices. The whole economy will pay.

    Nothing about the current system is broke. Don't "fix" it. Nerds are in high demand developing software. As long as Linux doesn't destroy the whole industry by getting everyone to think that software should be free and putting programmers out of business, life will continue to be good.
  • by Anonymous Coward
    Yes, the fragmentation of Unix has increased Unix's chances of survival, because having more things called "Unix" makes it more likely that one will survive to keep the name going.

    But throwing all personal familiarity biases aside, has Unix's survival been a good thing? Is this OS really the greatest be-all of Operating Systems? I remain unconvinced. Unix was picked up by a lot of different vendors primarily because it was cheap. AT&T wasn't allowed to be in the computer business (Government interference) and thus they gave it out for cheap. If AT&T had been a normal computer vendor, with Unix their proprietary OS, would Unix have survived?

    This is an interesting question, because this thread is about whether another Government intervention (MS breakup) would be a good thing in the current environment -- an environment where MS is trying to extend it's consumer reach into big businesses where Unix is currently predominant due to an earlier Government intervention.
  • I can't outright begin this by saying that Microsoft's splitting up would without any doubt be beneficial to consumers. It is possible, though unlikely, that it would hurt consumers.

    A quick breakdown of basic economic theory is in order -- Consumer "benefits" (crudely measured) can be considered in the following way. Let us say your are person A. You want to buy Microsoft 98. Surely you would be willing to pay more for your first copy of windows than your 10th -- but you always pay the same price (Microsoft has no way of knowing whether you own 1 or 10 or 100 copies of windows, though it would love to know). So you pay X dollars ($209 I think) for Windows 98. X, (in theory), should be equal to the infra-marginal cost of producing Windows 98 given the total amount consumers buy. So since your were willing to pay X dollars for unit 1, but you only paid $209 (only..) you "saved" X-$209 on that unit. So "consumers" get some kind of "good price" on that particular unit.

    However here comes in the sneaky bit. Microsoft wants to be able to charge you more than $209 for your first copy of Windows 98 and a little less for your second copy and so on. However it has no way of knowing how many copies you have right? So it has no way of doing this.

    But let us look at another possibility. Let us say that person A really really needs microsoft windows98 cause oh my its just so feature laden. Person B needs it for games. Certainly Person A values microsoft 98 more than B (were assuming Person B is not really nutty and can't live without games). Certainly, Microsoft could charge A more than B. (Ok, if you loose me here, sorry, I really need graphs for this but here goes).

    If it charges a price that would allow A to buy, then B wouldn't buy any (Its not worht it), if it charges B's price, then both will buy, but it could do better if it could charge A a certain price and B another price... But it can't do this (at least not easily, how do you know what A is willing to pay, and what B is willing to pay? And how do you know there isnt a person C ? etc)

    This is where vertical integration comes into play -- integration of two seemingly seperate markets.. Look at netscape and IE. Most people, a year ago, would have said -- hey IE is seperate from Windows98. Netscape is seperate. They are seperate goods. Now what if market research showed that Person A is someone who uses the machine for work? (Certainly someone who uses windows98 for work has more use than someone who plays at home ? ). Now lets say that Microsoft also notices a BIG increase in use of the internet, in particular intranets get to be pretty popular.

    So microsoft notices, damn - ....
    hmm this is gonna get too long..
    I might write up a paper on this and publish it.
    If your interested in it
    email me at : vcdman(at)
    .. if i get enuf emails, I'll write up something refuting that article.
  • by Anonymous Coward on Saturday May 01, 1999 @01:12PM (#1907679)
    When the microcomputer industry developed in the late 70s, there were many competing OSs and applications. It quickly became clear that compatibility was important, even fundamental, to users. The industry realized that owning and controlling the standards that provided compatibility was an effective way to succeed.

    Microso~1 did it best--other companies tried to make Excel and Word compatible formats, but Microso~1 integrated and morphed the "standards" quickly enough to keep them forever behind.

    The Internet is killing Microso~1. MS can't control the standards, allowing other OSs, such as Linux, applications (Netscape), and languages (Java), to come back onto the playing field.

    In the case, the DOJ and MS's defense-by-self-immolation has shown MS's strong-arm tactics and bullying. The only remedies that matter will be those that prevent MS from owning the web:

    1) No folding Explorer into the OS.

    As long as you can run other browsers on the Win OS, Microso~1 is dead. As the web becomes more central to applications and information, the OS matters less and less. (True of Linux, too!)

    And frankly, I doubt that remedy even matters. The Internet is too large and made of too many open standards for MS to have a chance to own it all. _Everything_ will gradually go open source as everyone realizes that the way to maintain compatibility is open-source, not sole-source.

    The DOJ case is just the end of an expensive lesson we spent the last 20 years learning.
  • by Anonymous Coward on Saturday May 01, 1999 @02:14PM (#1907680)
    IF it is true that the costs associated with a breakup would be USD 30 billion, the "cost" to consumers would still be a fraction of that.

    Those USD 30 billion would presumably be used for something.

    It would mean more jobs, which translates into more money in taxes to the government, and less money spent on welfare, for instance. Of course, unless the baby Microsofts would magically manage to waste 30 billion without causing any new jobs to be created.

    They also seem to fail to consider that Microsoft has one of the highest margins in the business.

    I find it highly improbable that splitting up Microsoft would increase cost by so much that they'd have to raise prices... Remember, we're talking about a company that manage to get margins close to 50%, while most other hardware and software companies lie in the 10% - 15% range...

    Sure, profits might go down in the short run, but with the treat from OS's like Linux, the baby Microsofts wouldn't be able to afford rising prices.

    And if the profits would go down, it would be as a direct result of those companies spending more money on R&D and marketing that again create jobs and thus is another benefit of the breakup to the consumer.

    As for creating added cost for other companies... Did they consider that if Microsoft is split up, the baby Microsofts might have to consider standarizing the Win32 API? If they don't, yes, it would cost other companies more to support.

    But if they don't, then they have proven that the very corporate culture of Microsoft is too perverted to be allowed to live on - if they want to fracture the market while everyone else is working on standarization, they deserve to die.

  • Actually, I've heard a mixture of both ideas. In general it seems that splitting up the company into 3 companies with the same IP is more likely than the 3 division method. The problem with the 3 division method is that it really would not stop the new companies from collaborating with each other in order to optimize their products to work together. The other method would at least impose some element of competition.
    I think a bigger issue is that regardless of how they might decide to break MS up structurely, how will they actually go about implementing it? Its not like MS actually has several divisional/regional offices that you can separate. Nearly all of the heavy work is handlded in Redmond (I've seen the campus, its huge). How exactly to you divide something like that up so that it makes sense? With AT&T, they could at least divide the company up into the regionals.
  • by davie ( 191 ) on Saturday May 01, 1999 @01:44PM (#1907683) Journal

    There have been a lot of comments from the Linux community regarding business models, that Microsoft can't compete with Linux because we're on different playing fields, etc. It's obvious by now that Microsoft aren't interested in competition, i.e. winning by providing a better value than their competitors. Instead, they seem to react to any threat to their market dominance by striking a Faustian bargain with the competitor then calling in their chips, draining the competitor's resources in a Vaporware arms race (the Borland vs. Microsoft OOP war?) or failing those, making their software incompatible with the competitor's products, and/or spreading mis-information about the threat.

    Since it would be virtually impossible for Microsoft to "own" Linux, we can only assume they've already defaulted to FUD. The FUD strategy makes the "playing field" issue almost insignificant--Microsoft's marketing department could probably kill Brand X dishwashing liquid if Mr. Gates thought he would benefit. I haven't wanted to consider the tactics Microsoft might resort to in an attempt to supress Linux, but I think we've gotten a look at a few pages from their playbook already:

    • The Mindcraft benchmarks.
    • The second set of Mindcraft benchmarks, which will probably claim similarly dismal numbers for Linux, but will probably add insult to injury by claiming they had hands-on assistance from Linus and Alan, when in fact, they were only able to provide general advice and won't be allowed on site for the tests.
    • The $30,000,000,000.00 Lie.
    • Muth's "we're already 'open source'" comments, in my view, a cynical attempt to dilute the significance of "Open Source," a registered certification mark.
    • Claims that Linux has no GUI.
    • Bill's "no centralized control over source code" fairy tale.

    While Microsoft's representatives continue to claim that Linux is only a toy and that they're not worried about it, they've already started the FUD machine rolling. I wish Red Hat and some of the other "heavyweights" would pick up the ball and fight back with some real benchmarks. Why not duplicate the Mindcrafty benchmarks at IBM's labs, with hands-on assistance from a couple recognized NT performance-tuning experts, Linus and Alan on-site?

  • by Skyshadow ( 508 ) on Saturday May 01, 1999 @01:18PM (#1907684) Homepage
    Well, it's not as if all that $30 billion is going directly to the incinirator that's used to heat la casa de Gates, either. Likely, that money, like the cash being spent for Y2K, will be getting shoveled back into the pockets of the programmers and managers who oversee the tweaks, and then invested back into the economy as taxes and spending.

    Stuff like this, which seems to suggest that the money will vanish from the face of the earth instead of actually creating new jobs, pisses me off something royal.

    Besides, $30,000,000,000 seems like a pretty fair price to pay to get some competition back into the world of computer software, instead of just having one company take over any sector they'd like on a whim. Result: we get better technology and more jobs. Hell, it's a sort of income redistribution for nerds: Getting it out of the hands of the pointy-hairs and the corporations and forking it over to us.

    We shoulda done this years ago.


  • That's only a little over $5 per person! I'd certainly pay my fair share to see more competition and a bigger piece of the pie for so-called "alternative operating systems."


  • The small shop I work at (as a Mac tech, moving in the direction of being able to handle Linux professionally) is a VAR, and we sell PCs.
    We are currently trying to fill a gap by making PCs (with little but the PC, keyboard and mouse and RAM and HD inside) available for under three hundred dollars. Supply your own monitor and whatever else you want. It looks like we should be able to do this fairly effectively....
    The Microsoft tax (reckoned as cost TO US) is MORE THAN HALF the cost of the PC, and that's for a minimal legal version of Win95 only...
    We are going to look into Linux for these insanely cheap ol' PC boxes (486es they are, it's all about lowest possible cost and _our_ ability to set them up in useful condition for uneducated buyers who only want to type letters etc). Using Linux would _halve_ our cost, and we figure we can knock a _hundred_ dollars off the cost of the PC making it under _two_ hundred dollars- and sell them with the understanding that we can't turn people into linux users by waving a magic wand. We can and will, however, figure out a way to install linux onto such minimal boxes, with whatever we can come up with for functionality. Probably be console only (we got 8M of ram to work with, that's it! And a couple hundred megs of HD).
    I have no idea if this is going to work, or if any price-sensitive customers will go for Linux. I just know that the MS tax is OVER HALF of our cost for a physical box- and this is ludicrous, and whether or not people have the cojones to buy them we WILL be offering linux because we're trying to get computing into the hands of people who can't afford it, and it's just ludicrous that MORE THAN HALF our cost is MS tax. Does that seem reasonable? It's the end result of what's been happening. Who knew? And this is for an older version of Win95 that is much deprecated- in other words, it's a very inadequate offering considering it's more than doubling the cost of the PC.
    With that in mind, seeing as we're going to be selling some with Windows anyway, I see _no_ reason we (the shop) shouldn't get to pick among different Windows vendors for this very obsolete product. _Why_ shouldn't we get to pay $30 or so like Compaq, considering that we only want an older version anyway? Hell, man, you can download MacOS 7.5 for _nothing_, and buy system 8.1 for thirty bucks _legally_, and of course you can make your own Linux distribution all you want. It's only _Windows_ that can still demand a monopolistic price from little guys like us- and from Compaq, any time they start acting like they're running the show- and that sort of thing is what got us in this mess that we're still utterly in, every time we pay MS more than the cost of the hardware just to get a PC with Windows to customers.
    Well *ahem* screw that! It would be a sick joke if it wasn't real. The instant I figured out what we the shop were doing and what that _meant_, what we were paying as a grassroots VAR, I went 'LINUX!'. We will advertise it prominently and will discount _more_ than the Windows tax is even costing us (in efforts to be able to claim a startlingly low starting price ;) ) and we will try to get a 'luserfriendly' Linux install happening, even if the memory and disk constraints force us to have console only.
    It's just outrageous. And MS can't punish us much more than they already are- we're getting no breaks whatsover on VAR pricing. We're almost buying _retail_ for crying out loud. It bites.
  • by Thornton ( 600 ) on Saturday May 01, 1999 @07:31PM (#1907687)
    These guys are blowing smoke up your Congressional representative's you-know-what.

    All of the remedies that the DoJ are investigating that involve breaking up Microsoft involve keeping operating systems intact. The argument is that while a monopoly in the OS market may be a beneficial standard, Microsoft is using that monopoly to stifle competition in other areas; namely in Internet applications, office productivity, etc. In other words, these folks are throwing us a red herring.

    In any case, even if the DoJ was examining the possibility of breaking up Microsoft along lines that would split the OS market, there is a good argument that this would benefit customers. Not too long ago, people were raising fears that breaking up Ma Bell's monopoly would end up costing consumers trillions more in long distance services. Instead, long distance carriers are now fighting to offer long distance at 5 to 10 cents a minute, which (when adjusted for inflation) is much lower than what we were paying in the 70s.
  • I wonder if they take into consideration the cost of Windows support incured by businesses. Crashes, dll conflicts, viruses, incompatabilies, required hardware upgrades, etc etc. That alone costs many many millions of dollars in support and consulting hours.

    Most likely this is just another report Microsoft has paid someone to produce. It doesn't mean squat.
  • Posted by My_Favorite_Anonymous_Coward:

    Agreed, more and more apps are moving straight to web interfaces. Is it that hard to imagine a word processor that runs in a brower? (yea, formatting would be a bitch, but.....) So all we really need is a nice, stable, cheap, OS to run under it all. Wonder where we could find one?

    I agree too. Now everyone in the anti-m$ camp is betting on Netscape. Somebody ought to use the gecko engine to write a new word proceesor. It can be done, especailly with the precise control of css1 css2. Where can we find a more popular format than dot/doc/xls? What else html4.0. Yes there are problems, but it can be solved. And it's good enough for everybody who doesn't want to waste time on word processor.
  • Posted by sirtwist:

    This is my first post, so it'll be short and sweet... Let's assume that MS does get broken up into three pieces. Who's to say that they'd all go right back into the OS business? Wouldn't it be smart to take something like the Office suite and run? There's still a lot of money in that.
  • Posted by AnnoyingMouseCoward:

    Ok, I'll admit that this might seem like splitting hairs, but there is a fundemental difference here.

    I the case of Unix, the split within the product base has resulted in fierce competition. The various innovations that have been tried have been ruthlessly tested by the market place. This type of "darwinian selection" rapidly culls bozo features from the OS/application base.

    In the case of M$ ( or any propriatory system ), their "innovation" is a matter of marketing hype. The nifty ( but essentially useless chrome ) that is served up to the user base is ( via M$'s monopolistic marketing practices ) essentially kept in a protective "hot-house". The result of this has been a steady accumulation of mis-features that have to be supported for the sak of backward compatibility.

    So while the two processes may appear to be superficially similiar, they are radically different. Unix functions in the "tooth and claw" realm of the software jungle, while M$ functions in the evolutionary detente of an isolated ecosystem.

    Ok, I know I'm really sreatching the analogy, but that's the way that I see it. Like the Dodo, M$ has evolved to survive in an eco-niche where there are no signifigant predators. It's given up flight and settled down, content that no one can force it out.

    To me, this is the fundemental difference. Unix's ( like Linux ) evolve dynamically to meet changing conditions. Propriatory systems are driven by the "vision" of a small group of individuals. That works, but only as long as that "vision" remains congruent with reality.

    Where it fails is when this small group of "visionaries" start to believe their own propaganda and start telling the consumer base what they are going to get, rather than asking them what they want.

    Just my $0.02 worth.
  • Oh, come on. There was a *book* about this subject: Undocumented Windows," by Andrew Schulman (sorry, I don't have the ISBN). It's a settled issue: Microsoft, at least in the past, has used undocumented APIs.

    Get your fresh, hot kernels right here []!
  • You can look at any Windows binary and see what API calls it makes. If MS apps made any undocumented calls it'd be public knowledge.

    No you can't. Windows uses something called ordinals as a method of calling functions in a dll. The name doesn't show up in the binary.

    Also, browse through the WINE changelog, and look for comments like "implementation of undocumented function kernel.dll:35". Even their file browser (explorer) didn't work under wine for a long time (it still might not) as it was dying on undocumented calls in kernel.

    I think Borland's compiler makes use of a few of these functions, too, but otherwise, only Microsoft products have these problems under wine.
  • I tend to agree with you that breaking up Microsoft and open sourcing the Windows code is not the solution, albeit not for all the same reasons. We even mostly agree on a possible solution as you have outlined. I do have some concerns about your proposed solution though.

    Requiring MS APIs to be open and documented is great, but does not IMO go far enough. Even if they have to fully document new APIs when they are released, they still have the advantage of releasing them at their own discretion. They can easily wait until they have compatible applications before releasing the new APIs. This would give them the substantial advantage of being first to market with their new apps. The other software companies could be months behind in development because of this. There needs to be a way to give everyone access to all APIs as they are being developed or modified. Microsoft would have to keep the information about them very current.

    You were correct that the consent decree prohibited "per-processor licensing." Unfortunately Microsoft sidestepped the letter of that law by implementing "per-machine licensing." It's really a rather blatant violation of the consent decree, but they got away with it. Another reason they should be punished I would say.

    Something would have to be done about them integrating anything and everything into Windows to kill off competition. IMO, this is the toughest issue. I can see both sides of it and how it could be abused by both sides. In the end, it comes down to who you trust to make the right decision. As I just pointed out though, due to their lack of integrity in abiding by the consent decree, I wouldn't trust them at all with making the right decision. I've also considered that if enough other measures are taken, preventing integration might not be necessary.

    The last thing I'm concerned about is the whole Halloween problem. Microsoft plans to "de-commoditize" the OS by using the old embrace-and-extend method of corrupting open protocols and formats into proprietary shadows of what they were. This cannot be allowed to happen. I think this is one of the most damning things they've written because it allows us to see that they don't plan to win their battles by making the best products at the best price. They plan to leverage their marketshare in order to force consumers into using their proprietary formats and protocols. This would effectively shut out competition almost entirely. Combine it with legislation prohibiting reverse-engineering and you have a total lock-out. Something should be included in any solution to block this sort of tactic by Microsoft.

    I like the idea of a large fine. It is well deserved. I also like the idea of using it to fund the development of competing products. It may help restore some real competition someday. Perhaps setting up some sort of trust. The money could be invested and managed so that it will be around for a while. Then the only question is who could be trusted to manage such a thing.

    That's about all I have to say. Now I can sit back and watch it get picked apart :)

  • Right. Windows NT on AXP does run in a 32-bit mode. And yes, 64-bit Windows will be a separate creature entirely. So far, the only platform M$ seems to have any interest in targeting with Win64 is the IA64 (Merced, McKinley, et al) line. (which, of course, isn't available yet, and the time to availability is still indeterminate.) They are still very stuck on IA32 (ix86), and the switch to Win64 will be painful, if the switch from 16-bit to 32-bit is any indication. (Or maybe twice as bad - we ARE adding twice as many bits this time! ;)
  • Umm, the breakup wouldn't duplicate the company into 3 exact copies. (Besides, there's not enough room in this world for one Microsoft, let alone 3!) They'd be dividing on product lines somehow - like OSes/applications/Internet technology or some other set of logical dividing lines. And I think this would help consumers, not harm them - it'd give them some choice. It'd make it pretty much necessary for Windows' APIs to be open, unlike they are now (sort of open, but more open if you have lots of moolah to give to M$). As someone else noted earlier, monopoly in itself is NOT illegal - it's misuse of monopoly power (esp. like to gain monopolies in other areas) that's illegal.
  • Well, I think it'd be more difficult for the separate entities to do what they do now (use undocumented APIs to make only Microsoft's software work best on the platform). At least then, everyone would be on equal footing, instead of what we've got now. Right now, it's too easy for Microsoft to be sneaky, so that they can "beat" (beat? not much of a contest when you own the platform) the competition.
  • Microsoft bought QDOS ("Quick-and-Dirty OS", from what I've heard) from Seattle Software, who wrote a clone of the CP/M OS (which itself was a bare-bones clone of UNIX). It wasn't so much stolen from DRI as it was from Seattle Software (the owner of which sometime later took Microsoft to court). And yes, IBM DOS and MS-DOS were virtually the same (a few different filenames and utilities, but otherwise indistinguishable). And yes, for the crappy OS that Windows 98 is, I think $100 is too much (mind you, that's the UPGRADE cost - an original install copy - about impossible to find on store shelves - is in the US$200-US$250 range).
  • We know for sure Microsoft's apps have calls to undocumented entry points into code (I mean, look at Microsoft apps running under Wine... the Wine developers have had to figure out all the undocumented API calls from what they seem to do - not an easy task). Whether they like to admit it or not, it's pretty much a verifiable fact that they do.
  • Of course it's going to cost a little more in the short term, but in the long term increased competition will surely drive costs down. This is why Microsoft has been able to maintain its monopoly - because people give far more weight to short term costs than they should when long term costs are also critical. Long term costs will decrease if there are viable competitors to Windows because some of those competitors are bound to be more stable and elegant to code for thus actually saving programming time and development costs.

    Then again, this did come from the always unbiased ZDNet so it must be true and I'm probably thinking ahead too much.
  • The analysis assUmes a breakup where 3 corperations sell competing versions of windows. Most of the ideas I've heard on a split would have an OS company, a business software company, and a home software company. That scenerio makes the whole study moot.

    One thing that wasn't pointed out in the study, but would be equally valid, how much does MS cost the consumer today by failing to unify NT and WindowsXX as they have promised to do?

    As others have said, AT&T gave us the same FUD. Somehow, LD rates are at an all time low, and the local phone bill has kept pace with normal inflation.

  • I'd like to see the rest of your notes.. thanks in advance.

    My assumption has been that forcing MS to license the windows source or breaking them up would be awful for consumers, not because of costs (it would surely cost more to keep MS as they are now, I doubt it would cost $30bil to break them up though) but because the baby bills or licensers would have no insentive to break compatiblity with windows and windows wouldn't improve as rapidly as it has in the past.

    The extreme version of the other side of that argument is that each licenser or babybill would diverge from the rest and cause market confusion. The only way I would see that happening is if one of them had somehow gained a majority of the market or something and could then start dictating what the other bills and licensers had to do. All things being equal, there is no clear reason to do anything to break compatibility with the other versions of windows. The way the splintering would happen would be in the add-on APIs and middleware market and there is already heated competition there, but MS has a huge leg up on their competitors.

  • Why limit the use of settlement money to
    operating systems on X86? Why not attack both
    monopolies at the same time?
    Phil Fraering "Humans. Go Fig." - Rita
  • by Frater 219 ( 1455 ) on Saturday May 01, 1999 @05:08PM (#1907706) Journal
    Actually, the Cato Institute is not a right-wing group, but rather a libertarian group. Not to repeat what everyone's probably already heard a few times by now, but libertarianism combines economic conservatism with social liberalism: supporting limited government which keeps its hands off both the economy and people's private lives.

    This should be distinguished from the right-wing (across-the-board conservative or Republican) viewpoint, which supports government meddling in "morals" issues. Republicans support prayer in schools, the War on (Some) Drugs, and immigration restrictions (just for instance), all of which Libertarians oppose.

    In fact, the Republican Party supports far more government meddling in the economy than Libertarians do. Republicans support increased government spending on the military-industrial complex, as well as on corporate welfare. Libertarians oppose both: the government should, we claim, neither help (as the Republicans would have) nor oppose (as Democrats and Socialists would have) corporations, except in cases where corporations violate individual rights. (For instance, Libertarians oppose the use of violence to support corporate interests (e.g. union-busting, colonialist wars (the Gulf War, e.g.), and so forth.)
  • Well that'd make NO sense.. Why would they break into 3 different 'versions' of Windows? I was thinking that they meant breaking Microsoft into 3 parts.

    1) Operating Systems

    2) Applications

    3) Services

    Am I wrong here?
  • I mean, the Mafia's "successful" too.


    There were a lot of hoodlums out there, but Al Capone was targeted because he was so successful. Poor Al, he was competing in a nearly pure capitalist environment and the big bad governement comes in and seizes his assets and destroys his livelihood. If we had just left him alone, the price of gin would probably be much cheaper now.

  • by wayne ( 1579 ) <> on Saturday May 01, 1999 @10:46PM (#1907709) Homepage Journal
    What has a fragmented and competitive unix market done for Unix?

    The "fragmentation" of Unix has allowed Unix to survive when almost all other operation systems that were around in the late 70's have died.

    Think about it. How many OSes can trace their roots to something based in the 70's/early 80's and are still at all healthy today? Well, MS-DOS->Windows, Unix, OS/MFT->OS/MVS->?, System-3->System-36/38->AS/400, VM/CMS and that is about it.

    You might try arguing VMS, but it is basically dead and you really can't claim that it continues on in WinNT because while there is a developer chain, there is no code from VMS in WinNT. You could also argue that MPE has survived, but I don't think you would call it healthy.

    In the early days, Unix wasn't supported by any major vendor, and most vendors actively fought it. DEC labeled Unix as "snake oil", IBM didn't start supporting Unix until very late with the IBM RT, HP dabbled in it, but they really preferred that you used one of their other operating systems. Apollo laughed at Unix and said it was a passing phase, workstations needed an OS that wasn't designed for teletypes.

    Today, you can run Unix on the vast majority of computers out there, something that no other operating system can come close to claiming.

    I'm not going to claim that the infighting hasn't cost Unix dearly, it has.

    However, thanks to the fragementation, Unix can't be kill just because one company goes belly up or decides to make a "strategic switch" to another OS. AT&T tried to get into the computer market in a big way, and then decided to back out, but that didn't kill Unix. Microsoft decided to push Unix (in the form of Xenix), but then got into a spat with AT&T and sold it off to it's largest VAR (SCO), but that didn't kill Unix either.

    Linux and the *BSD versions of Unix are in a even stronger position to survive. When 386BSD stopped being developed, other people picked it up from where it left off and spawned FreeBSD and NetBSD. When SLS stopped being updated, Slackware picked it up. If Redhat dropped off the face of the earth tomorrow, no source code would be lost forever the way RSTS has been lost.

    Unix isn't the best OS out there. It isn't the best financed. It certainly isn't the best marketed. The fragmented Unix market is the only thing that has kept Unix alive.

    Can you honestly say the last 30 years of infighting was a good thing?


  • And guess which API microsoft is trying to squash? OpenGL of course. Their replacement - DirectX only runs on Win 95/98 (and NT to some extent).
  • I usually disagree with the Cato Institute, but every so often, their views will mesh with mine. The anti CDA essay NEW AGE COMSTOCKERY: EXON VS. THE INTERNET [] is a good example.
  • by Eric E. Coe ( 2252 ) <ecoe&reportweb,com> on Sunday May 02, 1999 @09:21AM (#1907712) Homepage
    A forced breakup is likely useless, and will probably fail. And is a very heavy-handed government intervention (which causes political problems). Forced open sourcing of Windows is also a bad idea - it completely goes against the spirit of how open-source projects are done.

    As usual, RMS hit the nail on the head with his proposal [] to force Microsoft to reveal/document all internal interfaces and binary file formats in their products - enabling the creation of compatibile competing products, open source or not. Companies (and open-source projects) can still complete on features (even Microsoft) but on a level playing field.

    This achieves the nearly same effect in the marketplace as a breakup, without the incentive for the Microsoft (or "baby Bills") to fork their code base (more than it already is, that is).

    Who knows, it might also be considered a precedent for how all SW companies should behave (but to make it a universal rule would require legislation). Imagine, a world where software connector conspiracies [] are illegal!

  • by ksheff ( 2406 ) on Saturday May 01, 1999 @01:49PM (#1907713) Homepage

    So how does this really differ than trying to deal with the three main versions of Windows (95/98, NT, CE) now? By breaking up MS along these lines doesn't really change the problems:

    • MS using its market share clout to force other companies to do what it wants
    • Bundling new apps into the OS
    • hidden APIs in the OS tailored to MS applications.

    By breaking MS into 3 OS companies along the existing different Windows platforms, they would still be able to do what they are doing now. MS got to where it is at by controlling the APIs and bundling. Third party developers are always playing catch up with the APIs and the threat that MS will bundle its competing product with the OS.

    When I hear people talking about breaking MS up, they are talking about breaking it up along functional lines: an OS company, an user application company, a server app company, etc. That would still keep Windows as it is, but it would make them publish all the APIs, put their app developers on a level playing field with other software companies, and restrict bundling of these apps with the OS. If MS it to be broken up, that is how should be done, IMHO.

  • MS is irrelevant. They have no bearing on the future.

    The future is Linux, whether MS stays as a monolith or is broken up is completely irrelevant.
    MS is a dinosaur.
  • Just look at all that has went on in the DOJ trial to date and see what's been filed in the Caldera trial to see that. They violated the law (surprise, surprise) and now they've got to pay. It's as simple as that. Now, I don't exactly agree with the original poster's philosophy- but you, are off way out in left field when the hit was a bunt to first.
  • You just described the Win32s API, known also as API of the week. Microsoft kept that one a moving target to help rub out OS/2.

    Keep in mind that the e-mail evidence in the Caldera suit shows that Microsoft kept Windows a moving target. This was to keep Windows from being cloned the as DOS was by DRI.
  • Do my taxes go to Microsoft instead of the US gov't now?

    That would just make all kinds of sense..

    still waiting for my tax return,
  • In the words of Sam Kinison, in the Rodney Dangerfield film, "Back to School",

    "Good Answer!"

  • Bottom line? If the open-source community wishes to be taken seriously,

    a) It needs to shed a LOT of its puerile arrogance,

    b) Members need to learn to control their desire to immediately demolish MS, or at least consider the consequences,

    c) and it needs to find people who write coherently.

    Actually, all the Open Source community needs to do to be taken seriously is to keep quietly cranking out software that is: more reliable, faster, easier to support, and more maintainable than the commercial world.

    We haven't reached our current status because we've got a good PR team. Open Source uses the most powerful form of PR, Word of Mouth.

    People are choosing to use Open Source software because their computer geek friend told them to. They're using it because they get sick of Windows crashing all the time. They are not using because they saw a slick looking ad in some magazine though.

    Your statements are only true if you apply them to a comercial software company. Not to the OSS community. Sorry.

  • by barlowg ( 5396 ) on Saturday May 01, 1999 @12:11PM (#1907722) Homepage
    Clearly this article is full of FUD. Those who believe that a Microsoft breakup will cause undue harm to consumers is dearly wrong. Clearly, this move will benefit consumers with increased competition in all areas, as MS will no longer be able to force the use of their products through integration that other vendors cannot match.

    One point that I greatly disagreed with was that software will cost more. At the moment, free software has moved into a position to be a clear competitor to MS products. If a MS breakup occurred, more software would be developed for these platforms, making platforms with inexpensive, well developed, effective software. Obviously this breakup would cost MS money, they would be forced to actually produce good products instead of well integrated, buggy software. If MS has to spend $30 billion, so be it. They have the money from all the years MS has exploited computer users.

    One other point that was truly ludicrous was that by breaking up MS, the Justice Department would be punishing them for being too successful. Rather, this would be punishment for destroying competition and exploiting customers.

    MS has hurt the computer industry for too long. The computer industry should have the opportunity to use the best product, instead of being forced to use software from one company because of that company's monopoly position. Breaking up MS and opening Windows source code is the necessary measure.
    Gregory J. Barlow
    fight bloat. use blackbox.

  • "Extreme remedies would punish Microsoft for being successful."

    No, lack of extreme remedies would reward MS for being corrupt.

    I mean, the Mafia's "successful" too. How exactly does "being successful" justify any and all means to get there? Where on earth did that twisted concept ever come from? To me, the Mafia and Microsoft are perfect examples of why an unrestrained free market doesn't work.


  • sound handling (which can be a BITCH to do realtime mixing)...

    Hmm, I haven't programmed much sound, but what makes it so hard? It seems like you could have a thread that you pass any sound to (possibly in an optimal format), and the thread mixes in whatever sounds requests it gets real-time, and outputs to sound card/speakers. You still need to write the mixing code for that thread, but it seems straightforward, and general enough that you could use it in most apps.

    But I'm probably missing something, I have little experience....


  • Bottom line? If the open-source community wishes to be taken seriously,

    The open-source community IS taken seriously.

    a) It needs to shed a LOT of its puerile arrogance,

    Some individuals, maybe. Not most. Not the poster you respond to, either. In my experience, the OSS community is much less arrogant than the commercial software world.

    I, too, am sick of MS's whining about a situation it brought on itself. It knows that; its whining is merely a PR strategy to maximize profits, as is everything else it does.

    b) Members need to learn to control their desire to immediately demolish MS, or at least consider the consequences,

    It is controlled. It exists for a reason. The consequences have been well-considered by people who know what they're talking about and have decades of industry experience. Getting rid of MS means that S/W development will no longer be held back like it has been for 15 years. It will also mean that billions of dollars won't be continuously and needlessly sucked from our economy into Bill Gate's pocket.

    c) and it needs to find people who write coherently.

    It has them, lots of them. Many others are coders, not professional writers-- they know what they're talking about, even though their grammer may be bad. You should learn to absorb ideas from writings that are imperfect, you would surely learn a lot.

    (Don't know that the AC's post merited a response, I just felt like it.)

  • "...our most important application is a finance package that's been built on top of Lotus by a third-party vendor. We've been religiously upgrading that package over the years."
    And now that vendor is rewarding you for those years of good customership by abandoning you. They may not be happy about having to do so, but forced to financially; demand for the Lotus version of their product may no longer be great enough to for them to cover the costs of updating and improving it. Apparently there is sufficient demand for the Excel version of their product to allow them to concentrate on it and make enough to stay in business. Can't fault 'em for wanting to survive and prosper.
    But if your company had the source code (and possibly the source code for Lotus as well), they could hire people to do for them what the original company no longer is willing or able to do. It may or may not be financially feasible, but at least they'd have the option. Since your company doesn't have that option is there any chance of getting Lotus to acquire the rights to the Lotus version of that program and produce the Lotus version themselves as an incentive for customers to stay with Lotus?
    (It occurs to me to wonder if the only way MS will let that third-party vendor market a version for Excel is if they abandon the Lotus version.)

  • their own variants of windows. Many apps need 'tuning' to run properly under NT and the W2K betas have serious problems running apps that are well behaved under 95, 98 and NT. What costs will be associated with the splintering or diluting of windows by MS themselves?
  • because I read where the M$ monopoly was costing the consumer $50 Billion .....
  • Stamping out polio probably cost $30 billion. That doesn't make it bad to do.
  • Your article in Smart Reseller about projected costs of a Microsoft breakup failed to take into account that the entire study is biased. Your article indicates that the study is from Microsoft-friendly companies, but continues to present the information without further challenge to its validity. Being from biased sources, I suggest that the conclusions are skewed. This is not objective journalism.

    With the debacle of the MindCraft Windows NT tests fresh in everybody's mind, I am surprised that you would not see through this ploy. Leibowitz presents the worst-case scenerio and then draws conclusions like it is a likely outcome. Leibowitz also ignores moderating influences and past costs.

    And quit saying that Microsoft is being punished for being successful. They deserve to be punished because they used their monopoly position in the computer OS market to leverage monopolies in other markets. This is *illegal* under U. S. anti-trust laws.

    As a long time software developer I've watched markets and opportunities dwindle under the repressive Microsoft regime. At the same time software quality and reliability has plummeted and innovation has been stifled. I suggest that somebody sponsor a study of how much this has cost computer users over the past three decades.

    I suggest that what we have lost is not just the competition, quality and innnovation in an industry, we have also lost billions and billions of dollars to merely prop up Bill Gates' monopoly. How many clever, independant software developers could that money have funded? So Mr. Leibowitz's $30 billion is a mere pittance compared to what Microsoft's monopoly has already cost. If it costs a worst-case $30 billion to repair the damage, so be it.

    The horizontal break-up of Microsoft into three or even four baby-Bills is, in effect, a death penalty to Microsoft. In my opinion, this is the only way to restore competition. For the untold billions wasted on smothering competition and innovation, and for the murder of an untold number of what would otherwise have been productive and innovative software development enterprises, Microsoft richly deserves the death penalty. It's time to put an end to it. Break 'em up.

    Thank you for an opportunity to comment.


    Arne W. Flones
    Long Ship Software A Microsoft free developer

  • by Dr.Hair ( 6699 ) on Saturday May 01, 1999 @07:05PM (#1907731) Homepage
    How many competing companies sold Disk Operating Systems? At least three.
    Did all of these different versions of DOS run DOS programs? Yes. In fact Caldera has a finding of fact that quotes Microsoft e-mail on this very point, much to the chagrin of Bill Gates.
    Was there some sort of consortium set up to administer API's? Not that I know of.
    Did this competition cost consumers and the economy? Actually that same Caldera finding of fact has an e-mail from Bill Gates mentioning that he would charge an extra US$30 or US$40 per copy of MS-DOS if it were not for DR-DOS.

    So if you calculate the extra burden on the economy from every copy of Windows being US$30 to US$40 too expensive, plus the drag on the economy from so many brilliant minds being lured to work for over-inflated stock options rather than working on other potentially more productive software projects, then US$30Billion doesn't sound so bad.

    And if competition scares you, GPL the whole mess. There are too many Windows coders for the code base to "stagnate". Perhaps you wouldn't see the inclusion of voice recognition in the OS, but you finally would see prompt bug and security fixes. And any monkey business with previously unpublished APIs and code breaks within published APIs would be fixed.
    And yes such things do exist. Go find Bret Glass's article from last year where he published code demonstrating that Microsoft never removed, just disabled, the infamous DR-DOS message.
    Some more of my thoughts [] on possible solutions to Microsoft v. DoJ.

  • I don't think so. They're a long-standing Usenet tradition. I'd hate to see all my favorite Usenet-isms go away in the World of the Web.



  • You make a good point about the Cato Institute being a libertatian group. I believe that my extreme displeasure with their various "scientific" analyses has blinded me to their true roots. After reading your post, I did what I call the P.J. O'Rouke test; Is O'Rouke more of a libertarian or a right-wing extremist? I must therefore stand corrected.

    I guess this labels me as a liberal; i.e., anybody else is a right-wing nut.:)

    Nonetheless, I still have a difficult time believing anything that comes out of the Cato Institute. Their various opinions on global warming, ozone depletion, environmental damage, health risk of smoking, etc... has left a bad taste in my mouth.
  • by craw ( 6958 ) on Saturday May 01, 1999 @01:27PM (#1907734) Homepage
    Thanks a lot for this info! I was totally perplexed when I read the zd article and could not figure out how the OS market would be balkanized. As many ppl have recommended, the nature breakup of MS would be along the lines of the OS (e.g., Windows/NT), applications (e.g., Office), and services (e.g., MSN). If this occured, there would not be a balkanization of the OS as it would reside in only one group.

    A more likely scenario would open marketplace with stronger competition in all aspects of software development. Consumers would then eventually benefit from a decrease in costs driven down by real competition.

    Finally, MS currently makes a yearly profit of around $6(?) billion on sales of about $16(?) billion. (Note: Last quarter MS earnings were $1.9B on revenue of $4.3B). This is an obscenely high profit margin that is ultimately paid for by the consumer. I bet the good professor did not factor in a reduction in the profit margin to a level commensurate with the rest of the software industry.
  • by craw ( 6958 ) on Saturday May 01, 1999 @02:05PM (#1907735) Homepage
    The Cato Institute makes Ronald Reagan look like a card carrying member of the ACLU. They actually critized Ronnie when he was President, because he did not strongly push the far right wing economic agenda that they supported. FYI, the other organization to be wary of is the Heritage Foundation.

    The Cato Institute (CI) has been a bane for hard-working honest scientists in this country. Their modus operandi (operating procedure) is to enlist the aid of a handful of scientists/mercenaries who get paid to support the views of the CI. They are fully aware that the standard scientific method is one that is generally cautious. Scientific discourse is one of give and take accentuated by meaningful debate. The CI then uses this caution and debate as a sign of waffling and indecision. If 95 out of 100 scientists agree on a particular conclusion, the CI will merely point to the 5 dissenters as proof that there is not overall agreement. Unfortunately, many politicans who are trained as lawyers not scientists, would then agree that there is still doubt. After all, to be found guilty in a trial, *all* the jurors must agree.
  • Mindcraft has issued a press release stating that had they been asked they could have cococted a MUCH higher number. "We are disappointed by this lack of imagination and restrain shown by ACT, our Fiercly Unimpeeded Detailing (FUD) methodology would have yielded much more useful data for the defendant" claims Mindcraft
  • ah, but if you break up the company into groups based on products, what you very likely will get is multiple companies with monopolies. So we get a few Baby Bills (at least in Apps [Office] and OS [Windows], possibly others). I don't see this giving much additional choice to consumers. The company consumers get the product from may differ, but the choices are pretty much the same.
  • My rationale there was that since the market for OSes on x86 was the area MS' illegal tactics have hurt, that should be where the money is used. To use it to try to attack the x86 processor market (ie mostly Intel, AMD, and a few others) would be punishing companies who haven't been found guilty of anything.
  • by Stradivarius ( 7490 ) on Saturday May 01, 1999 @03:31PM (#1907739)
    If a MS breakup occurred, more software would be developed for these platforms, making platforms with inexpensive, well developed, effective software

    Why do you think that more software would be developed for these Windows descendants than would be developed for the current Windows product? If the product becomes balkanized, as it probably would in a MS breakup, then developers are going to have to develop for what essentially becomes a few more different platforms. You'd be getting all the problems of the fractured Unix market, without the technical superiority that allowed Unix to survive. It would seem to me that developers would often have to pick one "flavor" of Windows to develop for (due to lack of resources to do all). This would decrease the availability of new software, not increase it.

    Suppose through some method the new Windows vendors decided to maintain a common API between them to ensure compatibility. Then, it would seem that you would have the same amount of software developed for Windows. Developers would still choose Windows as their primary target platform due to market size considerations. I doubt you're going to suddenly find hordes of new Windows developers just because there are X number of companies selling Windows rather than 1. The price of Windows might decrease, but this is really doesn't have any significant effect on the developers or the amount/quality of software they produce.

    Plus, if you have to do this Windows-by-committee approach, you will run into two problems. The first is that new Windows technology would be vastly delayed in being implemented, since all the other Windows vendors would have to come up with their own implementation in order that all versions remain compatible. Which tends to remove any incentive for these new companies to improve the product, since they would not be able to differentiate their product significantly. This in turn would lead to problem number 2, a balkanization of the product as each Windows firm got tired of the situation and decided to add its own features independently.

    You could get around some of that nastiness by releasing the code under the GPL. The biggest problem though with GPL'ing it, as I see it, is that the product may quickly stagnate. There are only so many OSS developers out there. How many of them do you think are going to want to switch from their current projects to work on Windows, which more often than not has been the object of their scorn? An OSS project can only be successful if it has sufficient development efforts behind it. This means a lot of volunteers. I don't see Windows getting enough there, even if software companies were to employ some people to work on it (much as RedHat does with Linux). In which case, Windows doesn't get much better, and consumers suffer *more* than if M$ had been at the helm.

    It seems to me that a breakup would indeed decrease the availability of software and quite possibly increase the cost to consumers (due to increased development costs). An open-sourced Windows would likely stagnate due to lack of developers, and consumers would again suffer.

    I think what should be the primary consideration in deciding what remedies should be taken is what is best for the consumer, NOT how to "punish" Microsoft. We don't want the punishment of MS to screw over consumers. Breaking up the company would punish MS, but I fail to see any real benefit coming out of it (as I discussed above). For this reason I think regulatory measures are what is needed in this situation. They can both help consumers and punish MS.

    My suggestion for a better (IMHO) way to deal with the M$ situation is this: require a standard Windows pricing for all OEMs. Require all the APIs to be fully open and documented, so that M$ applications developers don't have any advantage over the competition due to also making the OS. Do not allow MS to require one product to be bundled with another. Do not allow exclusive deals (i.e., allow alternate OS and dual-boot configurations without the OEM being at risk of losing the Windows license). Require that their OEM deals be on a per-copy-of-product, rather than per-machine, basis (IIRC, this may have been in the consent decree, but I don't remember exactly). Forbid all those other anti-competitive contractual issues that M$ was criticized for. Slap them with a large fine (something that will be significant to a company of MS's size, not merely a slap on the wrist). An interesting idea would be for the fine to be used to help fund the development of other OSes on x86 (though that might be rather complicated to administer well, it could work out if handled properly).

    This way you eliminate the anti-competitive behaviour, punish MS, and don't screw over consumers.
  • That's the claim of a two pro-Microsoft trade associations. The Association For Competitive Technology (ACT) and The ASCII Group Inc., an industry association of resellers, are meeting today with more than 30 congressional offices to discuss the potential costs to consumers..."

    Are we suprised? No. But to do something - we need to know what their points are so we can debunk them. Unfortunately, the Microsoft Borg seem to be adapting - they're not going public with what they're saying to our representatives. Thus, we cannot issue a rebuttal. Does anyone know if this will be appearing in the congressional reports?

  • Sure, It's gonna cost more.....for those of you who actually BUY Microsoft products. The 'Microsoft Rift' won't tide over the Open Source community, so guess what? This doesn't affect me.

    One COULD argue that the rift would hit Computer manufacturers, and it would drive up hardware prices, so that COULD be an issue. Microsoft can simply say "Oh no, we need to pay for this mess. Let's charge each OEM an extra $50 for each package. No use hoping, this is probably going to be one of the effects.

    -- Give him Head? Be a Beacon?

  • the government stance was to either open ther source licence it and or tell them not to put any embeded thingys into the operating system. What does that cost does it actually cost 30 million dollars to come up with a licensing agreement?
  • I don't see a new 30 billion dollar market for software development as a bad thing, especially in light of the fact that, outside of a few domains, the mainstream desktop development sphere has been sort of moribund. The current environment is also very favorable to open source, and I think a lot of that $30 billion would be spent on open source projects.

    That's $30 billion going to third parties, too, spreading the wealth away from the center. That's development occuring in new places, under different auspices. The consumer would benefit from this upsurge in innovation and competition in the medium term - an upsurge that is unlikely in a market dominated by a single, anticompetitive player.

  • Liebowitz isn't the only one claiming Microsoft has done no wrong. According to Ted Johnson, cofounder and executive VP of Visio Corp.--and a panelist at the Ralph Nader Consumer Project on Technology Conference, "Extreme remedies would punish Microsoft for being successful."

    I believe that Microsoft owns 10 per cent of Vision, and I know that Bill Gates sits on their Board of Directors.

  • I mean Visio, not Vision. My fingers are like splintered popsicle sticks.
  • No, I don't, and I believe that $30 billion of expenditures will be driven by the needs of the existing market.

    However, it is possible to use open source to develop for a Windows-based environment. Just because the OS is not free/open, doesn't mean that the middleware, the new clients, the new protocols can't be. Open > Linux.

    As far as the consumers go, there's ALWAYS an overhead for competition. Advertising budgets, distribution channels, redundancies in R & D, mean that a multiplicity of producers will have an overhead that a monopoly lacks. That's no reason to move to monopolistic models - the benefits of competition seem to outweigh the costs.
  • Um, what is "the market" made of, animatronic robots?

    "The market" is an abstraction of human economic behaviour. It isn't an entity in itself.
  • Bill Gates is worth what? 50+ some billion? Where did he make that money from? True some came from investments, but much of it was made on the backs of consumers. And that's just Gate's dough. That isn't counting the other MS million and billionaires, not to mention the profits of MS itself.

    So if the 30 billion figure is true, it looks like breaking up MS will cost less than keeping it together! It will save us money! What's the problem? ;-)

  • The "tobacco deal" could certainly be called extortion, where the states got tons of money from big tobacco companies allegedly to pay for smoking related health-care, and then spending the money on non-smoking, non-health care related activities. The tobacco companies broke no law, they were just dishonest about the health effects of their products. In all fairness, what business is willingly going to tell you that their product is bad for you?

    However, this is different. MS is clearly in violation of anti-trust laws
  • I can't tell if those pages are serious or a farce.
  • That's because standards were set.

    You used to not be able to buy a telephone, you had to lease it from AT&T. They were usually hardwired into your wall. The modular phone jack didn't exist.

    Before the AT&T breakup, standards were forced so that you could go buy phones and phone equipment from different suppliers.

    That's a reason why early modems had acoustic couplers-- because the modular jack was just coming into use!
  • by Cjoh ( 8885 ) on Saturday May 01, 1999 @12:14PM (#1907752) Homepage
    Whoever said this should have his mouth stapled shut, because only more idiotic things will come out.

    AT&T had similar FUD going on about it when it was about to break up. Breaking up market reigns doesn't cost money to the consumer, it makes money for the consumer. In this case, market fragmentation would create more competition, which, in turn would cause more innovation for less money. Heck, how many distro's does Linux have? How much does Linux cost?

  • Your post echoes a sentiment I've heard expressed frequently in these discussions: Why should Microsoft, the paragon of American hi-tech success, be punished for nothing more than being wildly successful?

    The answer is - it shouldn't and it isn't. The control of monopolies is fundamentally necessary to achieve economic efficiency in a capitalist system. It's not a question of the monopolist being "bad" - it's a limitation of how much a free market can do for you.

    The basic idea behind a free market system is to create a playing field with a carefully crafted set of rules such that if everyone does nothing but pursue their own greedy self-interest, the market operates efficiently. Recent political rhetoric has become confused between the cause and the effect. The goal is economic efficiency and prosperity. The means of achieving that goal is the free market. But in cases where the free market fails to achieve that goal, intervention is not only acceptable but necessary.

    The reason a monopoly is inefficient is that monopolists' self-interest leads them to produce too few goods; market demand will then cause these goods to be sold at too high prices. I won't go into the details; look at any microeconomics textbook. But the goal of government regulation has to be to get the monopolist to produce more of the good, so that prices drop to the economically efficient level. This can be accomplished in various ways: Allowing the monopoly to continue but regulating their price, like in local telephone service; Allowing competitors to enter the market and preventing the monopolist from destroying them, like in long distance telephone service; Breaking up the monopoly itself into smaller competing firms, like with Standard Oil. Presumably there are other ways as well.

    The problem is, it's hard to see Microsoft as a traditional monopolist. Are they producing too few goods and charging too high prices? Depends on how you look at it, I guess, but there isn't any clear price gouging going on. If you can't see Microsoft as a traditional monopolist, but you still want to take action against them, you have to invent some new definition of the term 'monopoly' that's different from "a supplier who produces all goods in a market." Once you start redefining terms, it's anyone's business.

    But classic economics is not quite done in yet. Remember, you can calculate what the economically efficient price is supposed to be in a market. On the supply side, the condition necessary for economic efficiency is that price equals marginal cost. "Marginal cost" means the additional cost involved in producing the final unit of output. In the case of shrink-wrapped software, and ignoring technical support for the moment (since at most software firms it is now charged for separately anyway), marginal cost equals the reproduction and materials costs of the CDs, manuals, and box--about $10 to $20 for most software. Therefore, practically all software should cost $10 to $20. The free market would establish a price in this range for all software, and any software that costs more than this must be benefiting from some kind of monopoly power--otherwise consumers would not pay the higher prices.

    It's easy to see where this monopoly power comes from: Copyright and, to a lesser extent, patent law. Without copyright and patent protections, software *would* sell for the cost of materials--because even if the company that produced it wanted to charge more, someone else would make copies and sell them for less. Traditionally, copyright and patent protections have been defended on the grounds that in their absence, there would be no incentive for people to invent things or develop new products. This is probably true. The free software movement has proved that under some limited circumstances, it doesn't *have* to be true--but, as has been pointed out, most free software authors also have day jobs, many of which are paid for by revenues generated by copyright and patent monopolies.

    The issues become confusing at this point, but at least we can focus on what they actually are. The Microsoft trial should be seen not as reward or punishment for one particular company, but as a fine-tuning of the ways in which copyright and patent law should be applied to the software world. In this sense, the Microsoft trial is likely to set precedents that will shape the software industry for decades, free and commercial alike. The free software community needs to get past the immediate anti-Microsoft knee jerk and recognize that there is a real debate needed on the role of intellectual property in the world we want to create--bearing in mind both that copyright law forms the underpinnings of the free software world (via the GPL, etc), and that whatever Microsoft is going through right now, *we* may have to go through something similar if *our* operating system ever gains an 80% unit share.

  • Shux, under win95, I have oodles of files (thanks to MSIE4 and 5) that identify themselves as being Win98 and Win2000 components. And even a few that ID themselves as being NT 4 components (Goddess only knows where they came from...).

    Speaking of MSIE5 -- yeah, I installed it all right -- and discovered to my amazement and delight that there are numerous pages at that are broken when viewed with it! :-)

  • an additional flaw in the methodology seems to be that the goal for the required changes is to remain compatible. although this is true for many, it's definitely arguable that many ISVs will take the opportunity to lessen their own costs by moving towards APIs that are open. there will also be those who look at what's happening in the open source community and based on that make a completely clean break.

    it should also be noted that in the next 3-5 years, users will no longer even look at a desktop (or want to). a large portion of the resistive comfort-me mindset will be transferred from visual appeal to other areas of comfort (like, can i get this done w/o rebooting and not have to work this weekend). the age of cynical users is upon us. why pay part of that USD 30e9 when they can invest in their own entertainment?

  • Don't forget the most important "consumers" for the PC OS market are not home users, hobbyests, schools, unix fans, slashdot readers, and so on. The real consumers are the businesses who collectively made the decision that they want a "standard" desktop OS.

    Even thought the average corporation is paying through the nose in technicians and licences for all of those Win 9x desktops, they probably wouldn't choose to go back, because the standardization is saving them money in the long run. (A different definition of "best product".) Would a fractured Windows cost them money? Absolutely.

    Of course, now that these company's are seeeing some of their other favorite vendors getting squeezed by illegal monopolistic tactics from Microsoft, maybe there not so sure anymore about a monopoly desktop supplier.

    But the fact remains that the most important customer base (corporations) intentionally chose to make Microsoft what they are - a desktop monopoly.


  • Certainly the Win16 -> Win32 transition cost corporations money, but much less money than a Windows -> Linux/OS2/MacOS transition would have cost. Don't forget that a Win16 line-of-business app from 1992 would run on all PC Windows platforms for the forseeable future.

    The cost of a mixed Windows base is higher than a standardized desktop, but much lower than a mixed Unix/Macintosh/Windows/OS2 base.

    [As for WinCE, I don't see that being supported by businesses at all (possibly in the future as a NC-type device). Win64 doesn't exist yet.]

  • by Ty ( 15982 ) on Saturday May 01, 1999 @12:05PM (#1907777)
    and it will cost the consumer OVER $30 billion if it is not split up in the long run
  • I mean, aside from all that stuff about the proletariat.

    One argument the Commies always used is that competition is wastefull. Sure it is. The alternative is worse.

    We can have one huge, flawed, anti-competitive company, or we can have a bunch of smaller ones wasting resources. Without competition, there's no way to stop the huge company from wasting our resources at their pleasure, and, eventually, it gets a lot worse than the waste produced by competition.

    That's one of the things that makes Linux great. There is no monopoly on the code. When something needs to be done (like, er, write a distribution), there are several different groups willing to do their best. Sure, it's wasteful to create multiple distros, but their competition makes them significantly better.

    Duh. We knew this already.

    $30 Billion? How much has M$ alread wasted?

  • Okay, I've never been into marketing or support myself but let's look at development. What would happen if Microsoft changed some of the more important API's (which seems somewhat likely to me)? No doubt the software manufacturers would have to adjust themselves to this. As they would if Microsoft were to be split up. In the price for a software package you almost always add a fair amount called "further development". Thats where this money is supposed to be coming from.

    Ofcourse, breaking Microsoft up isn't the best solution. Richard Stallman has written ``The Microsoft Antitrust Trial and Free Software'' [] article in which he suggests three remedies, should Microsoft loose.

  • by RyanGWU82 ( 19872 ) on Saturday May 01, 1999 @12:08PM (#1907788) Homepage

    I was at the "Which Remedies? Appraising Microsoft II" conference yesterday, at which Liebowitz first introduced the results of his paper.

    Liebowitz made the assumption that Microsoft would be split into three entities, each of which developing their own competing version of Windows, without any interoperability standards or agreements. Therefore, when companies introduce new applications, they'd have to port it to three different operating systems. Liebowitz (and, presumably, research assistants) directly contacted executives at a number of large software firms (he didn't say how many firms). He specifically refused to talk to assistants, but rather only to executives. He asked them how much they expected their R&D, tech support, and sales budgets to increase, if they had to support three OSs rather than one.

    Liebowitz then multiplied these numbers by overall industry revenue figures. He determined that R&D costs would increase by 78%, technical support costs would rise 46%, and sales and marketing costs would rise by 5-10%. He then decided that his overall projections were too high, so he divided the end result by three. (I'm not making this up!). He finally came to the conclusion that software costs would rise about 6-and-a-half percent, or $30 billion.

    He also said that Microsoft was a "temporary natural monopoly," which got a small hoot from the economists in the crowd. He said that in the computer industry, there is "sequential replacement of a dominant firm." First VisiCalc, then Lotus 1-2-3, then Excel. First CP/M, then MS-DOS, then Windows, then 32-bit Windows. However, Mark Cooper (Research Director, Consumer Federation of America) rebutted this. Cooper said that there may be sequential replacement of dominant products, but that Microsoft has ended up producing the dominant product in every industry. (i.e. going from MS-DOS to Windows to Windows 95 may reduce the MS-DOS monopoly, but not the Microsoft monopoly as a whole.)

    That's pretty much what's interesting about Liebowitz's speech. If anyone wants me to put up the rest of my notes from the conference, let me know [mailto].

    Personally, I don't like the angle of the ZDnet article. They interviewed two of the three pro-Microsoft panelists at the conference, yet left out any commentary from the other twelve panelists!


  • I would like to know how much the price Id's Qukae 3 Arena was *inflated* because they developed for three seperate platforms. Mac, Windows, and Linux are probably much farther apart in a programming sense than I would assume three versions of windows would be.

    Nope. All three versions use standard OpenGL calls, which are exactly the same on all platforms. The only things that had to be changed were mundane, easy things, like setting the video mode and handling mouse/keyboard input. Well, some harder stuff, like networking and sound handling (which can be a BITCH to do realtime mixing), but probably 95% of the code was exactly the same on all platforms.

    "Software is like sex- the best is for free"
  • Bogus numbers: It doesn't take into account the monies lost to date from having a monopoly stifle software and hardware innovation. Also doesn't take into account the high price people are forced to pay for windows in the absence of competition.

    Another interesting point: higher costs due to multiple incompatible windows? There is the current situation, not a new thing. For example, we currently have:

    1. Win16 (still used by some businesses)
    2. Win95/98
    3. Win NT, 32-bit
    4. Win NT, 64-bit
    5. WinCE
  • by GotMilk? ( 28465 ) on Saturday May 01, 1999 @12:56PM (#1907800)
    I would like to know how much the price Id's Qukae 3 Arena was *inflated* because they developed for three seperate platforms. Mac, Windows, and Linux are probably much farther apart in a programming sense than I would assume three versions of windows would be.

    If anything, this might lead to software companies writing more portable code an we may even see more variety of software available for the OS of our choice.

    Not breaking up windows in the long run will do more harm than good.


  • Well, the whole splitting MS up, and forcing to sell rights/license te source seems like an odd thing to do. As much as MS annoys me for the reasons mentioned by ksheff above, and others, "Bundling new apps into the OS, hidden APIs in the OS tailored to MS applications etc", dominating a market if done legally and morally is really nothing to be punished for...

    If there's one useful thing about Windows, it's being able to bung a lump of hardware in a box, and have it more or less work (Forget just for a sec how hard it may be to write a device driver if the proper low-level info isn't made available to you by MS *G* etc) without much fuss...

    Having multiple versions, or descendants of Windows would perhaps run the risk of fragmenting the driver base available, when all that the hardware manufacturers really need is a sporting chance at making something work well, easily, and the software guys need is the same chance at writing good software as MS to give people a choice, and compete equally... We can live with the fact that MS programmers may be more familiar with windows, but only if the cards are face-up.

    I personally like having windows available for a desktop if it's needed, because including all that stuff in Linux (although it would be cool :) ), could mean that the drive to make that desktop stuff prettier would wind it up on the road to where windows is now (IMH, albeit malformed, O that's what's gonna happen to Redhat)... Striving for the pretty user market, and running the risk of ever-so-slightly neglecting the important stuff... (Although in MS' case it's "completely neglecting the important stuff...")

    My AU$0.02, cheers.
  • Spin doctors never cease to disgust me. If Microsoft were to be broken up, it would not be for the purpose of creating multiple versions of windows. Rather windows itself would be the product of one division, while products like Office would be made by other divisions. Other possible divisions are easy to imagine such as one for development tools such as Visual C++. This is nothing but an attempt by Microsoft to create the impression that breaking them up means breaking windows up. Nothing could be further from the truth. The fact that they would resort to this kind of spin doctoring, which any child in middle school can see through, shows that they are afraid. Fud is the tools of those who have no better options.
  • Of course, now that these company's are seeeing some of their other favorite vendors getting squeezed by illegal monopolistic tactics from Microsoft, maybe there not so sure anymore about a monopoly desktop supplier.


    The company I work for has always been a WordPerfect and Lotus shop, as well as a Microsoft OS supporter (much to my chagrin). Our main function involves accounting and finance (we're a holding company), so our most important application is a finance package that's been built on top of Lotus by a third-party vendor. We've been religiously upgrading that package over the years. But a few months ago, we got a letter from them telling us that they would no longer be producing a Lotus version of their product. In the future, their sole platform will be Microsoft Excel. Thus, we have the choice of either finding a new finance package or switching from Lotus to Excel and retraining all our employees - not only at the home office, but at all of our subsidiaries.

    The good thing about this is that it's finally convinced management that there's something wrong with Microsoft owning every market they enter. They're Lotus experts, and are well aware that there's nothing about Excel that makes it worthy of being the dominant force in the market...except that it's made by Microsoft.

    So finally, I'm getting comments from the CFO and the General Counsel like, "Justice has to do something about Microsoft; this is getting out of hand."

    But the fact remains that the most important customer base (corporations) intentionally chose to make Microsoft what they are - a desktop monopoly.

    In a way, yes. But perhaps it is more proper to say that corporations chose IBM. It was the IBM PC they chose, and that set the whole thing in motion. That gave Microsoft a steady stream of revenue and a great deal of brand recognition, both of which they parleyed into the current monopoly. IBM could have chosen some other company when they went shopping for an OS, and that would have changed history completely. If IBM had done that, would Microsoft still be the choice of businesses everywhere? I doubt it.

  • by Wil Mahan ( 33123 ) on Saturday May 01, 1999 @01:19PM (#1907820)
    Liebowitz initially oversimplifies the problem by selecting a worst-case scenario (for MS) where Microsoft is broken up into three companies, each producing Windows. There are various other reasonable possibilites for breaking up Microsoft.

    But what totally invalidates his argument is the the assumption that the different versions of Windows would immediately become so different that they would require vastly greater development resources by software companies. He concludes, through an unscientific survey, that the breakup would cost consumers $30 billion.

    Such a scenario is totally unrealisic; it is clear that market forces would prevent severe fragmentation. If one company tried to create an "incompatible" version of Windows, there would be few applications for it, and no one would buy it. What company would write software for a platform that caused it to lose money? Competition would prevent the segmentation that Liebowitz predicts. For example, why has Linux, which is distbributed by a variety of companies, not broken into incompatible factions?
    Liebowitz apparently provides no evidence to suggest that Windows would become segmented into incompatible versions.

    Furthermore, he ignores the positive effects of the breakup. The benefits of competition would certainly drive down the price of Windows, and thus actually save money for consumers.

    Considering the fact that Liebowitz's study was funded by "pro-Microsoft" organizations, a few small errors wouldn't be suprising. But his basic posulations are flawed, leading to a confusion of the facts. Coming from a MS supporter this "study" therefore appears to be nothing but (to use an over-used term) FUD.
  • by zaks ( 33796 ) on Saturday May 01, 1999 @01:06PM (#1907826)
    Liebowitz has authored other studies and papers defending Microsoft's position. "Dismal Science Fictions: Network Effects, Microsoft and Antitrust Speculation," co-authored by Stan Liebowitz and Stephen Margolis and published last year by the Cato Institute, examined lock-in, antitrust, and the link between quality and software market share, refuting arguments that Microsoft's lock-in position allows it to engage in exclusionary or predatory business practices. The Cato paper was a preview of a book, tentatively titled "Technology, Innovation and Market Competition," due out this year.

    Anyone who watches C-SPAN with any kind of regularity knows that the CATO Institute is an incredibly right wing organization. I once saw them actually defending global warming - the reasoning was that winter costs our economy more than the greenhouse effect.

    The real reason behind all of this is that they're rabidly against any kind of government intervention in the economy, be it to stop companies polluting the air or monopolizing software.

    If you start off with this kind of an ideological assumption, you can prove virtually anything - pigs can fly, global warming is good, and Microsoft is not a monopoly. The only thing you have to do to write these surveys is fit the facts to what you and your friends at the CATO Institute have been believing all along - capitalism is best left unchecked.

    Even if you agree with their ideology (and I obviously don't), is this a way to do independent research?
  • What frustrates me with NT is that every two months things change. Lets start with DDE, then OLE, OLE2.0, then ActiveX, then COM, then DCOM, then COM+. Sure they are all kinda the same, but enough differences are present to frustrate the f**k out of you.

    I'm not in love with Microsoft by any means, but you're really trying to say Linux kernels, GUIs, applications, etc. are allowed to evolve but NT isn't? That doesn't seem very fair.

    Install a Linux box using up-to-date kernels, desktops and apps, go to the North Pole for two months, come back and see how much of the stuff you installed two months ago has been revised by the community. I don't see a big conceptual difference between that and Microsoft evolving NT.

    The evolution in technologies you mention that culminated in ActiveX has taken place over a period of about six years; saying the ActiveX interface changes every two months is a bit of an exaggeration :)

  • I think it was maybe Bob Metcalfe or Nick Petreley who first mooted the idea of making the APIs not only open, but under the control of an independent moderator (much like the definition of HTML and HTTP is under the control of W3C). I don't know how this would/could work in practice, but in theory it sounds pretty good to me. It could certainly help to encourage emulation of Windows apps on other platforms, which (whether we like it or not :) will likely be a deciding factor in any business OS purchase decision. It could also help prevent Microsoft's apps getting secret hooks into the OS (_if_ indeed they do: Microsoft's always denied this, just claiming its programmers were better at utilising the documented API calls than other companies), thus putting their app developers on an even footing with competing app developers.

    I don't think it's fair to require Microsoft to open source any of their products unless _all_ software companies open source their products. If companies want to publish source code (a la Apple [albeit under a GPL-type license], Netscape) then that's great, but I don't think one software company should be singled out and forced to publish its code.

  • Breaking up M$ will probably improve the stability of M$ products. The first time you install Access 97 on Win 98, it won't run. Why? As an article in Byte [] (MS Is Not Done) shows how M$ changes its API to thwart competition because it controls the API. M$ probably changed something about the API or the registery from 95 to 98, and forgot to send the memo to the Access developers. Breaking up M$ will give them less incentive to change the API if the branch that controls the API only develops the OS. M$ needs to follow their own advise. If you haven't read Code Complete, you should just to see how some of their developers know how to do stuff right, but probably don't because of marketing pressure. (3 of 10^8 reasons that open source projects are better than commercial projects.)
  • by Velocette ( 170345 ) on Saturday May 01, 1999 @11:26PM (#1907848)
    oh, it's gonna cost too much money to restructure the economy of microsoft...
    oh, we're punishing microsoft for having a successful system...
    if we end slavery it will hurt all americans..
    what about the billions of dollars in new companies, new technologies, new innovations that ms has quietly stamped out? are these dollars irrelevant? what about the inflated prices consumers have been forced to pay? where is this cost considered?
    i think we all know who is paying our author's rent...

"The C Programming Language -- A language which combines the flexibility of assembly language with the power of assembly language."