Being Mac users, most of us would love to see Microsoft chopped up
into tiny pieces. However, some dismiss the notion as uncalled for and
inappropriate. I believe these opinions are shortsighted and totally
oblivious as to what Microsoft can do with its monopoly power.
Having a monopoly doesn't mean that a business is the only choice.
It means it controls a vast majority of the market, can set its own
prices, and competition in goods or services is difficult or
uneconomical. Also, in a monopolized market, new firms are virtually
unviable.
While I don't consider the other choice - the Mac - difficult or
uneconomical, to the vast majority that's exactly the case.
Think how much it would cost a firm up front to totally convert from
Windows to Macs. Firms are forced to continue choosing Microsoft
products. They not only have to keep on using Microsoft, they have to
pay Microsoft's prices.
In an open market, market forces eventually set prices for goods and
services at equilibrium, market forces being demand and supply.
Microsoft could charge whatever price it wanted for Windows 2000, and
make the next version of Office incompatible with Windows NT, forcing
businesses to purchase Windows 2000 at a price just below the cost of
converting to a different product - and way above market
equilibrium.
This power, whether Microsoft uses it or not, produces situations
which will eventually harm consumers. It's not the present we need be
concerned about, but the potential of it in the future.
Microsoft has already demonstrated it can use its monopoly in PC
operating systems to cripple competition in other fields. Internet
Explorer, Microsoft's web browser, was built into Windows 98. This move
gave little advantage to consumers or businesses. However, soon after
Win98 shipped, Internet Explorer's market share overcame Netscape's,
showing that its monopoly of operating systems allows it to enter and
dominate another market.
What's next? Microsoft isn't going to stop with web browsers. It has
entered the PDA market. Microsoft has engineered the PocketPC system to
easily sync with Microsoft Office software. While this will benefit
consumers now, it will make PocketPC the obvious "better" choice
because of the dominance of Office and Windows, making other choices
(such as Palm) more difficult and, soon thereafter, quite possibly
nonexistent. I give Microsoft two years to own at least 80% PDA market
share if nothing stands in their way.
That's not all they can do. Microsoft could easily build Office into
the Windows operating system. Office already has a near monopoly in the
business and consumer office software - Word and Excel each account for
94% of their market. Imagine if it was part of Windows.
As computers begin to seep into other appliances, I'm sure Microsoft
won't be able to resist. With PDA dominance, it makes perfect sense to
have the same system running on everything. Refrigerators, cars, cell
phones, televisions - the possibilities are near endless. It's a domino
effect. Dominance in one field makes Microsoft's product in another
field the better choice, which soon leads to dominance in that field,
continuing the cycle.
If unchecked, Microsoft will continue to make itself the first
choice of unknowing consumers. If this keeps up for long, Microsoft
will become the only choice. It isn't far away, and you unbelievers can
keep on unbelieving.
Microsoft used its power to dominate the OS, word processor,
spreadsheet, and browser markets. Given the chance, it will do so again
in other markets.
