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Microsoft: Evil Empire or Benevolent Dictatorship?

Posted on: February 26th, 2007 by Craig Rairdin 1 Comment

Now that Iowa ambulance-chaser Roxanne Conlin has come to terms with Microsoft in the last remaining Microsoft antitrust case, I feel free to disclose that I was one of a half-dozen or so Iowans asked to testify on behalf of Microsoft. Had the trial continued, I would’ve been on the stand sometime in April.

This all started when I heard about this class-action suit and chose to opt out of the class. Apparently about 1500 Iowans felt strongly enough about this that they sent a postcard or email to Conlin’s office requesting to opt out. Microsoft’s lawyers got ahold of this list and started making phone calls.

Among the 1500 they found the usual mix of crazies, curmudgeons, and the simply confused. But in there they also found a handful like me — the pearls among the swine (an apt metaphor given the locale). So I was invited to testify.

Conlin claimed on behalf of a handful of technically illiterate Iowa business people that Microsoft used its monopoly status to artificially raise the price of its operating system and office applications. Besides being impossible to prove (how do you show conclusively how reality would have progressed had another reality been in its place) its premise is arguably false. The average price of Windows, Word, and Excel have declined since their introduction, because of the competition Microsoft faces in these markets.

For example, one of the benefits of using Microsoft’s Office applications is the common file format that facilitates the exchange of documents between people inside and outside of the company. However, I can get the same interoperability for free using OpenOffice, which I have installed on more than one system. Because of OpenOffice and applications like it, I am free to decide whether or not to spend money on Microsoft Office. This means two things: First, if I chose to buy Office, then I can hardly sue Microsoft claiming I chose to spend too much money. Second, if Microsoft wants my business, their price has to be low enough (and their features strong enough) to convince me to choose them over a free alternative.

Another example: Laridian has four dedicated servers that make up its Web and email presence. One runs Linux because the applications available for Linux are simply better for the tasks we need done there. We don’t feel pressured to pay extra for Microsoft’s operating system for that machine. If Microsoft wants our business they need to price their products to compete with what in many cases is free; they have to have a feature list that exceeds the competition; and they have to be nice to the third-party developers who write apps for their servers so we’ll have a nice selection of products to run on our server.

As an independant software developer, we can make the case that it is good for software prices when there are a small number of operating systems. Consider the desktop PC market: The fact that Windows dominates means we can focus our development efforts on writing programs for Windows and be assured of a large potential market for our products. We can then leverage that work to simplify the task of porting our apps to other operating systems such as Mac and Linux. (Depending on our market we might start with Mac or Linux and later port to Windows.)

One of the nice things about the PDA market from around 1998-2003 is that there were two main players: Palm OS and Microsoft. We could dedicate our small staff to those two platforms and be confident that we were reaching a large percentage of PDA users. Contrast that with the current state of the smartphone market, in which literally dozens of proprietary operating systems vie for leadership. If we develop Bible software for one model of smartphone, we may have to start completely over in another programming language to target our software to another phone manufactured by the same company. This is why you don’t see any software titles that dominate all phone systems.

You could argue this is good as it creates lots of little companies who all have to innovate to stay in business. The problem is that in reality it fractures the market into tiny submarkets that are too small to keep any serious players profitable. If they can’t be profitable they can’t innovate, and customers suffer the consequences: It is either the case that software for their device is very expensive or perhaps even unavailable.

By dominating the desktop operating system market, Microsoft makes it possible for a large number of companies to thrive. As a result there is more competition, so prices are driven down. Because some of these products compete with Microsoft products, Microsoft prices are driven down. So in fact, Microsoft’s so-called monopoly of desktop operating systems drives all software prices down for Iowa consumers.

Furthermore, it can be argued that without a strong Microsoft Windows, there’d be no Mac or Linux software. For example, it’s unlikely we’d seriously consider Bible software for Linux. But since much of the code we write for Windows Mobile could be compiled to run under Linux, it’s more likely we’d consider Linux as a secondary platform. In this way, the presence of a dominant operating system actually makes more software available for other operating systems.

There is legitimate concern that Microsoft could use it’s alleged “monopoly” as an excuse to reduce its investment in creating great software and supporting companies like ours who are trying to create products for its operating systems. We’ve found the opposite to be the case. For example, there’s no reason a monopolistic Microsoft would have to even talk to third-party developers like us. But we’ve found developer tech support at Microsoft to be outstanding. In fact, when we’ve brought bugs to their attention, they’ve written code for us that bypasses the bugs. Then, when they’re done, the boss calls us to verify that they did a good job for us. We’d have a hard time imagining how we could make their tech support better.

I would have loved the opportunity to make this case on the witness stand. Unfortunately, this trial was never about discovering the truth. It was about taking as long as possible to make a non-existent case so that Microsoft would come to the conclusion that it is cheaper to settle than to continue to fight. Out of the rumored $300 million settlement, the lawyers will pocket $100 million or more. The plaintiffs will each get a few thousand, and the residents of Iowa — the alledged “victims” that Roxanne Conlin is fighting so hard to protect — will average less than $50 (assuming you saved all your receipts for Microsoft software over the last 12-15 years). Ahh, the sweet taste of justice.

One Response

  1. Michael Lane says:

    Craig – great post, I could not agree more. Microsoft has brought more innovation and progress to technology than any other company I can think of. I truly believe that they do far more good than harm. While it’s important to have some regulations in place to make sure that Microsoft does plays fair, I think right now those regulations are too punitive and restrictive. If we are not careful, we will stifle the innovation of this great company. More balance is called for.

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