Does Microsoft Cause Lower Software Prices? 726
AngusSF writes "OK, slashdotters, , so is this FEE article Antitrust Benefits Consumers? It Just Ain't So! true?" AngusSF quotes from the article: "... as Stan Leibowitz and Steve Margolis have shown in their book, Winners, Losers and Microsoft, in virtually any market that Microsoft has entered (financial software, spreadsheets, etc.), the effect has been a dramatic reduction in prices and an expansion of output and innovation. Software products that do not compete with Microsoft's products fell in price by 12 percent from 1988 to 1995, but by 60 percent where there was competition from Microsoft.", and writes "I'd really like to see some on-line evidence of this. Has Microsoft competition in office suites really cut prices there?"
Must Be True (Score:5, Funny)
Re:Must Be True (Score:3, Funny)
Yeah. True. I download it from the Internets.
Re:Must Be True (Score:3, Funny)
Isn't that what the blue E means? Enternets?
Re:Must Be True (Score:3, Funny)
It's a perfectly cromulent word.
Re:Must Be True (Score:2)
Linux has just taken it to the extreme.
Linux would be even cheaper at $200 an hour (Score:3, Interesting)
There is no virus scanner. We just saved 15 minutes downloading and installing it. Installing XP takes at least half an hour as well, so we're up to $100 plus the cost of XP plus $50 for the initial virus scanner download, plus anything we pay
Re:Linux would be even cheaper at $200 an hour (Score:3, Interesting)
Perhaps $2500 that was in my uncle's internet bill one month will suffice?
Photoshop (Score:5, Funny)
Re:Photoshop (Score:5, Funny)
Software prices vs. quality (Score:3, Interesting)
A free graphics editor (think the GIMP rather than MSPaint) allows/causes the professional quality software to have higher prices. When Photoshop is the only software available, Adobe has to choose between high prices or market penetration, and market penetration usually wins. Do you want 10 sales at $10,000, or 1,000,000 sales at $100? With some of the functionality available for free, Adobe has already lost most of the low end of the mar
Re:Must Be True (Score:4, Insightful)
Then, they use all sorts of aggressive tactics.
Besides, what venture capitalist will fund a startup going up against Microsoft?
I'm not saying it's forever, but in Microsoft's case, the monopoly will erode far slower than a monopoly carmaker's would.
Re:Must Be True (Score:3, Interesting)
Re:Must Be True (Score:5, Insightful)
Not true at all. Microsoft uses (used?) its dominance in one market to force or bias usage of its products in other markets. This is more or less what the antitrust suits are all about. When an 800 lb gorilla like Microsoft tells vendors to only sell their products or they'll stop selling through them the vendor must comply.
An earned monopoly comes from making the best product at a good cost value. Even MS dominance in Windows wasn't driven by it necessarily being the best product, it was because MS made exclusive deals to have their operating systems installed on PCs at the point of sale. Why would a consumer go through the hassle of finding another (better) OS, paying extra for it, removing the MS OS, and installing the new one. MS might have earned it in the "shrewd businessman" kind of "earned", but not in the "best product and value" kind of "earned".
There is another aspect (Score:5, Informative)
When you develop proprietary software, you absorb the entire cost of R&D as well as marketing in advance, and then you sell licenses in order to make that money back, along with a profit margin. The actual boxed sets only cost a few dollars to produce, but the research and development is where the major costs are, and these dwarf the production costs pretty heavily.
So, if you can sell twice as many of something than your competitor, you can actually sell the product at a lower cost than your competitor's break even point. I believe economists call this "economy of scale." You can even do this at the same that you use some of the profits to subsidize research and development of other projects. Whether this is predatory or not I will leave to lawyers and the courts (I suspect the answer is "it depends").
Now, if you are a company which is smaller than MS, you cannot compete with Microsoft on the basis of volume. So Microsoft is able to develop (often better) software faster because they already have achieved scale in these markets. The other companies cannot compete and they slowly sink into obscurity (re: Corel, etc). Some of this may be predatory, and the rest is the fact of the market. So, the result is that you cannot beat Microsoft at their game if you play by their rules. They are bigger and they will *always* win because they can make money on a more marketable product at a lower price than you can.
So, what about competition? Is there no hope? Actually there is. Open source actually is more efficient at spreading the development effort around so that needed features get added with less general expense. Therefore the pace of popular open source projects easily dwarfs Microsoft's, the total cost of ownership is lower, etc. Linux, OpenOffice, Mozilla, etc. actually beat Microsoft at their own game by reinventing the rules (which is what all successful businesses and projects do anyway). So open source will reduce costs even further to the point where Microsoft cannot be profitable and compete.
Re:Must Be True (Score:3, Insightful)
The only way an *unearned* monopoly can exist is through government force.
Depends what you mean by "earned". If you mean is it impossible for a rich, but otherwise clueless company t
Does Microsoft Cause Lower Prices? (Score:5, Insightful)
Are they the cause of cheaper software? Yes, they are.
Re:Does Microsoft Cause Lower Prices? (Score:2)
Re:Does Microsoft Cause Lower Prices? (Score:3, Interesting)
Indeed, "software sucks because users demand it to."
In a market that Microsoft doesn't 0wn, it is a fearsome competitor on price by pumping out crappy software.
However, in a market in which they are the monopoly, they don't stop pumping out the crappy software, but they charge monopoly rents to help fund their entry into the next market. The government is supposed to prevent this, but it seems to be out of antivirus.
Correct. A classic monopolist example (Score:5, Insightful)
Consider an area with many small bakeries. A big company goes in and opens bread shops with lower prices so the small shops have to close.
Good for the consumers? No.
After the small companies close down, because of the lower prices from the big company, the prices are increased to higher than the small companies had before the big company went into the area!!
The profit from the high prices is used to undercut small businesses in the next area the big company takes over...
Now, replace a geographic area with a type of application (spreadsheet, writing, etc).
When Microsoft goes into a new area, they move their investments there. The speed of development in the old area goes down. (But while Msoft takes over an application area -- the speed and development is faster!)
The development speed for new revolutionary features of Internet Explorer or Office isn't high...
When there is competition in an area taken over earlier, lots of developers (paid by the monopoly profits from some other controlled area) are moved back into that place -- until the threat is gone.
So now, with Firefox, there will be development on Internet Explorer.
At any given time, it's better to use the monopolist product -- but in total it's never good for anyone, except for the monopolist.
Re:Correct. A classic monopolist example (Score:3, Informative)
standard oil is a classic example of reduced volitility of oil prices, standards or production, refinement of product, and quality improvement.
Now we know what happened to standard oil, Breakup. There is good chance that it will happen again with MS. But like Standard oil, it will take anyware from 15 to 30 years ( history points that the Cry of Monopolist was already shouted to standard oil by 1885 if not prior to
Re:Correct. A classic monopolist example (Score:3, Insightful)
Perhaps, but your conclusion is wrong.
Consider an area with many small bakeries. A big company goes in and opens bread shops with lower prices so the small shops have to close.
If they cannot compete long term becayue they believe the larger company can sustain the low prices.
Good for the consumers? No.
Sure - they're paying less for bread.
After the small companies close down, because of the lower prices from the big company,
Re:Correct. A classic monopolist example (Score:3, Interesting)
Until the population notices that the bread is of very poor quality like the rest of their mass produced cheap food after which they can only conclude that paying less made them fat.
cheap food = cheap nutrition = expensive & serious health consequences.
Re:Correct. A classic monopolist example (Score:3, Insightful)
Over the short term, but in the long run it costs them more (as mentioned in the example).
"But then new competitors move in, because they can make a profit at the higher price, which forces the monolpolist to lower prices again, and keep them there, to keep out competition."
That may be true for this specific example, but imagine a case where the monopolist bakery sets up a system where you get your bread delivered automatically with the morning paper and the mon
Re:Correct. A classic monopolist example (Score:5, Insightful)
Something people seem to forget is that Microsoft is its own worst enemy. Microsoft isn't enhancing Office 2005 to compete with Open Office.org 2.0. Microsoft is enhancing Office 2005 to compete with Office 2003!
Consider: Microsoft has giant piles of cash, Bill Gates is closer to Scrooge McDuck than any person in history. But what he doesn't have is a steady revenue stream, constantly topping off his vault. He has to constantly create new reasons for people to send him money. Sure, Microsoft has OS sales for new PCs, but Office upgrades? Why would the users upgrade? Office 2003 still works fine. Office XP still works fine. Office 97 still works OK. Office 95 still works, sort of. The "features" that Office 2005 bring to the table are the only reasons people would have to upgrade, and Office 2003 is already a really complete product that most businesses love. Therefore Office 2005 would just be a waste, right?
In order to get you buying Office 2005, they have to make it attractive enough that you'll consider it worth $239 more than Office 2003. And most people won't. Therefore, Microsoft doesn't make as much money.
Microsoft has two choices here to get cash churning again: One, speed up the End-of-Life process -- ditch support for Office 95, 97, and XP soon, and ditch Office 2003 two years after Office 2005 comes out.
The scarier option (that they are busy pursuing) is to turn software into a "rental" or "lease" business. And the only way they can accomplish that is by locking down their users' computers so they can't keep using the same old software: Trusted Computing, here we come! With Trusted Computing, if you don't pay your $9.95 per month for Office, you won't get Office. Sure, that $9.95 per month keeps you in the "newest" Office, whenever they get around to releasing one, but basically it turns Office into a revenue stream. Is $120 per year cheaper than $259 every two years? Depends on if you would ordinarily upgrade the day Office 2007 comes out.
Re:Correct. A classic monopolist example (Score:3, Interesting)
Some boss will buy a new portable that is preloaded with a new version of Windows and Office. Documents won't work that well between the new and earlier versions of Office...
(And, typically, the new portable can't run earlier versions of Windows... or something.)
Re:Correct. A classic monopolist example (Score:5, Interesting)
Consider an area with many small bakeries. A big company goes in and opens bread shops with lower prices so the small shops have to close.
Good for the consumers? No.
If this were true, that would suggest that Walmart is bad for consumers. From many economists' points of view, this is simply not true; Walmart brings and maintains low prices.
The negative effect of Walmart, Microsoft, and other monopolists is that while the prices of goods often go down, the diversity of local vendors dimishes, and the remaining local businesses are mostly no longer owned by local businessmen. Locally owned businesses are driven out of the economy, so the money the local people bring into their local economy goes right back out of the economy through the almost always non-local monopolist.
People who view monopolies as positive don't view the annihilation of successful local economies as negative. This is the common approach in US economics, where the significant measures of an economy are considered to be average wealth, and average global quality of life, rather than median wealth and quality of life.
The bakery example misses an importnant point (Score:3, Insightful)
Re:Correct. A classic monopolist example (Score:5, Insightful)
Now, why would they do that? Because they thought it would be good for their customers? Nope. They simply wanted to kill Netscape before Netscape had a chance to kill Windows.
Netscape was on the virge of having a full blown, cross platform Client/Server based web solution. Using Java, you'd be able to accomplish pretty much anything that you could do with Windows, in a cross platform manner. Microsoft killed Netscape as fast as it possibly could to protect their Windows monopoly.
I believe that this is what you meant by "Being a dick and using illegal monopoly power".
But my mom always told me that everything happens for a reason. Apparently that reason is so that we don't have to pay anything for a web browser, and we get entertained while Microsoft gets their asses handed to them by Firefox.
Otherwise, we'd still be using Netscape for $30 to $50 a pop.
All's well that ends well, I guess.
Re:Correct. A classic monopolist example (Score:3, Insightful)
Er... if I recall, AOL bought Netscape for $4.2 BILLION. This was a company that didn't exist a couple of years before. No company that went from zero to $4+ billion in value can be said to have been "killed." AOL let them die is more like it.
Netscape was on the virge of having a full blown, cross platform Client/Server based web solution.
If PR was product, you'd be right, but they were pretty far from actually deliv
Re:Correct. A classic monopolist example (Score:3, Insightful)
The only reason to give away IE was to kill Netscape, because it might have been competition. Standard monopolist tactics to "remove the oxygen supply".
(How the hell was that modded up??)
Re:Correct. A classic monopolist example (Score:3, Informative)
Firms can undercut existing prices to quickly capture market shares or firms can compete at a completely different price based on features and product offerings.
I've argued that competition that lowers people's cost of entry onto the internet as being a good thing. I LIKE HOW WEB-BROWSERS ARE FREE. So
Re:Correct. A classic monopolist example (Score:3, Informative)
There were free web browsers '97. Mosaic, etc.
Consumers usually didn't pay for Netscape in practice (I think it was free for academic institutions). If my memory serves, corporations paid to get support.
Hence, I seriously doubt this was "huge" enough to ignore criminal monopolists killing competition.
(OK, duh, monopolies only undercut competition when they need to do it to kill 'em off.)
Re:Does Microsoft Cause Lower Prices? (Score:3, Interesting)
The problem with software is that it can be copied for very little cost, so there is no incentive to pay for a cheaper alternative to the software you want, since you can almost always obtain an unlicensed copy for virtually free.
Thus there is very little competition in the software market in the conventional sense.
How many people do you know who run illegitimiate copies of Windows and Office? I've seen it happen countless times, when despite my offer [slashdot.org]
Re:Does Microsoft Cause Lower Prices? (Score:5, Insightful)
AutoCAD
Desktop Publishing
Graphics Design
Quark, MacroMedia, Adobe, these guys are still selling program for $700
If you're not an architect or an engineer, why would you want Autocad at any price? If you are, $700 is peanuts for the tools of the trade. As for DTP, MS does make Publisher, very cheap, (but anyone professional will sneer at it) and is making a new photo editing app, not for professional publishing but for home use. But there is already a huge variety of photo editng apps, including from Adobe who've provided cut down versions of PS (PS Elements, PhotoDeluxe) that sell cheap and are often bundled with scanners or cameras. Corel has very cheap and very powerful photoediting and layout apps (I use their Ventura for laying out books). Paintshop Pro is cheap and has a strong following.
correlational! (Score:5, Insightful)
this relationship looks correlational rather than causal. as the market for a certain type of home software expands, the price goes down. the same market force also attracts microsoft. both are the result of a common cause: the market.
Re:correlational! (Score:5, Insightful)
Microsoft is a classic monopolist, and shows the symptoms: significantly higher profits than other software industry businesses, over many years. If MSoft's products were in competitive sectors, its profits would be more in line with the rest of the industry, as competition would lower prices (basic Econ 101). Instead, it reaps returns far above average.
Just read a few of the other articles on that site -- these people are polemicists, not economists. And not very good ones, either; their arguments have many logical holes. Lots of vigorous arm-waving, no rigor. It's probably some Republican-funded policy paper mill, clearly not an academic think tank. /ignore
Re:correlational! (Score:5, Informative)
Oddly enough... (Score:5, Funny)
Oddly enough... [openoffice.org] the price dropped 100% in the office suites arena.
Re:Oddly enough... (Score:2)
OppenOffice is also a very nice to use office tool, even if you are very used to ms office.I was pleasantly surprised at how easy it is to migraate from ms office to OpenOffice.
Nope (Score:3, Insightful)
Of course this is true (Score:2, Redundant)
Re:Of course this is true (Score:3, Informative)
Re:Of course this is true (Score:5, Insightful)
If the prices go up, then it becomes reasonable for another competitor to enter the market again, restoring competition. Microsoft isn't the only company with a war chest.
Driving your competition out of the marketplace isn't a PERMANENT condition - if it took below-cost prices to take over the market, it'll take below-market prices to keep control of the market.
Prices will go up not because competition got eliminated, but because you can't maintain those prices forever. The consumer benefits as long as manufacturers try though.
Re:Of course this is true (Score:2)
There are, of course, other factors. If Microsoft sets the "standard", then it doesn't matter if a competitor is better if it does not fully comply with Microsoft's "standard".
And, of course, Microsoft has lots of strings to pull to reduce the ability to comply with that "standard".
Umm, no. (Score:3, Insightful)
No-one can or will re-enter the market because at that point you can just lower your prices again. As it actually takes investment to enter a market, the immediate undercutting by you will blow them out of the water.
Re:Umm, no. (Score:4, Interesting)
5. Keep prices high enough for long enough to cover the cost of steps #2 and #3.
Because, you see, once you've done step #4, you give competitors a reason to enter the market. Then you have to go back to steps #2 and #3 again, further pushing into the future the completion of step #5, which is the only one which can justify all the other steps.
Show me an example of all five steps happening, and I'll believe your assertion that this is actually a problem.
-russ
Re:Of course this is true (Score:4, Interesting)
You're forgetting lock-in. Once a company has a monopoly, it can set it's own standards and doesn't have to worry about interoperability with other people's software, and can use it's own position to make interoperability with itself as hard as possible.
Take microsoft office for example; competitors not only have to be free (or at least much cheaper) to even get into the market at all, they have to work with non-standard undocumented office files.
IE is another; look at how many sites only render properly in IE because people have coded to it's broken implementation of CSS and java, rather than go the extra mile to code to standards AND IE's cackhanded version of them.
Hell, look how microsoft is using it's desktop monopoly to push windows media player and it's DRM codecs. Only a couple of a days I had a student who lost all his recorded wma files because he didn't realise DRM was on by default, and now his backups are worthless because he didn't backup the licence files too. By making windows media codecs the default for all windows users, they're starting to push out the competition.
Assuming they succeed, there's nothing to stop them sticking to form and making longhorn only able to work with Windows Media drm formats, thus forcing you to stick to windows (and its media player) if you want to access your own music or home videos, or listen to internet radio, or watch internet films.
Lock-in lets monopolies keep their position without lowering prices, or innovating, or improving quality.
And before someone says it, no, IE and WMP are not free. You just pay it as part of the tax when you buy a new PC that's very hard to get without windows (and it's only the courts that have made even that possible, given microsoft used to use OEM agreements to make every computer ship with windows.)
I also disagree that microsoft has lowered prices. Last I heard, microsoft made 80%+ profit on windows. Windows 95 cost £39. Windows XP Pro costs £151. And the CAL costs... wow, they've gone up a lot. 5 years ago, I paid £5 a seat for NT licences. Now, at a school, we're expected to pay £30 a seat. I don't think inflation is that bad.
Re:Of course this is true (Score:3, Insightful)
The word-processor market should be competition-friendly given the price of word, but it's not, given the lock-in achieved by the
Once you have a monopoly you can keep competition out using 'dirty tricks'. That's why monopolies are bad for consumers (after all, competition is suppsoed to be the cure-all for consumer satisfaction in capitalism), and that's why there are laws to curb monopolies.
Re:Of course this is true (Score:2)
Hmm, there is something more devious going on here (Score:4, Interesting)
Microsoft enters a market and calculates a sweet price, a price where people will buy the product. Then it keeps that price and increases to cover inflation. Is there anything wrong with this? Absolutely! The problem is that Microsoft does not lower their prices after that.
In a normal market prices drop once new versions enter the market, etc, etc. Take a look at computers, cars, houses (not the properties, but building materials) and prices do drop.
Where prices do not drop is in controlled markets, like what Microsoft has, and what the music or film industry has. Also want to see another thing about these markets? There are some who make damm big bucks and tons of people who are just eecking out a living.
How do you change this? Consumers have the power to choose and they should use Open Source, buy "B rated" DVD's, and buy directly from unknown artists.
Re:Hmm, there is something more devious going on h (Score:3, Insightful)
Show me an American consumer with a sense of discipline and self-reliance, and I'll show you a much freer market.
One nit-pick (Score:3, Insightful)
Re:One nit-pick (Score:2)
But I think you got it exactly right.
We can evangelize all we want, but the average person wants what is "safe". Of course, "safe" is defined as "what everyone else is using", not in terms of security.
Re:One nit-pick (Score:3, Insightful)
Nevertheless, the price is still lower in real terms than it was before. In 1985, Wordperfect for DOS was selling for $450, which is around $790 when adjusted for inflation to today's dollars. Even if I go out and buy the full retail version of Office Professional 2003, it'll cost me $499 or so, or almost $300 less in real terms than WP cost back in 1985. And in return for
Re:One nit-pick (Score:4, Interesting)
The question is not whether prices have dropped, but whether they are artificially high. In other words, has Microsoft's monopoly position kept prices from dropping compared to what they would be if those prices were determined solely by supply and demand? There is no way of knowing for certain, but I would be willing to bet the answer is yes.
As an aside, Corel et al. aren't competing with a $499 product; they're competing with a product that is sold at its list price, sold at vast discounts, and widely pirated (e.g., free). It would make an interesting study, but my guess is that the prices of Microsoft's competitors are probably somewhere near the true market price given the wide range of the actual cost for Microsoft products.
Re:One nit-pick (Score:3, Informative)
Actually it is open source that does it. (Score:5, Insightful)
When you look at it you will see MS enters markets that already exist. They pick and choose and go in when things are getting popular
The thing this article misses is that also when things get popular open source people come in too and write their own versions for free. And they do it better than propriterary software usually.
Which is the real thing that drives prices down.
High margins and high profits only exist in really tiny niche markets that dont have many competitors.
Microsoft is just entering markets that also other competitors such as open source teams are entering and thus it is not just microsoft who is making prices lower. Somebody has not thought this through properly.
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Re:Actually it is open source that does it. (Score:5, Insightful)
Things like Firefox and Gaim are pretty well-done, but they aren't replacements for commercial software; they are replacements for shitty free software like Internet Explorer and AIM.
Re:Actually it is open source that does it. (Score:3, Insightful)
OpenOffice is nice and all, but it's just as bloated as Microsoft Office, and it's got the same nightmarish, crappy user interface. OpenOffice is too busy trying to imitate Microsoft Office.
So basically you're saying: OpenOffice doesn't compete with MS Office because it generally is the same (with the same disadvantages) and is cheaper? I don't think your logics teacher will be too impressed.
Re:Actually it is open source that does it. (Score:3, Insightful)
Re:Actually it is open source that does it. (Score:3, Interesting)
You do realise the GUI wasn't groundbreaking? Apple took two attempts before they got a winner. They'd based several of their ideas on research papers written by Raskin, pioneering work by Engelbart in the 60s, ideas taken from Smalltalk, etc. It was all incremental improvement.
Xerox PARC is often credited as the "source" that inspired Apple (though Raskin denies even that much) but PARC didn't innovate either. They integrated a bunch of exi
Wow, a MS story I agree with (Score:2)
That's not to say there is no compertition without MS, but everybody knows they're targeting the lower end of the market and that they'll fight dirty--being happy to lose money on a product for a few years. So it is really no surp
Wal-Mart causes lower prices, too (Score:3, Insightful)
monopolistic trends (Score:5, Informative)
This is absolutely true (to a point...) (Score:5, Interesting)
While MS has competition within a market (Word Processing comes to mind) their prices are very low. I recall Word selling for $99 back when it was competing with WordPerfect. Today, with essentially zero competition, it's $299.
Of course the counter-argument is Excel vs Borland's Quattro Pro: Excel was at $495 and QPro at $295, but despite great QPro reviews vs Excel purchasers thought QPro was not in Excel's league because it was too cheap!
Yeppers... (Score:4, Interesting)
Microsoft products are "good enough" and "cheap". When MS enters a given market, their products are never as good as what is out there, but they are cheap. Some example:
- DOS 1.0 was both significnatly worse and cheaper then CP/M
- Word v. Wordperfect, AmiPro, Wordstar... just about everything
- Excell v. 123, Quatro
- Windows 3.11 (for workgroups), NT 3.5, Windows 95 v. Netware, Banyan
- IIS v. *NIX w/Apache, BIND, etc
- Exchange v. Groupwise
- MS-SQL v DB2, Oracle, (flat text files)
- IE v Netscape
- Hyperterminal v everything else
This is not to say that these MS products have not since passed the quality of their competition, some have. Of course, in many of these cases it is because MS has driven the competition out of business compleatly.A recent review of OOo, the author made the comment "OOo will out Microsoft Microsoft". Compared to MS-Office, OOo isnt very good. But its good enough. And its a hell of a lot cheaper. Thus OOo will out Microsoft, Microsoft. The same is true to some degree with other projects like Samba.
So in response to the articles question: Duh. Thats what Microsoft does. They sell good enough crap for less, forcing companies who produce good stuff to reduce their prices, reduce their marketshare, or die.
Re:This is absolutely true (to a point...) (Score:3, Interesting)
The MSRP of Microsoft Word 2003 is $229. Your number is off by more than 20%. It is trivial to find the standalone application available for a cost drastically lower than MSRP.
In 1986, Wordperfect 4.2 sold for $500. Microsoft Office (which had 3 applications at the time) came out at cost slightly less than that. Today the MSRP of Microsoft Office Standard Edition (
Yes it has. (Score:2)
Re:Yes it has. (Score:3, Interesting)
BTW. Wordstar was $295, Word [cdw.com] is $217. The 10% rule would put it at $30 (which would be reasonable), tripleing that would put it at $90 (Word is powerfull). Microsoft prices it at $217.
A computer that is THOUSANDS of times more powerful costs 1/20th what it did then. The leading wordprocess
Games Anyone? (Score:2)
(I'm just kidding, before any Halo lovers start a flame war).
Re:Games Anyone? (Score:2)
Microsoft doesn't come close to dominating the video game industry. I mean, people want variety, and if there was only one company that made video games, it would be pretty boring. It's not like a video game is something like Excel, where people want standard file formats and don't care if the program changes year to year. With games, y
I can see how this is true. (Score:2)
What innovation is that? (Score:5, Insightful)
As to the pricing thing, well. Where I lived in England (really England, not meaning "any part of Britain"), Stagecoach (a bus company) rolled into town and set their prices at zero until all the other bus companies went out of business. Then they stuck their prices up to something slightly less than the old prices.
Sure, prices were lower but in getting there all competition had been destroyed and Stagecoach is no longer (especially since they got control of the trains too) under any pressure to ensure quality. So they don't.
It's the same with Microsoft: after they crap all over a market to kill all the competition they simply sit around and look for new ways to screw the trapped clients. Sure, the prices are lower, but quality is non-existant and customer service is some sort of joke.
IE is a good example: until Firefox came along it had basically been left to rot. It still doesn't actually manage CSS level 1 or 2 to anything like a decent level, or display PNGs correctly. Sure, browers are bloody cheap (free) but if you'd been waiting for MS to innovate you'd have been dead and buried before it happened.
TWW
Re:What innovation is that? (Score:3, Interesting)
Uh, you do realize that most of the railroad baron's fortunes were built on government contracts and government subsidies, don't you? If the government had "done nothing" there wouldn't have been any railroad barons.
Post hoc ergo propter hoc ? (Score:2)
Post Hoc Ergo Propter Hoc (Score:2)
Maybe Microsoft only markets software products whose prices are bound to drop?
Maybe it's just coincidence?
Re:Post Hoc Ergo Propter Hoc (Score:2)
What about brand recognition? (Score:2)
Does this naturally translate to a consumer benefit?
I don't think so.
One major problem, methinks, is that Microsoft has complete Brand Recognition. For some folks, having Microsoft on the box means instant compatibility with everything else that is Windows and, furthermore, instant compatibilty with THEIR computer. Sheesh! For some, Microsoft means "PC."
Microsoft's
Let's Examine The Logic Here (Score:2)
Somebody comes into your little town, kills the only decent auto mechanic and takes over the business, charging insane prices for utterly incompetent work.
Everybody else in town becomes a "home auto mechanic" to cope. A couple gas station owners start charging to fix cars.
This is a "benefit" of monopoly?
Well, yeah, the fact of the matter is that a monopoly can't exist without government coercion. Because a monopoly by definition means excessive profits, which causes competitors (including producers of ot
True... BUT (Score:3, Insightful)
BUT... price isn't everything. Instead of having 3, 4, 5, or more products all competing against themselves and one-upping eachother for $60 each, you now have 2 products, at $50 each. Which is better?
Now certanly $50 is easier on your wallet. But what about the OTHER effects? MS products tend to rapidly get better untill they are better than everyone else and therefor "good enough". Then then stagnate. They stagnate like time stopped. So you have one product that's good enough, and another that will try to get better. But once that other product gets better, it will reach a point where it's better than MS's. Then what? Well since by now they probably have a much smaller market share, MS can sit by comfortably. Thus the second company doesn't have to work too hard because their product is already the superior. They can keep trying to make it MORE superior, but it probably won't change things. Firefox changed IE (a little), but that took HOW LONG? Things stagnated since IE 4 or 5 (and IE still has serious problems). And other than adding a popup blocker (which does work) and more warning dialogs (which never work), IE is the same. Consumers lost. Hopefully Firefox will get accepted enough for the cycle to repeat.
What about other products. How 'bout financial software. You have Quicken and Money for the home. That's it. Money works but I find a large number of annoyances in it (it's what I use). Quicken works, but I don't like it's interface at all (Money's is nicer IMHO). So I'm stuck choosing between the two. There is no third party to force them to improve against eachother, they are are usually considdered about the same quality (from ratings I remember seeing). No one will enter this market because it already has 2 juggernauts and they'll never get in (open source excepted). This isn't very good for the consumer.
Unless you use a Mac. If you use a Mac, MS doesn't MAKE Money for Mac. So you can choose between Quicken and... Quicken. What a buffet of options. Fantastic. The situation on the Mac is even worse (from what I know, there may be some other piece of software out there, but from my perspective (a rather highly educated consumer when it comes to computers) there are two options). And the Mac is considdered a small market with a monopoly product (Quicken) so no one will enter that market and provide competition. You just have to hope improves from Windows move over. And even if someone DOES enter the market, MS can always walk in and sell Money if they see you doing good, and you're gone. Quicken can survive, you little product probably won't.
I'll take $10 to $20 more and a better selection and more improvements from healthy competition over the cheaper stagnate price.
If that's all it takes to make things "better" for the consumer, lets have the Government make everything and sell one brand and price it 5% less than the old commercial products were. There will never be improvements, and quality will probably suffer without competition, but IT COSTS LESS!
Prices are better, quality isn't. And I contend that prices are better only through last ditch efforts to stay alive. If they little guys go out of business after MS enters a market and MS is left the only game in town with over 5% market share, they are free to never cut prices again or even raise them. Do you think Windows would cost $200-$300 per PC if MS had competition?
Bad premise (Score:4, Interesting)
Explanation: Microsoft discovered the popular application markets. So did a lot of other companies, quite independantly. There would have been price competition between everyone else, even had MS not entered those markets. The markets in which MS did not invest money aren't as lucrative (being more niche markets). There are fewer players in side markets, and as a result there hasn't been as much competition in those areas of software development.
Lesson: correlation != causation. If you're claiming causation, you better have damn good evidence. Would there not have been drastic price reductions in the spreadsheet market without Excel? Put it another way, what would the market look like without MS ever being involved? I have no reason to believe it would look any different than it does now.
Mark the article (-1, Troll).
Office suites (Score:2)
But there's the catch. I don't think the market for office suites is a really good example, because it's one area where Microsoft's products really did get out into the market and kick ass. The
Manipulation at its best. (Score:2)
Recap: forgot html tags there (Score:2)
- Enter Market
- Make loses on low priced products
- Kill competition because They cannot afford in long term to keep in business at current price.
- When Competition is killed stop development while instauring barriers.
- Stop development
- Profit repays "investement" of market dumping.
- Pure Profit.
Happened to Netscape, Happened to Word Perfect, tried with WMP, tried with XBoX. This is just typical figure manipulation.
Basis of capitalism (Score:2)
Microsoft enters a market, so there is more competition so the prices drops.
The question is do the prices continue to drop once they have monopolised a market?
If yes then you can say it it MS causing the price drop, if not then it is the principle of competition that does it.
Consumer-market prices usually fall dramatically (Score:2)
The only way Micr
Evolutionarily, yes (Score:2)
Irrational (Score:2)
I got your price reductions right here... (Score:2)
Yeah, in everybody else's software! MS Office Pro has become the most expensive component of a new PC, more expensive than the CPU, the display, or the hard drive. Granted, if you amortize that cost over an expected three year lifespan, $599 isn't so bad ($200/year, essentially, which is less than what you'll pay for electricity for the PC during that time period) but it's still damne
Competition = Lower Prices, Duh! (Score:2)
This is not just exclusive to Microsoft. It happens whenever a new company enters a market and starts getting business from existing companies.
The same can be said about Linux entering the OS market. Microsoft is not only marketing around Linux [microsoft.com] but they are also putting lower cost [microsoft.com] alternatives [microsoft.com] on the market. No real news here, competition is good for consumers except when it is monopolistic behavior [microsoft.com]
Volume (Score:2)
its not just microsoft .. (Score:2, Insightful)
to say its 'microsofts fault, specifically', is to say that "computers are as good as they are because IBM made computers".
I fired Microsoft this weekend... (Score:3, Interesting)
Temporary fall in prices (Score:3, Interesting)
1) Software companies drop their prices on products competing with MS products.
2) MS then drops its prices to a point where the company cannot compete. They don't care if they take a loss because other business sustains them while they're strangling the competition. (In the case of Internet Explorer when competing with Netscape they dropped their price to zero)
3) The competing company typically diversifies as it needs other sources of income. It's often difficult to do this successfully, but if the company does it may even pull out of the competition all together
4) Microsoft either buys out the competitor, or continues to sell at a low price until the competitor is no longer in the market.
5) Once Microsoft has dominated the market, prices go up. Have a look at the price of MS Office since it has dominated.
It's a proven business strategy. Unfortunately it kills competition and therefore innovation. It makes no sense to keep prices low if you've effectively cornered the market either.
MPEG LA was protesting Microsoft's low prices. (Score:5, Interesting)
Microsoft undercut MPEG-4 consortium's prices by offering licensing charges of 10 cents per encoder for its codec.
The MPEG-4 gropup charges 25 cents.
This led to protests from the MPEG-4 group including attempts to belittle Microsoft's codec in the press.
OK, Here is how it works-- (Score:4, Insightful)
2) Microsoft ignores it while it is a 'fad', so the original company can more or less charge what they want.
3) The 'fad' becomes a trend, and Microsoft gets interested.
4) Using their overwhelming resources, Microsoft develops a competing product, at a much lower price. (This is in lieu of getting the technology by 'other' methods).
5) The original company laughs it off, since any Microsoft product version 1.x or 2.x is not really competitive, and sometimes horrible.
6) Over time, the Microsoft product gains technological and marketing credibility.
7) The original company tries to hold on, but the lower prices of the Microsoft product (plus the creeping featuritis of the Microsoft product) eventually lead to the companies demise.
8) The original company gives up, and releases all of their people. Naturally, Microsoft swoops in to skim off the cream of that crop.
9) Microsoft now owns 100% of the market.
10) Microsoft freezes development on the product and starts looking for another victim company to screw.
11) Rinse, lather, repeat.
Shoddy Journalism (Score:5, Insightful)
This article seems like one of the worse excuses for journalism I've seen in some time. The author writes:
Competitors will always whine and cry about how the price-cutting, product-improving, and customer-satisfying practices of their more successful rivals are "unfair." This in fact is the modus operandi of antitrust: The antitrust laws provide a means by which sour-grapes competitors can achieve through politics what they fail to achieve in the marketplace.
This is a dreadfully dishonest characterization of anti-trust laws. Microsoft wasn't accused of success through fair competition. They were accused of a series of dirty tricks that have nothing to do with competing on a level playing field. These tricks include giving their customers discounts if those customers would design their own web sites so that non-MS browsers wouldn't work with them, and pushing PC makers into deals where they had to pay for MS licences, even for machines that were to be loaded with non-MS operating systems.
Neither economists nor politicians nor policy wonks are capable of deciding the most "efficient" size or configuration of any business enterprise. As Ludwig von Mises once explained, "The question to be decided is: Who should determine the size of the enterprises, the consumers by their striving to buy what suits them best or the politicians who know only how to tax away and to spend?"
This is a strawman argument. Anti-trust laws aren't designed to limit the size or market share of companies; The are designed to limit companies from using monopolies or near-monopolies unfairly to exclude competition. As such, they are only targetted at companies that actually have monopolies or near monopolies. But I supposed it's easier for the unscrupulous to simply make up non-sense positions for their adversaries and to claim that their adversaries hold those non-sense positions than it is to argue against the positions their adversaries actually take.
By adhering to this false "maxim" antitrust regulators are attempting to supersede the informed judgment of millions of consumers
Even if we assume, for the sake of argument, that most consumers are informed enough to exercise informed judgement, those consumers can only use there judgement to decide among the choices they actually have. If I offer an OS at the same price as MS's and if customers can choose which one to purchase, customers can make a simple judgement about the qualities of the OSs. But if MS has strong-armed vendors into making my customers pay for MS-Windows in addition to my OS for any machine they buy, even if my OS is the only one loaded, then the consumer's choice isn't just about OS qualities, anymore.
Third, the government is clearly unconcerned about consumer welfare in its prosecution of Microsoft: In Judge Thomas Penfield Jackson's November 1999 "Statement of Fact" he devoted a mere five out of 412 paragraphs to the issue of consumer welfare.
This is just plain stupid. The point of Judge Jackson's "Findings of Fact" document was to describe the facts of the case, and not to concentrate on the social consequences of the facts. And in any case, the proper focus of a Judge is on the law and on the facts of a case. The author of this article is either showing his ignorance or his dishonesty.
He rests his case on the lame notion that, in his opinion, the company's management had "anticompetitive motives." Economic analysis may not be Mr. Litan's strong point, but mind-reading apparently is. He claims that such a malevolent "intent" has harmed Microsoft's competitor Netscape by keeping it from competing in the Web browser market. In fact, Netscape has distributed more than 150 million copies of its browser since 1995.
The author completely misses the point, and we are left to wonder if he did more than skim the "Findings of Fact" document. MS used the browse
Let the Monopoly Grow! (Score:5, Informative)
If the trend is true, then the days of spending anywhere from 4 to 80 THOUSAND dollars for a ONE seat license on these specialty softwares would end.
You think the MS monopoly is bad? you pay nothing compared to what Autodesk, ESRI, and others charge.
Re:Microsoft = Walmart (Score:3, Insightful)
Or even a free [openoffice.org] one.
Re:Of Course the do (Score:2, Insightful)
But what large organization doesn't? You just explained Walmart's strategy too.