Thirty three years back, Bill Gates and his friend Paul Allen decided to partner together and put up a business which is now known as it Microsoft. They came up with the idea of such business in expectation of coming opportunities, that being software being very much in demand as computers evolve to become common household possessions. The partners’ dreams came true, but Microsoft’s endeavors to take the market by storm have resulted to the organization being in a decisive phase that will affect its future to a great extent. Moriati related that the Federal trade Commission (FTC) set its sights on Microsoft in 1990 for probably conniving with IBM to take over the market for software and when the latter was taken away from the picture a year later, all the attention landed on Microsoft’s doorsteps (52). In April 2000, it was decided by the court that the business leader was without a doubt a monopoly, and that its packaging of Internet Explorer with its operating system was infringement of laws governing antitrust.
Is Microsoft Really Using its Dominant Position to Exercise Monopoly?
There are several points that could be made which will indicate the fact of the matter. Primarily, the business’ market share for personal computer operating systems that are compatible with Intel is tremendously huge and unwavering. The “applications barrier to entry”, which leads to operating systems such as Apple or Linux being far less desirable since a lot less applications are produced to work on said operating systems, protects that market share of Microsoft. Clearly, this can be classified as network effects. Next, said market share is likewise firmly sheltered by a lofty barrier to industry entry that hinders a hopeful new competitor into the pertinent market from taking away a considerable amount of clients from the business, even if the global leader charged its goods considerably higher than competitive prices for a considerable time period.
Further, the organization’s clients do not have a commercially practicable substitute for Windows. This is for the most part an outcome of that barrier to entry, so it still fits in the big picture. Annually for the last ten years, the company’s market share for personal computer operating systems that are compatible with Intel has gained more than ninety percent of the total market share. Furthermore, Microsoft is dominant in a downstream market for group servers, or programs that allow sharing of printers among office staff or security on a local network, which is another network effects in action. Also, because Microsoft held a prevailing spot in the market of operating systems and packaged its Windows operating system with other applications, customers were not afforded a choice regarding acquisition of the bundled product without the core product.
The key issues through all of these episodes have not changed – is Microsoft using its leading edge in the market of operating systems software to monopolize emerging, related technologies in areas such as browsers for the Internet, personal finance applications software and other products? These concerns have been extended and given weight by the filing of a federal antitrust suit against Microsoft in 1998, to which the courts decided that Microsoft exploited its leading edge through putting weight its near monopoly market position for personal computer operating systems on top of the group server operating systems market. Microsoft contended the allegations by stating that it achieved its success through product innovation and lawful business practices.
A Comparison to Apple and Linux
Linux, an operating system that is stable and dependable, has faced up to the pervasive utilization of the Windows operating system through having its source code available at no cost and easy to get to. Anyone can download the source code through the Web or purchase it on an inexpensive disk. People can utilize their hardware to the fullest with Linux since its programs do not hog on system resources, and be guaranteed of a smaller number of crashes; even its protection is superior compared to the more popular choices (Microsoft). Further, users will be surprised at how fast their hardware can work for them, due to quick processing of requests. It also functions as both server and workstation, while supporting multiple users at the same time. As for the Apple operating system, it supports Mac OS X as an integrated solution on Apple hardware. Mac OS X runs the Apache web server, which is the most widely used web server on the Internet. This operating system was based on a combination of all previous Apple operating system efforts, and the result is a stable operating system for PowerPC platforms with all of the advantages of Unix and a beautiful Apple-designed interface.
Unfortunately, although Linux is a free and highly stable operating system and Apple Computer started the PC industry and its Macintosh system is still considered to be the best PC operating system, they are still on the losing end of a technological lock-in process that is increasingly favoring IBM-compatible PCs equipped with Microsoft Window’s software. Many excellent Apple and Linux applications have disappeared or not gained enough market share due to a lack of solid marketing. Microsoft has well understood the value of solid marketing, perhaps better than any company to date. This is the primary reason why the company has been so successful.
Microsoft has produced a number of hit applications, but its strength lies mainly in its ability to convince (and, sadly, coerce) everyone that its software is the finest on the planet, regardless of quality. Additionally, people have a tendency to buy the operating system because everyone else is using it (which means that the accelerating growth of the Microsoft operating system causes a contraction in the market share for the Apple and Linux operating systems). This innate propensity, plus the comparatively less media mileage that Linux has and the significantly more expensive Apple is offering for their products, does not diminish the business’ monopoly a bit.
WORK CITED (1)
Moriati, Patrick. Antitrust Policy Issues. New York: Nova Science Publishers, Inc., 2006.