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Will The DOJ Split Microsoft In Three?
cbull writes: "Yahoo! has an article that indicates the judge in the Microsoft case thinks splitting Microsoft into three companies is attractive to him. This is based on a friend-of-the-court brief filed by the
Computer and Communications Industry Association and Software and Information Industry Association."
And mfinke wrote: "Just saw the CNN article here about Judge Jackson's ruling that DOJ's proposal to split the company will still be considered when he rules. " Finally, mizhi pointed out this ZDNet coverage of the proceedings, saying "Basically, the government says that instead of splitting Microsoft into an operating system company and applications company, it should also split it into a third independent company for Internet Explorer."
Oh. Wait. That's what we've got already and are trying to get rid of. My bad.
So why hasn't anyone suggested tossing them into Mount Doom? :-)
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Each of those Baby Bills would certainly be able to compete WITH EACH OTHER. However, Corel Office would still not be able to compete with any office suite that was written by the same company that wrote the closed-source OS. This is the real problem, IMHO. If you split the company horizontally, then MS#1-office would still always be the best office suite for MS#1-windows, and so on with the other two (reasons below). You would have 3 companies each doing the same thing that one company is now.
I really don't think that this would solve the problem at all. If MS#3 decided to write their own antivirus software (which sends me into gales of laughter...), then eventually that would become the most widely-used antivirus software on MS#3-windows. Why? Because it would run faster (since they know all those secret APIs), know the OS inside+out from the start, and, most importantly, MS#3 could offer it bundled with MS#3-windows. If someone already has a product which is adequate, why go out and buy (or even download for free) another?
No, I am still firmly of the opinion that MS must be split into OS + Apps companies in order for true competition to begin.
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The alternatives that he mentions would also benefit non-free software. If you look at them (publishing interfaces, preventing MS from using patents offensively, making hardware certifications "open") they aren't really geared toward free software specifically. They are geared toward free development and competition. RMS' desired remedies don't say anything about how MS competitors license their software; the remedies simply allow competitors to exist (freely and independantly). I guess RMS has faith that this would lead to some free software (and he's probably right).
Actually, it is. It's just that there's two parties who want freedom. RMS wants to protect the freedom of users, and in order to get that, the users' agents (developers) must be free to do whatever is necessary. DoJ's motivation is a bit more abstract: to protect freedom in the market, ostensibly to benefit consumers. The two motivations are a bit different, but they're compatable. And if the judge "realizes" that you can't have a free market without developers having certain freedoms, then RMS will get his way.
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from using its unique position to leverage its monopolies, not to sate
our vindictiveness. Separating the OS from the applications
accomplishes this goal.
Remember being a monopoly is not the harm that antitrust law sets
out to correct. It is using that monopoly power in restraint of
competition. I'm in favour of the original DOJ submission (split MS
in two). I think the more drastic remedies would hurt current MS
consumers.
To a large degree, what DOJ and the states are doing here is slamming the barn door shut with authority years after the horse disappeared over the horizon. Trying to fix the existing desktop OS/apps monopoly is a low return deal. Preventing MS from extending its monopoly into the server space is possible, but only if the correct remedy is employed, as MS is now using its desktop monopoly to achieve monopoly on the server side as well.
Don't believe me? Have a look at the number of attractive features in Windows 2000 that don't work unless you also have Windows 2000 servers. This matters! As much as the crowd here likes to bash MS, Win2K is a pretty damn good OS, and the things it offers when deployed on both servers and desktops are things like TCO that companies care about right now. (And, sadly, the things I see the Linux community ignoring...) As a practical matter, deploying W2K on the desktop demands its deployment on the servers as well, or there's no point in migrating. (As one industry pundit has noted, the ugly secret of W2K is that its great so long as you don't mind replacing all of your software and hardware.)
Microsoft is using its desktop monopoly to deadly effect to ensure that it controls the servers too - all the way up to the datacenter, through Active Directory, Intellimirror, Terminal Server, and the bundling of dozens of apps that are "just good enough" to prevent "competitors" from making a living selling them. (Go do the math - there is a very long list of products displaced by Win2K, many of which provide functions not commonly part of any OS distribution today.)
Until and unless Microsoft is prevented from using its desktop monopoly to drive a server monopoly, nothing the government does will have the slightest effect.
Note that splitting Microsoft in *either* of the ways proposed does not eliminate this problem. Since this is driven primarily by the OS monopoly, any split that allows the OS company to operate across desktop and server platforms is ineffective, as are the "baby Bill" scanarios like Ellison's in which Microsoft is split vertically (not horizontally as a poster says elsewhere) into three or so companies containing all of MS's assets. Any effective remedy must prevent MS from using is desktop monopoly to force customers into giving it a server monopoly as well.
This may be the only aspect of a structural remedy that matters, but it looks like it's not going to happen, and Microsoft will laugh all the way to the bank again...
(Note: these comments are mine and may or may not represent my employers' views.)
"The future's good and the present is nothing to sneeze at." - Roblimo's last
Microsoft will do.
Yep, I've been waiting a long time for this one! tcd004
I still think that Larry Ellison had the best idea, which was to split Microsoft horizontally, in effect creating 3 mini-microsofts, each selling windows, office, developers tools, etc... That way there'd be real competition in the Windows arena, and with multiple suppliers, no one could strong arm the customers around because they could just take their business elsewhere. It'd also require a minimal amount of oversight, as opposed to now where it seems that once Microsoft is split up, all the decisions made by the individual companies are likely to face governmental scrutiny ("hmmm... should this program be allowed to be distributed with the operating system?").
Not only that, but it seems (in my eyes) that the DOJ is making unreasonable demands on the conduct of Microsoft once it is broken up... Just for starters, requiring them to notify all affected developers if they intend to change the OS in such a way that their programs will break... It just seems unworkable, because there are slews of compilers and programing languages, each with their own nuances, so that Microsoft will have to test too many 3rd party apps to be assured of compatiability. I know what the DOJ is trying to accomplish with that demand, but again, I think it would be better solved with a horizontal split, because then the companies would be forced to compete and gain customers and therefore wouldn't make any wholesale changes to the OS just to break a competitors product, because all the users of that product could switch to Microsoft #2's Windows operating system.
The third company should have more then just internet explorer. How is that one going to survive with just IE? After all shipping IE for free is what started this, if they up the price and netscape is still free, who's going to get all the market share? With just IE in this company then this one will fail faster then a Art's major taking a quantum physic exam.
/NEED/ a product they can sell, and they can't sell IE.
The third company should have IE, and all the Internet products. Like IS, Exchange, and anything else they have dealing with the internet. The other two companies should probably stay the same, one OS, and the other Applications and the rest. For the third company to survive they
I can actually see a forth company coming out of this, one dealing with hardware. They keyboards and mice are actually quite good. That way you'll have four baby bills: OS, Internet software, General Software, and Hardware. Each of them have products that they can use to make money on.
Just my 2 cents.
Software Engineer & Writer of Military Science Fiction and Fantasy Blog: petermwright.com Twitter: WrightPeterM
The key point to realize is that the interim conduct restrictions DOJ proposes (which, note, Judge Jackson did not ask DOJ to remove) kick in while appeals are pending. The rationale here is that Microsoft is engaging in ongoing illegal conduct, and it's appropriate to stop that while appeals are pending. If Microsoft wins on appeal, maybe they get to resume their monopolistic practices at some future date. Meanwhile, Microsoft is going to have to start disclosing those hidden interfaces. Probably by fall, the way things are going.
This is great for the Open Source community. Among other things, the WINE people will finally get the info needed to make it work right. One of the big Linux players may pick up on WINE and do the grunt work to make it run Microsoft Office. At that point, Linux on the desktop looks a lot more attractive.
As for the breakup, the financial community seems to agree on what the applications part is worth, but estimates of the value of the OS part are all over the place. This reflects reality - Microsoft Office is a good, useful product that sells on its own merits, and Microsoft's operating systems require coercive, monopolistic sales practices to sell them.
FYI about Microsoft hardware from personal experience in the industry: MS established themselves in the PC hardware business by again leveraging their OS and apps monopolies, and not on the merits of their product.
Put yourself in the place of a PC manufacturer for a moment: Guess what happens to the cost of your OS and apps licenses if you decide you *don't* want to ship MS keyboards and mice? The simple fact is that if you want "most favored nation" pricing from MS, you *will* ship a significant portion of your orders with MS hardware. You'll also build your hardware to conform to Microsoft's hardware specifications and do whatever else they tell you to to, simply because you can't afford not to. It's precisely this sort of abuse of monopoly power that's illegal, and for good reason.
Back in your role again: You don't have to sell MS hardware of course, but remember that the OEM PC business has become one of thin margins and volume, so if you pay another $30/unit for your OS and apps license simply because you'd like to specify your own keyboard, you are now at a significant disadvantage to your competitors in a world of $150-$300 margins for desktop PCs.
It would be interesting indeed to see how many OEMs would continue to buy Microsoft's hardware if they didn't have to.
Don't ever forget that the computer makers don't even get to decide what the hardware standards are for your next PC: that's Microsoft's turf (PC9x, et al), and again, if you don't play, you pay - big. This control will bite Linux and other alternative OSes big-time in the near future, as it already is to some degree with the new "legacy-free" PCs required by the newest versions of the specs.
(Opinions here are mine.)
"The future's good and the present is nothing to sneeze at." - Roblimo's last
You know, listening to all of these breakup plans until this very moment, I hadn't been swayed. The idea of the government interfering in the computer industry, particularly in the workings of a single company, repulsed me. The idea of tearing apart the wealth people had built up from a little piss-ant company that started back in the seventies appalled me (and don't give me the "stock boost" stuff - at least some of the proposals specifically ban Gates and others from owning stock in both or more companies, so all concerned WILL lose money). The idea of a bunch of someone's competitors using the DOJ to attack one's company when they couldn't out-compete disgusted me.
But now I've seen the light!
It's silly, at best, for a company to produce more than one product, and at worst, it's an attempt at evil corporate dominance! Some companies use their multiple product lines to reinforce the profits of all their products. This is clearly a manipulation of consumers.
Let's look at our own beloved computer industry.
Further, these companies also make a crucial, horrible mockery of the open software market - they don't release the source code of their products so that any chump with GCC and a CD-R can compile and sell "his" or "her" own competing versions of those programs. That's just wrong.
I think I see a glorious future for our industry, and maybe many others. There are a lot of companies that just need to be broken up into smaller, more intelligent businesses. The people running the companies and the shareholders can't be trusted to judge this for themselves. Who is better-prepared than the lawyers of the DOJ to perform this sort of micro-management of the market? Certainly, this will cause a temporary period of adjustment, and the legal profession's ranks will swell, but in just a few decades the computer industry would be unstrung enough from the courts to come back to life and start work on the long-awaited next versions of all those products...
And then, all those out-of-work lawyers can start taking a look at the "GNU/Linux" racket. I mean, come on! They give all these things away, then start leaning on any companies that makes use of the software to release versions of the companies' products that are compatible through astroturfing by users who barely use any of the software to begin with...
Yeah, my karma was getting too high, anyway. ;)
Has Microsoft bought them out too?
Got Rhinos?
Richard Stallman has his own views on what should happen to Microsoft, which seem a lot more reasonable than simply splitting up the company.
What needs to be done is to get beyond the "We must *hurt* Microsoft" mentality into the "How will doing this to Microsoft effect the industry in the long-term?" mentality. Splitting the company up just seems like an appealing way of hurting them. It doesn't seem like it is doing anything constructive.
Splitting seems like changing one successful company with popular products into three.
I don't see any problem with Microsoft giving away its browser. You get netscape and lynx with Red Hat, and konquerer with KDE, and nobody is complaining. It isn't the giving away for free that's the issue, its unnecessarily tying the software into the system in a way that makes it non-trivial to replace, and bullying its OEMs into installing their browser exclusively. I use Notetab for editing text on the PC; I'd hate to see notepad tied deeply into the guts of the operating system. It just doesn't make technical sense and doesn't benefit the user.
IE's tight integration with windows is because the browser is the linchpin in Microsoft's strategy to leverage Desktop dominance into dominance in the server market, on to content creation and ultimately to content itself. It is critically important to thwart the use of monopoly power to implement this strategy. If MS sucessfully ties even two of these areas together it would severely restrict customer choice.
If I were to go to more than two companies, I would split off these areas:
In other words, force each of these strategic areas to cooperate via public standards.
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The ENTIRE reason this anti-trust case came to being is because Microsoft didn't obey the new rules that were set out in the consent decree that they agreed to in 1995. They had their chance and they've shown they're not going to obey any restrictions placed on their behavior.
Breaking Microsoft up, in anyway, will lessen their dominace of the industry... Split horiztonally, they'ed have to compete against one another. Splet vertically, the windows group will no longer be able to trust the fact that Office is basically developed solely for them...
If the office group decided to start developing for Linux, BeOS, Solaris, or any other OS, today (yes, they do develop for the mac, but the mac isn't a commodity x86 platform, so many corporations shy away from it), Windows sales would stand to take a beating because then people and offices could run their operations using cheaper OSes... Therefore alternative versions of Office never surface. If the Office group was separated and didn't have to keep the OS group happy and prop up their income, Office might still remain the only game in town for Office Suites, but the OS landscape would change dramatically. And with more and more online applications arriving, the application landscape stands to shift on it's own.