Lessons from the Browser Wars

An anonymous reader writes to mention a piece on the Harvard Business School site talking about Lessons from the Browser Wars; specifically, what can be learned about first-mover advantages and the upsurge in Firefox use? From the article: "As a tool for exploring how standards are set when new technologies hit the market, the browser wars exhibit many features we like to study: competition between two viable alternatives, rapidly improving technologies, the ability of firms to use strategic levers such as market power and channels of distribution, growth in demand leading to diffusion of the new technology through the population, and uncertainty. Thus, this is one example from which we can generalize lessons regarding the outcome of diffusion of innovation into a market."

Comments

What's the payoff?

[OBeardedOne]

I've often wondered what the business model for browsers is. Since they are given away for free then I gather the primary way to make money off them, in IE's case for instance, is to set millions of peoples home pages to the page of Microsofts choice and make money off the advertising. I can only assume that the amount of money they make from this advertising exceeds the cost of maintaining the browers tech etc or there is an expectation of a large future return.

I figure that MS must be losing out cash wise in the short term. I can't see advertising revenues from their home page being too much in excess of their development costs and I would figure that advertisers would be very weary of taking their site stats for granted. Just because they have millions visiting one of their sites doesn't mean the visitors actually pay any attention to what's on there as I imagine most arrive there because they simply don't know how to set their home page and immediately move on to another site.

Having the number 1 browser has also hit their brand extremely hard, all of the security holes associated with IE taint their brand image across the board. Sure, windows would still be known for its security issues if IE had never been around but I feel that IE's security problems has seriously compounded the bad image factor. Unless Microsoft is making serious money from IE, or knows they will in the future, I reckon they'd be better of dumping it and leaving the job to Firefox and Opera etc. Is it really that valuable to them that when a computer gets a virus/hacked the finger is often pointed at IE and Microsoft on the whole?

Innovation and hubris

[aelvin]

Not that the article didn't sound all analysis-y and everything, but I think they missed the really important stuff.

• Netscape gained a huge first-mover advantage because Microsoft (due to its hubris) didn't take the Internet seriously for quite some time.
• Microsoft woke up, got some code, and began shipping a feature-poor, buggy browser.
• Netscape maintained its lead for a while, but then (due to its hubris) started spending considerably more time berating Microsoft than meaningfully improving its own product.
• Microsoft slowly improved its product, and began to leverage its substantial distribution advantage. I believe a federal judge eventually had some strong words about the latter.
• Netscape seemed to decide that the world really needed a bigger kitchen sink more than a reliable browser. Its product became more and more bloated, less and less reliable, and much larger.
• Microsoft continued to fix bugs.
• Netscape decided it really needed to rewrite its whole product for god knows what reason, giving Microsoft plenty of time to overcome any remaining first-mover advantage.
• Microsoft's product eventually crossed the "good enough for the proles" threshold and was pre-installed on most of the machines they controlled.
• Netscape, continuing to rewrite its core product, failed to answer.

I think Netscape ultimately died partly of self-inflicted wounds, and was partly the victim of Microsoft's monopoly abuse.

Clayton M. Christensen (ironically also of Harvard) foresaw the former about a decade ago in The Innovator's Dilemma. The demand curve for browsers is shallower than the supply curve because once the browser implements the standards, there is only so much more room for it to add value. Pretty soon it ends up oversupplying features that are less and less important to fewer and fewer people; the formerly underpowered latecomer catches up -- not with the other product (it arguably never will), but with the market's demand. No matter what the first-mover does at that point, it's just more oversupply. The latecomer stumbles onto some attribute that nobody originally thought was important (integration into the OS?) which the first-mover cannot match, and suddenly the first-mover's former advantage turns into a detriment.

Near its zenith, Netscape's best possible outcome was probably to license its browser to Microsoft, let it remain the standard, and get the advantage of Microsoft's OS monopoly. However, Microsoft's hubris, abetted by Netscape's constant attacks, precluded any possibility of cooperation. Netscape's best remaining alternative was probably to ignore Microsoft completely, resist the temptation to rewrite (which also killed competitors to Word), and use their resources to keep innovating in other ways. I think Christensen would have suggested that Netscape spin off as many new ideas a possible, and for the core company to concentrate on maintaining its core product.

Sadly, this pattern repeats over and over. I hope Java doesn't become the next high-profile victim.

A significant chunk of that effort

[Crash Culligan]

...was compliments of Tantek Çelik, standards evangelist, and main designer of the Tasman rendering engine which drove IE for Mac. In digging for his history with the project, I note a few things:

• Daring Fireball's archived recap of the history of IE for Mac leading up to its cancellation,
• A blog entry describing how after Tantek was finished with IE for Mac, Microsoft moved him over to ...WebTV (?!),
• An entry on the IE Blog where it looks like Microsoft is advertising for various open positions, and many people are responding with mixed emotions.

I also considered throwing in a link to Tantek's Box Model Hack (well! I guess I did after all!).

As for TFA... gah. Don't get me started on TFA. It doesn't mention IE for Mac at all (perhaps the Publications Coordinator who wrote TFA never heard of it?) and makes some innocent and half-assed assumptions about Web Standards—mostly their lack of existence.

And the marginalization of other browsers? Her argument basically runs that other browsers don't stand a chance against IE's installed base, while conveniently overlooking the fact that IE itself was once an "other" browser and citing ways that IE got the leg-up on Netscape without ever noting that those other browsers are doing the same things to IE. The argument basically runs "Yes, things changed in the past, but things will remain as they are now because they're the way they are now." Buh?

• Ahem?
• I said, "ahem?" (look at this page in IE, then in Firefox.)
• I said "AHEM," damnit! (note what computer the man in the hammock is using.)