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

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.