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IBM & Microsoft Rift
About 30 million of you wrote in to say "This article at ZDnet describes the problems IBM went through when it kept selling OS/2 even after Microsoft asked them to stop
" Essentially, MS quintuplied royalty fees to IBM, when IBM refused to stop selling competing products. This came out in a deposition from IBM execs.
I thought I'd add some additional thoughts from inside Big Blue to this interesting conversation.
It should be noted that IBM has no plans to offer a commercial PC OS. This should come as no surprise, given our past failures and recent support of Linux (I think after we handed a big fat layup to M$ and the recent rise of Linux have squished that idea quite nicely).
However, it is also worth noting that IBM has created more than a dozen different OSes during its lifetime (AIX, VM, OS/2, OS/Open, OS/390, OS/400, the list goes on...) . It would be fair to say that we have no real emotional attachment to any one of them, which is why I think we're in a better position to support Linux than Sun or HP, who are clinging to their *NIXes like they're going out of style (- hey, a colloquialism that really fits!). Don't be fooled by their flashy press releases patting Linux on the back; I don't expect to see them really put Linux in the driver's seat for many years. Granted, IBM will probably follow the same road map, but at least we're more used to cutting our losses and switching out OSes than our other workstation buddies.
It is also very true that IBM once attempted to make everything electronic IBM proprietary. That mentality still survives in some areas in IBM, but being that IBM is primarily composed of engineers, most of us are completely sold on IEEE, ITU, and ISO standards. I hear a lot of people shouting vehemently of how IBM is the evil proprietary empire, but I don't think that's a fair assesment anymore.
I work in the Networking Hardware division (Slashdot reader: Networking? I didn't know IBM MADE switches and routers...), and there's only a few products I know of that use proprietary tech, and they are all going end of life. Gone are the glory days of 3270 and 3274. Everything else is purely IEEE and ITU, or else the safety and homologation guys come back and yell at us. All ATM, Ethernet, Token-ring, ISDN, FDDI, and T1/E1 are all our bread and butter now, not proprietary busses.
Anyways, I don't think IBM is worth criticizing anymore for proprietary behavior. We pretty much lost that battle soundly.
Comments welcome.
The opinions I post here have nothing to do with my employer.
I am a lawyer, but this is not legal advice. I am probably not admitted in your jurisdiction. If you need advice on this topic, see a lawyer licensed in your jurisdiction.
That said, IBM's version of MS's behavior (assuming the truth of it for the moment) is about as illegal as it gets.
*Having* a monopoly is not illegal, unless you got it in an illegal manner. The original microsoft mnopoly was lawfully acquired by most counts, and owes more to IBM pricing CP/M-86 at four times the price of PC-DOS than to anything Microsoft did.
However, having legally acquired a monopoly, it is illegal to use market power for just about anything. ANd one does not have to be a monopolist to reach this prohibition, but merely to have market power. Here (again, assuming that it is true), they attempted to use a near-monopoly to eliminate a competitor. This creates two great sins against anti-trust law: 1) the use of the power, and 2) it is an *attempt* to monopolize, an offense on its own.
It is possible to make economic arguments that what MS has done is good for the consumer, and that the law *should* permit the alleged behavior. THere have been several of these as op-ed pieces in the wall street journal over the past few months, and generally rely on the notion that microsoft is innovative.
I haven't been persuaded by the arguments, but they can be honestly made. However, that is not what the law *is*. While antitrust law gives the courts far more flexibility than just about any other statutory law, and modern antitrust law acknowledges consumer interest rather than protection of competitors as the ultimate test, the definitions needed to permit the alleged behavior not only bend the meaning of the statutes, but requires that they be outright ignored.
> 1) You can not sell any other operating system > without threats and damage from Micros~`
>
> Interesting. Why is it that lots of OEM's do sell other OS's, including Dell and Compaq.
When did they start doing that? Compaq just bought Digital so it has a base large enough to require support. Wasn't Compaq threatened to lose its license to Windows because it installed Netscape? Not a very friendly thing for a friendly Micros~1 to do. Compaq is not very close to Micros~1 any more. Recent history too.
> 2) You can not add software to that package except under strict scrutany by Micros~1
>
> You cannot *REMOVE* software from a windows installation, you can add anything you
> like. Lots of OEM's including Toshiba and IBM have been shipping Netscape for years,
> just not at the expense of removing IE. You also can't alter the boot up sequence.
And they pay dearly for installing those products too. They can't put those products icons on the desktop though can they? Customers have to go find those packages instead of having them right up front.
> 3) You can not write software that competes with Micros~1 in any way and still sell its OS on your PCs
>
> Well, since IBM is really the only company that both sells commercial software and sells
> PC's, it's hard to judge based on one case.
HP and Compaq have software divisions but why don't they have anything that competes with Micros~1? Same reason why nobody will stand up againt them in court. Fear. IBM is about the only one willing to stand up and fight and even thought they are making alot of money supporting broken Windows installation/products they are also paying for it. As the current news stories are showing us.
> 1) You can not write software that competes with Micros~1 in any way.
> Strange that many companies DO compete with Microsoft, and still stay quite up to date.
> Intuit for instance.
Funny the government already told Micros~1 to stay away from them and you chose them as your one example.
> 2) You can not write software for any other operating system and keep up-to-date on Windows.
>
> Strange that Intuit does this. So does Corel.
> So does IBM (remember, they write more
> software for NT than anyone else besides MS
> right now). So does Perforce, Rational, and
> more companies than I can name.
There goes Intuit again. Do you really think Corel gets the time of day from Micros~1? They are fighting the good fight with what they have but since MS Office has been bundled with Windows, they don't have much market left. Again, IBM pays for dearly for doing this, they are just big enough to be able to afford it.
> 3) You can not grow your business very large or Micros~1 will see you as a threat.
>
> Strange that Microsoft doesn't see companies
> like SAP as a threat. They're one of the top
> selling companies on the market.
This is a desktop product? We are talking aobut Microsoft's leverage of the desktop here. If they are allowed to continue into the server space, SAP will be attacked the same way others have been.
> 4) If Micros~1 decides your market is desirable you should be prepared to exit that market.
>
> Only if you're incompetant and have only
> managed to stay in business if you have no
> competition. Clearly, lots of companies compete
> with Micrsoft and win. Again, Intuit is one.
> Lotus is another. Microsoft doesn't
> automatically dominate in every market they
> enter.
There is Intuit again.... Lotus has IBMs $$ behind it and they are putting up a good fight. Exchange should be no competition for Notes but look at what it has done so far. Boy it is even at something like rev 6 even though it is only a couple of years old. FUD and Micros~1 is attacking it with MS LookOut by preinstalls in Windows.
Kind a poor case you put up there. The history is there, you just have to be more then 20 years old to have actually seen it happen and be aware of it. Some 15 years of it. IIRC
"Anyone who stands out in the middle of a road looks like roadkill to me." --Linus
The anti-trust laws are distracting the DoJ from the real problems such as violation of contract & copyright, fraudulent sales of " * software", frivolous patent filing, IP abuse, the problems in the IP system, frivolous lawsuits (e.g. your domain name is my trademark), and I could go on.
This scene is remniscent of the Romans throwing Xians to lions while their empire crumbled.
My suggestions for DoJ:
1) Was Digital v. Seattle-company-Gates-bought-DOS-from ever resolved? Or is Win311,95,98,2K still using cpm?
(and where does the slash go?)
2) MS and IBM co-develop OS, MS pulls out, takes toys home, whose toys?
3) All the patent stuff we all know and hate.
4) If it doesn't comply with the w3c standards is it really a web browser? If I sell you a toaster that frappes bread, is it really a toaster? Is it fraud to sell an operating system that doesn't operate? (ref. If MS built cars)
5) Linux is open source, MS is closed source. How do we know they aren't violating GPL, besides the fact that they haven't got things working yet?
6) All the 1st amendment stuff. Or more importantly the 9th amendment, even if no one ever noticed it.
And one more for the rest of the country:
Why would anyone ever agree to the ridiculous terms of MS licenses? Unless MS held people at gunpoint or ground-zero, the haven't forced anyone to do anything, hence no violation of rights (in this regard), nothing illegal, no case. The real problem is how so many people could be so foolish. Let's start by blaming the schools!
Or maybe we could relax, confident in the value of free software, and go do some programming.
It's funny, because IBM was everything that Microsoft is now back in its heyday. IBM made Microsoft what it is today. This may be a stretch, but IBM and Microsoft fit nicely into the roles of Obi-Wan and Anakin/Vader. IBM takes Microsoft under its wing, supports it and makes it a driving force in the industry. Then Microsoft turns around and bites the hand that feeds it, turning the Dark Side of the monopoly. Now, a much older and still much more experienced IBM is undermining Microsoft yet again, with its support of the new challenger, open-source software. IBM itself is too much of an old, slow behemoth to actually do much to counter Microsoft, but by supporter this new contender, they're encouraging not an anti-Microsoft sentiment, but a more inventive philosophy that is driving the software industry to new ideas and new successes. Even Microsoft is taking heed, even if it is in their own twisted way. Obi-Wan never actually defeated Vader, but he did train the little kid that did.
Star Wars analogy aside, IBM can only be helped by these maneuvers (both past and present). By standing up to Microsoft back then, IBM paid a painful price, but set the stage for others to do the same. Hopefully, Dell and other companies currently trying to work in other (more productive) solutions will be more successful.
An operating system is not a public utility - maybe twenty years this was closer to the truth, but certainly not today. Utilities are regulated because they have high capital costs (physical infrastructure, like laying phone lines) when they are created. It's difficult for more than one utility to make money serving a particular market, because of these startup costs. Since this makes them de facto monopolies, they are regulated by the government.
Software is different. There is a capital cost to create it, but the current means of distribution (the Internet, computer stores, etc.) are widely available, so software companies can try to get into any market they feel like. There is no need to regulate a free market for software unless some companies break the law.
This is what the government is alleging in its lawsuit. A computer operating system isn't a natural, unavoidable monopoly like the phone company. Microsoft constructed their artificial monopoly by a number of unethical and possibly illegal marketing, sales, and distribution agreements, many of which are only now coming to light. It may be a temporary inconvenience for the public to have to deal with three or four "Baby Bills", but that is a small price to pay to encourage fair business practices and discourage monopoly-building in the software industry.
Your right to not believe: Americans United for Separation of Church and