Now blogging at diego's weblog. See you over there!

same old microsoft - take 2

Murph commented to my previous link to an article on the Economist on the recent Microsoft moves on the server side and opening up the code. He said:

Bad article... as far as I'm aware there is nothing new in terms of what is included with the various 2K3 server packages.

Very questionable stats about level of server o/s shipments as I'll bet there are a /lot/ of unix type boxes out there for which ther o/s was not purchased.

As I've said before (and will say again) this is not to say that MS are going to behave themselves - but the products that are listed have to be paid (except in the case of small business server) for and that contradicts the initial assertion.

Bad, bad piece of analysis.

My take, since I didn't really make any comments on the article. First, what I find interesting is that it is The Economist who is making these comments. It's not as if they are the "defender of the working man" or something. They're fairly conservative. They stand for the pure "free markets philosophy", but they tend to be consistent, so so they also reject predatory monopolistic behavior, which is what Microsoft often engages in.

Second, regarding the specific assertions in the article, I don't think it is wildly off the mark, although I'd agree that it's not really new either. Murph's comment of "the [additional] products have to be paid for anyway" is accurate only in some cases. As examples, let me list Active Directory and IIS, both products that before had their own markets and that Microsoft successfully integrated into their server offering, built in, and for free. In the case of Active Directory, they've essentially killed off the competition (which was mostly Netware Directory Services, and, by the way, the product was invented by Novell too), and in the case of IIS the only thing that has been stopping them from owning the web server market is Apache/Linux.

Whether the products have to be purchased separately or not, however, is not the issue IMO. The article doesn't talk about the price, but about bundling, since the problem is not whether you're providing new products but whether you're using dominance of one market to leverage into dominance of others.

Regarding the server shipments stats, that Murph questions, I think he is right, there are many UNIX boxes that are not being paid for. But the fact that, even with that factor in, even considering it's a down market, they are still increasing their dominance is what counts.

In the end, it really comes down to whether Microsoft behaves or not. There is a fine line between doing "just bundling" and leveraging dominance in one market to conquer the next. As the article notes, Microsoft has had less success with XBox, and clearly the fact that they didn't have a market to leverage for that has been a factor.

I really think that Microsoft has what it takes to compete fairly so it's sad that they feel they have to revert to those kinds of tactics to ensure dominance. If I was an engineer at, say, the SQL Server group, I'd be pissed off that management thinks that they have to resort to these tactics to ensure the product wins, since apparently it can't win on its own merits. But maybe they feel they have no choice: given that they already dominate the PC/OS and office applications market, they have to move aggressively into other markets or their growth rate will stall. Oh well.

PS: Murph, you really should get a weblog! I think your comments would be a valuable addition to the blogsphere. :)

Posted by diego on April 28 2003 at 2:30 PM

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