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Microsoft Monopoly

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Hi, as part of my college work I am investigating into whether Microsoft has a monopoly on the personal computer market, and the positive and negative effects of their market position on consumers. Any feedback regarding your opinions and ideas on the subject (good or bad?) would be much appreciated and help me gain a greater insight of the topic in hand.
Thanks

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by jkaras

Microsoft is a monopoly due to it's agressive sales to the merging computer companies at that time. They sold their product like any other product would, the computer manufacturers chose to utilize their product. Regardless of the motives ect.. there was a choice that all made to best sell their product no one twisted their arms.
The result was a universal standard that all other operating systems modeled their product from it for ease of use to gain customer familiarity to use their product. Mac's dont offer other operating systems on their computers but you can still load any operating system on them like pcs. Why is it that power companies or phone companies offer a choice of services? Where you live is determined what company you are stuck with, you dont have a choice and cant fire them from service, hence no choice. We may desire everything we buy to have a choice right down to the most minute desire, but we still have a choice to alter that product to suit our needs. The only problem is warrantee conflict and more money.

by fluxit

Microsoft does sell its products JUST like the others do. It is just that the others have been unsuccessful business men.

by maxwell edison

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Microsoft is not a monopoly, but rather it has a very commanding market share. There's a big difference.

Major League Baseball is a monopoly. Public utilities are a monopoly. Microsoft is not a monopoly.

A monopoly gives the consumer no other choice. In today's computing world, the consumer has alternative choices to using Microsoft products - indeed there are many alternative choices.

Does Microsoft's strong presence in the market give them an advantage? Sure it does. Is it an unfair advantage? I suppose that's a matter of opinion. But even if it is, therefore what? And if you're a competitor, before you judge Microsoft's advantage to be unfair, ask yourself this: If YOU had such an advantage, would you still call it unfair? Probably not.

Market forces helped Microsoft become the dominant player in the computing world. Market forces are the only thing that could (and should) cut into their dominant market share. Build a better mousetrap, convince people that they WANT and NEED your better mousetrap, and you can short Microsoft stock all the way to the bank.

by thechas

Microsoft has a 'functional' monopoly for both the Operating System and Office application markets.

While it is true that there are other options, there combined total is far to small to be considered competition.

Further, at many schools and the majority of businesses you have NO choice but to use Microsoft products.

On the negative side, the cost of Microsoft operating systems, and Microsoft Office are much higher than they would be if Microsoft did not have a virtual lock on the PC market.

On the plus side, you have a wide variety of other applications that function very well on nearly all PCs.

Further, the cost of PC hardware is lower than it might be if hardware manufactures had to support a number of different operating systems.

All in all, Microsoft's virtual monopoly is a good thing for the PC consumer.

Like most large companies, the monopoly is sometimes misused to force a competing product out of the market.

Chas

by maxwell edison

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A "monopoly" is just that - no more, no less, regardless of any modifier attached to it. A monopoly is the exclusive ownership of the supply of a commodity, or a commodity controlled by one party, etc.

If computing technology is the commodity, or if operating systems is the commodity, Microsoft does not control or own all of the available supply. The word "monopoly" is being misused in the case of describing Microsoft's dominant market position. Does Microsoft conduct unfair business practices? Maybe they do, maybe they don't. Do they apply unfair "pressure" on competitors by convincing computer manufacturers to pre-load their software? Perhaps. But does Wal-Mart apply unfair "pressure" on their competitors by buying merchandise by the boat load instead of by the case? Sure they do. But dealing with it for what it is, not for what it's not, is the best way to deal with it - the best way to overcome it.

To argue "monopoly" when none exists is to misidentify a situation. The more exact a problem or circumstance can be described, the more likely a successful solution or plan of action can be implemented. A sure way at failing to solve a problem is to not accurately identify it. If Microsoft's commanding market share is the (perceived) "problem", what is the MOST accurate way to describe it? The answer will shed light on the best way to overcome it.

I'm not sure about the numbers, but didn't Ford Motor Company dominate the American automobile market for a decade or so? Today, Microsoft might hold a 90% share (or 85% or whatever it is) of the operating system market, just like Ford Motor Company sold 85% - 90% of the cars for a while. Some automobile companies folded under the intense market forces working against them. But other companies figured out a way to compete with Ford, just like companies today should figure out ways to compete with Microsoft.

When that happens, the consumer will surely be the beneficiary.

by thechas

Max, I understand your point.

The ONLY reason that Microsoft is not a 'classic' monopoly is that they do not want the government intervention that would result.

The primary reason that Bill Gates invested in (gave money to) Apple was to prevent Apple from going under. Thus making Microsoft a true monopoly for the personal computer market.

If you want to get technical, Major League Baseball is not a monopoly.
MLB was officially declared to be exempt from the anti-trust laws meant to regulate monopolies.

Sort of like how the tomato is classified as a vegetable and not the fruit it biologically is.

Chas

by cactus pete

From AmosWeb:

monopoly: A market structure characterized by a single seller of a unique product with no close substitutes. This is one of four basic market structures. The other three are perfect competition, oligopoly, and monopolistic competition. As the single seller of a unique good with no close substitutes, a monopoly firm essentially has no competition. The demand for a monopoly firm's output is THE market demand. This gives the firm extensive market control--the ability to control the price and/or quantity of the good sold--making a monopoly firm a price maker. However, while a monopoly can control the market price, it can not charge more than the maximum demand price that buyers are willing to pay.

From Dictionary.com:

exclusive control of a particular market that is marked by the power to control prices and exclude competition and that esp. is developed willfully rather than as the result of superior products or skill

by fluxit

Many are calling MicroSoft a monopoly. Meanwhile others are suggesting the MicroSoft is a dominant Oligopoly. All this is really not relevant unless you are going to sue MicroSoft. Well some us in effect did when they settled the Class Action lawsuit in Florida. I for one did not participate in that Class Action because I viewed it as a bunch of scummy lawyers drumming up business for themselves and my settlement was insignificant.

Bottom line is nearly all of us except for McNealy at Sun use MicroSoft products. Microsoft is here to stay. However, if I was writing a college paper I would look to the future of the information age. In the 80's a big push was the paperless office and CIM, CAD, CAM, CAPP, MRP, DRP, ERP etc... That is here today and maturing. So where are we headed?

One avenue to explore is considering information networks like they are public utilities but slightly different. Like electricity and communications are delivered to you home via shared conduits with customer owned equipment at the terminal point so is information.

Consider the wires delivering trons to your home and telecommunication companies share in the maintenance of these wires based on utilization. What if windows becomes the common media delivering, processing, and presenting information? What if a Windows consortium was to form and based on market share or ultilization companies were represented in the consortium to develop and maintain windows?

Obviously, MicroSoft would not like that but it sure would solve a lot of problems out there. The market would change drastically. Companies would compete on the merit of thier products that go into windows. It would remove the proprietary aspects of the operating system. Other operating systems would die. The market would become focused and streamlined.

On the otherhand, MicroSoft keeps a tight control on drivers and other code preventing the problems of the old days when there were huge conflicts between drivers and software versions. I remember those days. It was a nightmare. Many of the young ones probably do not know about how annoying the blue screen of death was. Those days were terrible. There were 1000's of reason's why it would happen. Today there is only 6 reasons.

Anyhow, I thought that would be a interesting twist on MicroSoft and the operating system.

by jimhm

I believe Microsoft is using Monopolist pricing and market tatics with their products. Upgrade or else!

But with open source and Mac available they don't have a PC market monopoly. And I believe the market forces will drive Microsoft to change its tatics - as Opensource gains speed and support along with Linux - Ms will have to change or be left behind.

People are getting smarter to the face that poor quality product from MS - is not a corporate risk they are willing to accept anymore.

by maxwell edison

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Microsoft isn't alone in that regard. I just spent $25,000 "upgrading" AutoCAD now under the threat of having to pay $100,000 later, after January 15, 2004, when they "retire" the earlier version we're using.

Blackmail?

by jimhm

Your not being blackmailed - its called being a hostage - and paying the price to keep the hostage alive and well.

Other companies see Microsoft tatics and adopt them - hey why not if the big kid on the block can do it why can't we.

When the market has a dominate leader in a technology - they can use a monopolist pricing and market tatics on thier customers....

I guess its the pay me now or pay me loads more later... or stay at the unsupported version or change vendors - which has the better pricing.

We have been in the middle of replacing CA's products - and others that have attempted that tatic. Its funny - when these vendors find out that you are willing to pay the addition costs to replace and retrian staff. All of a sudden - they find a happy price point for you.

It's been like working with a car salesman - you got to get down to hardlines - and be willing to take the hit of a switch. When they realize that you get some pretty good 3 year deals.

by jkaras

new out is ghettopoly that acyually has a crack rock, pimp, pot leaf as the game pieces to name a few! The chinese immigrant that thought of the idea claims that he attempting to breakdown stereotyping? He also claims that their is future releases of hispanic and asian versions.

by oz_media

But a consumer monopoly. People don't HAVE to buy Windoze, although most new PC's are packaged with Windows, you still have the option to change.

It is simply the masses that have adopted Windows that have made it a consumer monopoly. People that aren't computer savvy can but a computer, send email, download Incredimail and wbshots and think they are pretty much in the loop!

As time passes and new companies enter the market, the users will be more educated (after troubleshooting Windows for a few years)and will then start looking to less troublesome avenues.

Myself, other than the Vic20 phase I went through, have never really followed the industry or got into DOS programmig etc. I entered the Win 3.11 world by runnig a 300 seat call center that used 300 static IP's. Big headache.

Since I've been troubleshooting Windoze for years now and have since achieved my Master CNE cert, I have been made aware of more stable OS's, yet few offer the features and functionality we've all become used to now from Windoze.

As time passes, users won't NEED a pretty GUI interface from Mr. Gates and will look for real computing power and an inteface that works.

Gotta remember, there are a lot of parents and seniors who are still just learning the basics of email and saving pictures sent by their grandchildren. Their grandchildren have much more knowledge as it is now commonly taight in most (if not all) schools. The next generation will have a few more 'savvy' users and so on and so on...

Patience, and perhaps Bily G will not be the bully in the playground anymore.

by oz_media

"It's been like working with a car salesman - you got to get down to hardlines - and be willing to take the hit of a switch. When they realize that you get some pretty good 3 year deals."

That's what all MY fleet lease customers used to think too.

Bottom line, I always got the price I wanted in the end. You just avoided getting sucked in to the retail rip off and settled for the salesman's margin instead. Fine for both of you.

by deadly ernest

MS is not a monopoly there, and always have been, alternatives available. MS have a huge market share simply because the average user and corporate buyer has an IQ that score with a single digit, and a value below 5 (or they appear to have).

MS design software for easy use by non-technical people, ie 95% of the population; the fact that it also suits morons is a side issue. They design to the minimum standard for the majority of the market, and are bloody good at doing that.

When MS entered the market the majority of software was designed for research labs and tested to a fare-the-well, thus they were priced at a few thousand dollars each (comparable to paying about $20,000 today). MS marketed an inferior products that met minimum user needs for a hundred dollars or so. This made the software cheap enough for anyone to buy and coincided with IBM clone computers being available for a few thousand bucks instead of tens of thousands.

Most MS software was capable of being installed and set up for basic use by almost anyonbe, all the available opposition required a highly trained tech to install and set up. The wonder is not that MS got such a large share of the market, the wonder is that anyone elese retained any market share at all.

Since then people have stayed with MS on the basis of 'the devil you know', or too lazy to learn how to use anything else. As a result anyone wanting to lure average MS clients away from MS have had to mimic MS operations so that the users don't have to learn anything new.

Good points for MS have been dramatic reduction in software prices (here we are over 20 years later and they have not yet returned to the pre MS dollar prices despite inflation etc), easier user usability, general use of computers.

Bad points for MS are that it is still chintzy software, aggressive sales techniques (learnt from IBM, Prime, Apple, etc), a company setting some industry standards.

Personally I expect that MS will soon change some of their directions or start to see major changes in their market share.

by hal 9000

Try evaluting different applications that do the same thing. As Windoes is the default standard you could compare Word Perfect Office against M$ Office and there are numerious others but that is just a starting point as to what top look for.

While M$ does have a Monopoly it isn't in the conventional sence as almost every PC uses Windows and there is a price incentive to use M$ products made by M$ to their OEM System Builders and the like but even now I believe that Dell is supplying Word Perfect as an alternative to M$ Office.

What would happen in a real monopoly is that there would be no improvment of anything and constant rebadging of existing product to sell more but M$ is belatedly making an attempt to try to make their products mo=re secure than they currently are and there are other products available that do in fact lead M$ as not even Microsoft can hope to supply 100% of the PC software market. I know they would like to be in this position but they will never get there as there are currently too many products available for areas where M$ doesn't supply software.

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