People love to hate Microsoft. In fact, Microsoft has been criticized for
just about everything from buggy releases to bloated code, and their CEO,
Bill Gates, has even been compared to Satan.
But how can anyone hate this company? Microsoft has allowed mutual funds
in many a 401K plan to do extremely well over the last 10 years. Should we
hate a company that is greatly responsible for the booming Internet economy
we all enjoy today? Why despise a company that has been in some small
measure responsible for the microprocessor revolution, which in turn has led
to a revolution in networking, which in turn has led to the growth of the
Internet and of course led to the emergence of Internet telephony? Could you
hate a company that supplies productivity tools such as Microsoft Word,
Microsoft Windows 98 and just about every important program on most
computers? In many ways, we are all indebted to Microsoft.
So with all the good that Microsoft has done, why do so many people love
to hate them? As thanks for all the productivity and efficiency increases in
our lives, we should all love them. Shouldn't we?
If you have a long memory in the computer market, you'll remember a
company named Artisoft. These are the folks who make a PC-PBX product called
TeleVantage, which we use in the editorial and art offices of TMC. Artisoft
used to make a product called LanTastic, which was the de facto networking
product for workgroups and smaller companies that couldn't afford Novell
Netware. Artisoft had the small networking market sewn up until Microsoft
came out with Windows For Workgroups, a product that was a fraction of the
price of LanTastic with near identical functionality. Shortly thereafter,
the vultures started circling around Artisoft, forcing them to change their
business model. Hence, they are now in the PC-PBX business. (Those vultures
may soon be circling around Novell as well.) I purchased Windows For
Workgroups when it first was released and quickly standardized on it at TMC
until we later migrated to Windows NT.
You don't have to have a database for a memory to recall other examples
of companies that were ruined by Microsoft. Speaking of memory, who
remembers Quarterdeck and speaking of databases, who remembers Borland? I
remember both, and even if my memory is not perfect, I remember when
Borland's Paradox was the market leader in PC databases along with Dbase. As
I recall, Borland began a software price war, something that was unheard of
until that time and Microsoft ended up undercutting Borland, charging $99
for Access, their competing database. I purchased Access and it was far
superior to Paradox. Borland soon countered with Paradox for Windows. I was
a loyal user of Borland's products but Paradox For Windows was atrocious as
I recall and TMC immediately switched to Access.
Back in the late 1980s, many of you may remember a product called
Quarterdeck Expanded Memory Manager (QEMM). For those of you too young to
recall, PC memory architecture had limitations beyond 640k and in order to
access numerous drivers on your computer, you had to load them into extended
or expanded memory, the area between 640k and one MB. This was accomplished
by using arcane commands such as LOADHI in the autoexec.bat and config.sys
files. QEMM was a great product in that it allowed you to load more drivers
onto your PC than ever before and for many years it was a number-one selling
PC package. Eventually Microsoft decided to bundle a similar product into
the OS and Quarterdeck was forced to walk the software plank. Can you tell I
was once a loyal Quarterdeck user?
There are other examples of products that were decimated by Microsoft...
Central Point Software's PC Tools Deluxe, Ashton Tate's MultiMate and of
course the once number one word processor maker, WordPerfect. Do you
remember Ami Pro? Ami Pro, where did you go? Has anyone ever beaten
Microsoft? Definitely not Netscape, and definitely not Oracle. What does
Oracle possess that makes them immune from the pressure of Microsoft's
dominance? Nothing. Market share means nothing when your competition already
has a strong relationship with most every customer in the world. Superior
software means nothing when Microsoft has armies of engineers at their
disposal to combat your latest state-of-the-art software. Lets face it, if
all of the companies listed above couldn't fight Microsoft, how will anyone
be able to? Whatever markets Microsoft decides to enter, they dominate.
Microsoft has become the safe choice. Regardless of your feelings for MS,
their software eventually becomes the leading product in almost every space.
I've come up with something I'd like to call Tehrani's Law. "He who
owns the user interface owns the market." In other words, you can't
compete with a company that can leverage the user's world and seamlessly
continue to tie in new products.
Based upon this law, I see Linux as a great server product but no real
threat to Microsoft at any point. When you own the desktop, you own
everything. I used to argue with Netscape diehards years ago that Microsoft
would drop kick Navigator as soon as it ties Explorer into the OS. Sure
enough, Explorer has more or less become the OS. I applaud Microsoft for
injecting Explorer into Windows making both the OS and browser much more
intuitive. I simultaneously mourn for Netscape and any other company that
sits within Microsoft's crosshairs.
MEANWHILE, IN COURT...
You may have noticed a great deal of press on the DOJ versus Microsoft
case and I wanted a chance to voice my opinion on the matter before it is
totally settled. This case is crucial to all of us. My very existence and my
livelihood are dependent on a slew of Microsoft products and innovations. As
I stated, a huge benefit of Microsoft dominance is rapid adoption of
standards such as ODBC, DCOM and Active Server Pages. I would hate to see
the framework for rapid standards torn to shreds yet at the same time, I
hate to see other great companies with incredible new technologies go up
As I write this, it seems that the government's desire to divide
Microsoft into two "Baby Softs" (an OS company and an applications
company) is about to take shape. Although these two divisions are
unofficially called WinCo and AppsCo, I prefer calling the application
division, BabyA and the OS division BabyO since this nomenclature reminds me
of Baby Bells. If Microsoft is not able to successfully appeal this
decision, we may have to contend with two monopolies. Both BabyO and the
Office division of BabyA have been adding on a wealth of features in each
new release of their products. Microsoft Office has more or less become an
OS of its own, complete with a programming language and other open
interfaces. I am not sure that dividing the company in two pieces will help
this behavior...it could just make it worse.
Let's consider software developers in today's market, trying to sell
successful software products. One huge threat that these developers face is
that Microsoft will bundle a product with similar functionality into the OS.
Perhaps they can even give it away for free as a standalone application.
NetMeeting is such an example. If the Justice Department succeeds, we might
be faced with both new babies building in software products that clone ideas
of successful developers and bundling them for "free." I am not
sure that free is the correct word as any new features would be paid for by
the price of the upgrade but you could argue that recurring revenue streams
from upgrades allow Microsoft to severely undercut the prices of competitive
Imagine you're a developer and you come out with the latest whiz-bang
Internet telephony software and BabyA and BabyO decide to bundle the same
functionality into Office and the OS respectively. How could any company
secure VC funding, if the ever-present threat of two faster and more nimble
Microsoft descendents are waiting to steal your market share?
If you consider Office to be an OS, then you are effectively dealing with
two OS companies. The lengthy DOJ court case was designed to break up a
monopoly but wouldn't it be fairer to equate this case to one of a monopoly
and dumping? If you look at this case from the eyes of the competition,
isn't competing with Microsoft analogous to dealing with a company that is
dumping software onto the market? After all, when you release your whiz-bang
Internet telephony software into the market, your business plan calls for
you to charge $69 retail per license as many companies in the Internet
telephony software business once did. You proceed according to your business
plan and six months later; Microsoft has a beta product with similar
functionality that is to be bundled into the OS. Ouch! Where does that put
the start-ups? Microsoft can continually dominate any market they choose by
effectively dumping products into the market at prices that other companies
could never match and remain profitable. The development costs of these
incremental additions to the OS would be of minimal cost when weighed
against the tremendous revenue streams that are virtually guaranteed through
The question remains, what is to stop these new Baby Softs from
crippling the ingenious new companies in the marketplace using the same
techniques above? Although the DOJ is proposing strict codes of conduct that
Microsoft must adhere to, how can you stop the two new spin-offs from
integrating new technologies that they didn't invent? I am not sure that we
can ever solve this problem. Of course we want products from the Baby Softs
to get better but we don't want competitive companies unable to make a
profit in areas that Microsoft decides to enter. The DOJ feels that at least
these two offspring will compete with each other and that would be great for
the market. I am not sure this will completely level the playing field but
it may make it easier for new entrants to compete against two smaller
companies than a behemoth. Perhaps the only savior will be seen in
successful applications of Tehrani's law, meaning that we may soon begin to
rely on other companies to supply the OS of the future. I am not talking
about Linux -- at least in present form. I am talking about the OS on your
phone, your palmtop computer, your watch, your MP3 player, or your camera.
As we move towards multifunction handheld devices and Web appliances, we
could potentially see our computing future devoid of Microsoft dominance. If
this is the case, then the free market (of which I am a proponent) will be
more responsible for reigning in Microsoft's monopoly power than the DOJ.
And perhaps that's the way it should be.
Rich Tehrani is President, Group Publisher, and Group Editor-in-Chief
for TMC publications. He welcomes your comments at email@example.com
to the July 2000 table of contents ]
A Year Already? San Diego, Here I Come Again!
Has it been a year already? We are absolutely pumped about the second annual Internet
Telephony Conference & EXPO, October 4-6 at the Hotel Del in San
Diego, CA. The editors of this publication and the engineers of TMC Labs have
once again come together to present you with a conference program that is so
leading edge, it is simply not available elsewhere.
What is scary and incredibly positive is how much the conference has changed
from last year. Almost 50 percent of the conferences are brand new; a testament
to how far this market has come in just 12 months.
I wish I had space to list detailed descriptions of all the sessions but I
simply don't. Instead, I will just give a brief overview of the new service
provider and developer/reseller tracks. Next month, I'll discuss the enterprise
and general/special interest tracks. If you would like more information, please
feel free to visit our Web site
and remember, if you register by July 25th, you will save over $300. Please
register early, as space is extremely limited in the Hotel Del Coronado as it is
a world-renowned resort.
The Evolution of the Next Gen Network: Learn how to assemble the myriad
devices and protocols necessary to efficiently establish successful and
worry-free IP telephony networks.
Send Your Packets First Class: Class 5 Switch Alternatives for the
Network's Edge: The holy grail of the service provider market. Provide voice
and data services, more inexpensively and with more flexibility than ever
Scaling the Internet: Network Architecture and Next Generation
Switching/Routing Solutions: Explore the new services, pricing models,
hardware, and software that is rapidly advancing the state-of-the-art in
How to be a Perfect Host: ASPs and Opportunities in Outsourcing: The
application service provider market is growing exponentially and there seems to
be no end in site. Explore the various options that can help make you become a
What Can the Powerline Do for VoIP? Finally some competition for the
cable and DSL providers. Explore the technologies and opportunities in this new
Cable Telephony: Ready for Prime Time? Cable modems, the most
prevalent last mile broadband devices in the land, are positioned perfectly to
transmit telephony and a world of new services. Discover the opportunities that
cable telephony presents.
Case Studies: The View From the Trenches: They say there is no
substitute for experience, so we give you the next best thing. Finally, a way of
interacting with those that have taken the plunge and deployed next-gen
Broadband Wireless: Aerial Assault on the Last Mile: Learn the
techniques and technologies that will help you learn how to implement broadband
3Com Round Table: SIP and Interoperability: A Discussion of the Challenges
and Opportunities: You'll see well over 100 vendors at Internet Telephony
Conference & EXPO, this session will expound on the challenges and protocols
that are involved with getting these disparate products working together.
Developing Internet Telephony Applications for Windows 2000: Love it or hate
it, Windows 2000 is set to be the predominant server OS of the future. Come
learn the special features inherent in the OS that will allow you to write
killer next-gen communications applications.
Standards Shootout: Nothing is worse than developing using yesterday's
standards. It is essential to come to this session to make sure you are
developing on the right platform today and tomorrow.
Linux and Open Source Development: What better OS to write open IP
telephony apps on? There are so many choices and so many opportunities -- come
and delve into them.
Managing and Maintaining QoS in IP Networks: Once an insurmountable
challenge, we are now at the point where QoS issues are effectively moot in the
right hardware and software environment. We'll show you what the right
environment consists of.
Funding Your Brainchild: From Blueprint to IPO: Learn to approach VCs
and other sources of funding as well as essential partnering and other
strategies needed to get started.