February 27, 2004

WE WANT A PERP WALK:

Microsoft to drop questionable provision: Raided Japanese unit promises to remove PC licensing deal stipulation (The Japan Times, Feb. 28, 2004)

Microsoft Corp. will remove a patent-related provision in licensing contracts with personal computer makers, the U.S. software giant's Japanese unit said Friday.

The Japan unit was raided Thursday by the Fair Trade Commission on suspicion of violating the Antimonopoly Law.

The Japanese antitrust watchdog investigated Microsoft's headquarters in Tokyo regarding the controversial provision the U.S. firm inserts into contracts with original equipment manufacturers -- mostly PC and device makers that sell their products loaded with Microsoft's Windows operating system.

"Microsoft has decided that, given its focus on improving customer satisfaction, it would delete the provision in its entirety from the next round of OEM contracts, which will take effect later this year," Microsoft said in a statement released after the raid.


It'd be interesting to see if Bill Gates could run a company without resorting to criminality.

Posted by Orrin Judd at February 27, 2004 6:12 PM
Comments

Hmm, the Japanese Fair Trade Commission. Don't they share offices with the . . .

French army,
East German EPA,
Russian Civil Liberties Union,
Iraqi Olympic Committee.

Posted by: David Cohen at February 27, 2004 7:26 PM

>>It'd be interesting to see if Bill Gates could run a company without resorting to criminality.

Orrin: When the horse is taught to sing.

Posted by: Joe at February 27, 2004 9:54 PM

OJ:

It would require them to write working software.

Posted by: Robert Schwartz at February 28, 2004 1:06 AM

Their goal is to produce the best possible K-Car, or at least not make any more Pintos, Corvairs and Vegas. It's too bad that their only competition comes from Chevy pickups and Avantis. Where's Datsun or Honda when you need them?

(Working there as a contractor who is the only Mac guy in a group is an interesting experience.)

Posted by: Raoul Ortega at February 28, 2004 2:46 AM

We're not exactly talking about the Chicago Mob during Prohibition; Most of these "crimes" are aggressive tactics that governments decide cross the line, similar to having deductions disallowed on one's tax returns.

Microsoft's ongoing domination may be in part due to such activity, but the company's rise was mostly just due to catching the perfect wave, the explosion of personal computers for the home, and managing to not mess it up along the way.
The last seems simple, but should not be taken lightly - It's one of the hardest things for a company to do, grow rapidly and constantly without stumbling.

Posted by: Michael Herdegen at February 28, 2004 5:14 AM

We're not exactly talking about the Chicago Mob during Prohibition; Most of these "crimes" are aggressive tactics that governments decide cross the line, similar to having deductions disallowed on one's tax returns.

Microsoft's ongoing domination may be in part due to such activity, but the company's rise was mostly just due to catching the perfect wave, the explosion of personal computers for the home, and managing to not mess it up along the way.
The last seems simple, but should not be taken lightly - It's one of the hardest things for a company to do, grow rapidly and constantly without stumbling.

Posted by: Michael Herdegen at February 28, 2004 5:15 AM

The mob sold some liquor to the dregs of society. MicroSoft has retarded the computer revolution and damaged every person on the planet thereby.

Posted by: oj at February 28, 2004 8:31 AM

Raoul:

Like being the Connecticutt Yankee in King Arthur's Court?

Posted by: oj at February 28, 2004 8:36 AM

Perhaps those who come up with innovative applications or ways of doing things shouldn't sell their brainchild to Microsoft.

Further, "Wintel" has some competition in Apple and Linux, but consumers still favor Microsoft.

How is it Microsoft's fault that their opponents are incompetent ?

In any case, Microsoft's dominance is a temporary era. They'll be far less of a player once the web becomes the platform, as seems to be the trend.

Posted by: Michael Herdegen at February 28, 2004 10:21 AM

Michael:

Their opponents aren't incompetent--MicroSoft uses predatory and criminal practices to crush them. If their products had to survive in a truly free-market environment they'd fail.

Posted by: oj at February 28, 2004 10:34 AM

OJ hits the nail on the head.

Unfortunately, when Apple introduced the Mac, it went for profit margin instead of market share--an excellent example of thinking tactically instead of strategically.

So, unwittingly, Apple abetted Microsoft's astonisingly predatory trade practices.

(BTW--the more I use MS products at work, the more I appreciate my iMac at home.)

Posted by: Jeff Guinn at February 28, 2004 11:01 AM

All;

Having been a professional software engineer since before Microsoft was founded and having watched the whole thing in real time, I have to say that Mr. Judd's position is bordering on delusional. Frankly, you all sound like the Democrats wondering why they're getting spanked electorally by the Republicans. It must be a conspiracy!

This isn't to say that the Republicans and Microsoft haven't played dirty, but that's icing on the cake, not the fundamental reason for their success.

Posted by: Annoying Old Guy at February 28, 2004 11:59 AM

OJ,

> Their opponents aren't incompetent--MicroSoft
> uses predatory and criminal practices to crush
> them. If their products had to survive in a
> truly free-market environment they'd fail.

Sorry, I have to agree with AOG's take here about delusional thinking. If you don't remember IBM and it's OS/2 mess, let me remind you: IBM was in regard to its promotion and marketing of OS/2 was not merely incompetent, it was wildly and agressively incompetent. (The product itself, sadly, was far superior to the contemporanous Windows offerings in most respects.) Go read Jerry Pournelle about the difficulty, bordering on the impossibility, of a well-known computer journalist even finding someone from IBM willing to talk on background, much less on the record!

Calling IBM's OS/2 marketing folks "idiots" would be an unkind slam towards stupid people everywhere.

Posted by: Kirk Parker at February 28, 2004 1:00 PM

"MicroSoft has retarded the computer revolution and damaged every person on the planet thereby."

I gotta ask - what are you talking about?

Posted by: Robert Duquette at February 28, 2004 1:48 PM

Robert:

Are your parents or in-laws still alive? Ever have to help them with their PC? You wouldn't if they had Macs.

Posted by: oj at February 28, 2004 1:53 PM

My parents gave the internet a try last year, using a Mac that my sister had. They didn't care for the experience, and gave it up. When they need to talk to their children, they use the phone or write letters (good old snail mail). There is no way that I could conceivably say that their life has been damaged by not being computer users.

It doesn't surprise me that you would apply your apocalyptic religious fervor to technology. The entire world is at stake in the battle of Mac vs Windows. Do you feel the same in the Coke vs Pepsi wars?

Posted by: Robert Duquette at February 28, 2004 2:29 PM

Pepsi is evil.

Posted by: oj at February 28, 2004 2:36 PM

For once I agree with OJ. I think, (and I had some experience dealing with them) that Microsoft's sucess comes from a willingness to play consumer hardball in an industry where everyone else was either techie and unable to grasp the essentials of doing business, or, like IBM, still in the era when they were dealing with Fortune 500 customers.

Then came the anti-trust suit. Which the Government won. But, the trial judge was a jerk, and the trial lawyer decided to take the side of algore in the 2000 election. I don't think the adminsitration had a particularly ideological approach to this. It just became identified with gore. And got dumped, despite the fact that the Government's trial court victory was confirmed by a very impresive non ideological opinion by the DC Circut. And the government gave away those victories in bargaing out the consent decree.

Good news? yes. First: MS has never made money at anything other than PC software. It has been unable to extend its monopoly. Last week the WSJ had a big article on how everybody is now very leary in dealing with them becuase they are such pigs.

Second, Free software has continued to grow. At some point, it will overtake Windows, which is now a pretty static target. (next version over 2 years away). My browser, Mozilla 1.6, is free software that grew out of Netscape. It now is far better than Explorer. Tabbed browing, type ahead find, select and google, built in pop-up blocker and spam filter. A little techie to install. (you have to install your own plugins including Java), but well worth it.

Third, foreign countries anxious not to send money to MS and having issues like local language support, will push the development of alternative software, as will hardware companies such as Sun and IBM.

Finally, Bill Gates is not immortal, as MS has grown it has and will become more beauracratic and less agressive. In time it will be like GM not the Mongol Horde.

Posted by: Robert Schwartz at February 28, 2004 4:30 PM

Mr. Schwartz;

There is no doubt that Gates played consumer hardball against people who weren't really in the game in the early days. The combination of realizing the long term potential of software and treating it like a business was (IMHO) the key differentiator that put Microsoft on top. As you note, Gates competed with visionaries with no business sense on one side and staid, unimaginative businesses like IBM on the other.

However, consumer hardplay is not the same as criminality.

As for helping relatives with computers and the Internet, we do that using Windows systems without complaint or problems and way cheaper than using Apple stuff.

Posted by: Annoying Old Guy at February 29, 2004 12:57 AM

"As for helping relatives with computers and the Internet, we do that using Windows systems without complaint or problems and way cheaper than using Apple stuff."

Exactly! My parents would never buy a Mac anyhow, it is way too expensive. The internet revolution was made possible by cheap Wintel knockoffs. If it were up to Apple, the Web would just be a playground for overpaid tech weenies.

Posted by: Robert Duquette at February 29, 2004 10:49 AM

If Mac had become the dominant platform they'd be cheap.

Posted by: oj at February 29, 2004 1:02 PM

Why didn't Apple become the dominant platform? They had the lead when they stole the concept from Xerox but were too greedy with their closed concept. In fact they still are.

Gates was an aggressive capitalist. The amatuers had their clocks cleaned. Where has Steve Jobs given away his billions, er millions in humanitarian works?

No one likes the Yankees or the good old USA. Other's successes diminish the losers. Should the market place be redistributed or does the invisible hand really work?

I'm with A.O.G. on this one.

Posted by: Genecis at February 29, 2004 6:16 PM

Gates dishonored capitalism by his behaviot.

Posted by: oj at February 29, 2004 6:25 PM

Mac was late to the user-friendly internet game.
They may have finally gotten it right, but they
were definitely behind the curve in the early nineties.

In addition Microsoft has always marketed their
software development API more professionally.

Posted by: J.H. at March 1, 2004 10:52 AM

JH makes a good point. I once got on a Developer's list for Microsoft. It's like an entirely different company. Very solicitious, very flexible and very accomodating.

Posted by: David Cohen at March 1, 2004 7:42 PM
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