Comments (7)

• Manuel Lora

  I've been a very satisfied user of Firefox for quite a while. It's great to have a fully developed and standards-compliant browser that behaves the same way whether I am using Linux, Mac or Windows. The extention functionality is excellent (one of my favorite ones is flashblock).
  
  
  
  Microsoft seems to be heading in too many directions. Already they might have to push their next OS, Vista, until 2007.

  Published: May 4, 2006 10:45 AM

• Curt Howland

  When Internet Explorer was launched, Netscape was charging for their software (although it was an open secret that their ftp sites allowed anonymous login). So IE may very well have been slated as a money-maker in the future.
  

  Long before Windows95 and IE, I had noticed the "file://" header, and wanted to do more than just browse. The "file manager" functionality that IE has and Netscape/Firefox never did have is now something everybody takes for granted. The fact that that functionality cross-over was because of Microsoft "bundling" IE into the operating system is usually cited as Microsoft doing a "bad thing". But it wasn't bad at the time.
  

  The Konqueror application has gone even further with the idea, by making the "browser" modular. The same interface provides http, ftp, webdav, ssh, local file (view, move, rename, delete, create, etc) and lots more with a consistant look and feel. Exactly what made Internet Explorer attractive in its time.
  

  What has hurt Microsoft, what made IE nothing but a cost for them, is that while they were playing catch-up with Netscape, Netscape went free. At the same time, the same functionality was being duplicated and exceeded by different development teams around the world. Microsoft has held on to IE as it drags them down because Microsoft will not let go.
  

  Microsoft made their name and fortune(s!) by providing functionality on top of commodity hardware. Apple has always been behind Microsoft, because Apple wouldn't allow even commodity hardware. But now not only is the hardware a commodity, so is the "browser", and so is the Operating System itself.
  

  There are very few things Microsoft provides, for a substantial licensing fee, that aren't provided for little or no cost elsewhere. Even their real money-maker, "Microsoft Office", has had its basic functionality commoditized over time. 90%+ of the people paying good money for Office could spend nothing for OpenOffice.org and get everything they've ever used, or every will use.
  

  The management of Microsoft is not stupid, they know that they're doomed. Their own internal memos demonstrate this, just do a search for "Halloween Documents".
  

  The announcement of Vista was a tactic that was documented in their "monopoly" court cases. Microsoft would spot a trend, announce a product that they didn't have, and while they scurried to write it the software producers that would have been shipping theie producta already hit a wall of people saying, "We're going to wait until we see what Microsoft has to offer."
  

  Everything that Vista was supposed to provide already exists. It's just like saying, "I am looking forward to Vista Media Edition" when Apple already has all that, and MythTV and a few other easy to locate things running on Linux will do it too.
  

  Microsoft's most powerful tool, their marketing department, has ensured that a large number of people think what Vista will deliver will be new and different and special, so they don't look elsewhere.
  

  Apple did a very smart thing: Recognizing that the Operating System is a commodity, they built their OSX on the Berkeley Systems Division "Unix". With one decision, the vast majority of their OS software development costs were eliminated. So now it's easier to see that Apple is selling flash and splash, a pretty shell that works well on perfectly compatible, very pretty but expensive hardware.
  

  Microsoft is digging in, tooth and nail, trying to continue to make "monopoly prices" on commodity tools. Their effort with "Trusted Computing" is nothing more than an attempt to legislate their business model, to legally require everyone to run proprietary software.

  Published: May 4, 2006 1:51 PM

• Bill Ott

  And as usual, the millions of folks who interract together in a financial market know more than the hundreds of grandstanding bureaucrats. Microsoft stock price reflects this accurately.

  The sad part is that the money spent in the name of tax payers for these stupid monopoly lawsuits could have gone back to the tax payers for their use.

  So the only thing left is to have the US and EU anti-trust authorities put their heads in the sand collect their paychecks doing nothing which is better than their something.

  Published: May 4, 2006 4:05 PM

• David Veksler

  John Dvorak is a smart guy, but lately I get the feeling that he’s been spouting off crazy theories just to get attention. He’s been writing a “Microsoft is doomed� article every other week.

  I think creating IE was a good move. Microsoft made some smart decisions, like licensing the technology, and investing enough money to make it better than Netscape.

  More importantly, they integrated it with the operating system and established a leadership role in the formation of web standards that was important for many of their web properties and server-side products. (Microsoft invented AJAX in 1997 for their Exchange web UI.) Things might have worked out great if Sun hadn’t forced them to abandon Java, leading them to develop ActiveX with its horribly inadequate security model.

  Unfortunately, after IE dominated the market, Microsoft let it grow stale, mostly because it didn’t foresee the rise of open source. They’ve done a good job of turning things around lately with IE7. For that matter, Firefox probably wouldn’t even be a major player if Google didn’t see a competitive edge in it and support it.

  And if you think integrating the browser with the OS is bad –why is everyone, from Apple to Linux (KDE) to Google (one day) imitating Microsoft?
  

  Published: May 4, 2006 7:08 PM

• Curt Howland

  David, I'm not sure about your "Sun forced them to abandon JAVA" statement. Microsoft was playing their tried-and-true method of "embrace, extend, extinguish" on JAVA, and Sun reacted by telling Microsoft to go suck eggs. If Microsoft was going to "extend" JAVA, then Microsoft was going to have to give up pretending it was JAVA.
  

  I couldn't agree more about "integrating with the OS except that that's not what the Apple and Linux based applications do. The Konqueror, to expand upon your KDE cite, is not just a file *browser* like Netscape=>Firefox, it's a file *manager* as well as an html browser.
  

  What Microsoft did was replace their internal graphical file *manager*, "Explorer", with "Internet Explorer" which built upon the same interface style. Indeed it was a good move, and I don't fault them at all for doing that. I'm using one tab of Konqeror as a file manager locally, one tab is a file manager through SSH to a server, and three more tabs to various internet sites including Mises.org.
  

  What I object to was their making Internet Explorer so much more than just another application. In order to reduce any perceived delays in program launching or function, they hooked I.E. into their Windows kernel as a kernel process. Apple, KDE, don't do that, the browser is just another application. These hooks are the root cause of the inherent security nightmare that is I.E. Where if Konqueror had a hole in it the same as I.E. a cracker might get to run a program as that user, in I.E. any crack is right there at the kernel by default.
  

  Considering that Netscape and the NCSA browser were browsing local files in the years before Win95 (and remember it was 6 months after Win95 that Internet Explorer was available), specific features might be playing leap-frog but Microsoft didn't "invent" anything. They just brought file "browsing" and file "managing" under one application, which was a good thing and bound to happen eventually anyway.

  Published: May 4, 2006 9:55 PM

• Anon On This One

  All but the smallest bit of the industry hype is nonsense, and why the management responds to it, still eludes me -- other than the simple political advantage that keeps politicians thinking that they have competitors, or to stop employees from being distracted and possibly recruited. IBM has always been, and always will be, Microsoft's only meaningful competitor. The revenue in the company comes from a particular pool, especially the revenue that they can influence, so much so, that they must effectively imitate IBM's market position, and the cost of changing that fact is an impossible task. It is just impossibly expensive to affect consumers and small business consumers unless you treat the product as a mass market consumer product, and that kind of advertising is necessarily insulting to consumers.

  Instead, the company's problem is better categorized as a problem of economic calculation in both the Misesian and Hayekian senses:

  It is extremely difficult to innovate at Microsoft. The organizations consist of, rather than sixty really smart people, ten smart people surrounded by three hundred average people.

  The product suite is highly complex and interdependent creating a quality problem that only self organizing systems can solve. There are mathematical barriers at play with products of this complexity, and they are hitting them.

  The product set and the concepts behind it are mature. They are running out of features that can compel users to buy new software, and that is something that they have been dreading for many years, and that's the reason they want XBox to be in everyone's living room. They will soon add Media Center to Xbox and we will then have the option of DVR's and game consoles from microsoft.

  People in the company have a great deal of money to spend and there is little penalty for doing it poorly. (The equivalent of Fiat money)

  Because Windows and office are effectively a property that the company rents, and because almost all other products lose money, and exist only to keep the rental property in demand, no one in the organization can be measured by traditional means of profitable performance.

  Because they do not sell the product directly, and are effectivly prohibited from collecting information about consumers from their computers, they do not know their customers, and the weakness of the internal customer data is why they market so poorly. They want to do a better job, but they can't. They don't know who they're talking to.

  In this environment, it is not possible to develop strategies for determining what is a good or effective action or not. It is not possible for people to have an objective means of agreeing in order to cooperate on long term objectives.

  The pace of change and pressure of revenues makes the company's sales and marketing organizaiton think incredibly short term. On the order of weeks and months. Yet they must run many campaigns that address small market segments because advertising does not sway customers.

  Research and development of the kind that will actually provide incremental value is now far more expensive than in the past, despite improvments in tools, the problems are far harder to solve now. For example, the new storage system is an incredibly difficult problem to solve. Or rather, to solve in a way that will be meaningful to home users as well as technical users.

  There has been a human capital flight that is largely caused by these factors, as well as the fact that windows is not a consumer product and young talent chases consumer technologies because they give them esteem with their peers. A lot of this flight has been to google, but many others, including startups have attracted the talent. I must have counseled thirty people last review cycle who were exceptional and wanted to leave the company. Some of these people are visionary. One at least may change the face of computing in the next decade.

  The company has become a large political bureaucracy where innovation is impossible.

  As such, like a socialist bureaucracy, there is no means of decision making save politics. This is why the company can function if they have a competitor, and not if they do not. (The Destruction of common knowledge and resulting impact on decision making)

  The primary reason that all of this happend was government intervention. First, they were sued by temporary workers. Second over IE and Windows. This caused Gates to move out of the company to reduce his visibilty. This in turn reduced his ability to affect the product line, as his approval was the only measure of success in the company. The company has gone from innovators to bureaucrats who maximize the company's return on it's leasholding property: windows and office.

  Most of the company's sins are not created by some vast conspiracy, and to insiders the idea is laughable. You cannot get three people inside the company to agree on anything, and you never could, unless Gates said you should.

  During the period of extended growth, they hired very young and motivated people who did not have the time to build normal, ethical industry experience in a way that would guide their judgement from experience, and they were not surrounded by people who they could learn from. Everyone was young, filled with mission, wealthy, and making it up as they went along. Analogies to our broader economic and political system are painfully obvious and informative.

  The company is largely decentralized. Even now, divisions fight as if they are competitors.

  With all these factors at play, it is not possible for employees to get ordinary work done, and they certainly cannot perform innovation, for the same reason that it is not possible for countries to prosper under socialism.

  Instead, it's errors come from the fact that it is not a company but a country, and not a capitalist state, but a socialist one run amuck, with all the failings thereof. It is an example of the destruction of economic calculation on a large commercial scale. It is another illustration of Austrian in the mini-economy that is Microsoft.

  At a more tactical level, the company's problem is that Gates is no longer the icon that everyone wants to please, and the ultimate critic for their products. They hope Ozzie will fix this for them. This loss of Gates' leadership, the maturation of the product set and the industry, the dependency on large business for revenues (that they can influence), the inability of employees to perform economic calculation, the reliance on political, and even potentially ideological structures for decision making, the government interference and boom-hiring that diluted the worker pool, have all created an organization that is not fun to work in, where people do not have the ability to succeed, and where, because of this, innovation of any nature is smothered by a sea of the inadequate. They feel that they cannot fix the problem because layoffs will attract doomsayers and criticism, so they are trying to isolate these people and bring in external management from traditional bureaucracies.

  This will not lead to innovation, but to a maximization of return on the leashold by decreasingly capable people, and microsoft will become what IBM was in the 80's. What replaces them is unknown, and it may be possible that they will endure enough pressure to change but currently, because they are laregely a sales and marketing organization, and most of the company leaders are from sales or finance, or operations or marketing, this process will continue to be reinforced by the general culture for the forseeable future.

  Cheers
  

  Published: May 4, 2006 11:36 PM

• anarkhos

  This would only be a blunder from MS's perspective if people would stop buying Windows.

  So far, the only blunder is not coming out with the next Windows version, Vista, which the sheeple will buy regardless how crappy it is.

  Published: May 4, 2006 11:45 PM