Dear Bill and Joel:
Here we are in the year 2000, and just as the personal computer industry is entering its third (and perhaps most critical) decade, the government is about to break up what is arguably the industry's most important company.
Perhaps the government thinks it can reshape the industry and make it better than the business executives who created it in the first place. Perhaps its all simply an honest attempt to "level the playing field."
The private sector's response to the Microsoft anti-trust case has been spirited, but hardly an endorsement. Consider the stock market -- Microsoft stock, which had been priced in the $120 to $140 range several months before the decision is now trading at half that value. And it's dragged the rest of the tech sector down with it. I'm sure you're both glad you don't work for a start-up "dot-com" company (where people are probably using Microsoft Word to update their resumes).
How many millions in direct holdings, 401K savings and mutual fund investments have been lost in the past three months (all in the name of helping the consumer)?
Mind you, I'm not suggesting that Microsoft is an innocent, persecuted party being unfairly singled out by a vindictive government. Bill, you brought this upon yourself. How? Here's how:
- By making the MS Internet Explorer browser part of the operating system. This, in my judgment, was one of the dumbest ideas of all time (more on this below).
- By forcing computer manufacturers to put a copy of Windows on every machine they built -- whether or not they (or their customer) wanted it. I know you did this to kill OS/2 and other potential threats, but -- just as fallout from an atomic explosion eventually circles the Earth and rains down upon the nation that launched the attack -- you're now paying the price for your victory.
- By using the leverage (and profits) Windows gave you to under-price your competition in other software markets (word processing, spreadsheets, etc.) thus forcing competitors to cannibalize their operations in order to stay in business (just look at what’s happened to WordPerfect and Borland).
Bill, to put it bluntly, you're not a nice guy. Of course, in business who has to be nice, right? Isn't the point of being in business to drive your competition out of business?
What the government fails to realize (Joel, are you still paying attention?) is that the computer industry is inherently monopolistic. Since software (up until now) has been written to run on one (and only one) operating system, people who want the broadest choice of software will buy the most popular OS. Eventually, this momentum will make the most popular OS (barring any catastrophes) a de-facto monopoly. This is why Windows OS machines outsell Macintosh computers.
But when you run the monopoly (and Bill, I think we all know that you're running a monopoly) you've got to play by different rules. Bill, you won the war. It's time to stop being the conquering general and start being the wise and fair king. The reason the government has come down upon you is that you couldn't get out of "slash and burn" mode.
So, where do we go from here? God help us if the government follows through on its threat to break up Microsoft. If that happens the computer industry will be thrown into turmoil. And every other business will fear government intervention in their industry (is this what you want, Joel?).
My guess is that we'll never actually see a breakup. The case will drag out in court. Resources and talent will be sapped away from development of successors to Windows 2000. Meanwhile, Linux will grow in popularity and ease of use. Eventually it will migrate from computer IS departments to user desktops, and people will want to use at home the OS they use at work.
Microsoft will emerge from the battle bloodied, weakened but with all its limbs intact.
Let's all agree right now to save time and money. Here are my recommendations to deal with the problem:
- Microsoft should release the Windows 98 source code and declare it to be in the public domain. Microsoft, and any other company that so wishes, may publish and sell an OS based upon this code.
- Microsoft will sever the links between MS Internet Explorer and Windows. This union has never worked the way Microsoft envisioned anyway. Most users still use MSIE as if it were a stand-alone application and don't use (or even know about) the integrated features. Besides, I can't tell you how many times upgrading (or changing) MSIE has screwed up my OS. MSIE may still be bundled with Windows, but it will work as a stand-alone product. Computer makers may also install any browser they wish on the Windows desktop.
- Microsoft will not engage in practices deemed to have been monopolistic by Judge Jackson with Windows 2000 or future versions of the OS.
- The government will not pursue a break-up of Microsoft. The government shall continue to monitor Microsoft's compliance with the above conditions.
- The attorneys general of our glorious 50 states will not pursue lawsuits of their own against Microsoft for its past practices. These officials should focus on punishing criminal attempts to cheat consumers rather than launch lawsuits over software bugs or otherwise persecute honest businesses that are simply trying to maximize profits. If citizens think they're being charged too much for a program let them buy a competitor's software.
I know some folks will say the above ideas are pretty simplistic. Bill, you'll probably say this is a pretty bitter pill. I know you think in this free country you should be able to run your business any way you see fit, but freedom must be accompanied by responsibility. If you act in an irresponsible manner you must pay the consequences.
Similarly, responsible behavior will be rewarded. You are a remarkable man and your company is a national treasure, but you must wield your power and influence wisely. You have the power to shape the technologies of the next century. It's time to stop acting like a cutthroat businessman and behave like the leader you truly are.
Thank you, gentlemen, for considering my humble thoughts.
Jill
