Microsoft’s Story Of Monopolization
Monopoly is a method by which a single organization or individual exercises complete control over a particular product or service and using this control to determine significantly the terms on which other individuals shall have access to it.
Lets take the example of software giant Microsoft. They control 90-95% of the PC market world wide. I think everyone will agree that they are the pioneers in the operating systems arena. They were instrumental in bring about the PC revolution. They literally brought the computer to every home. Microsoft is one of the most glorified companies of the century. They hire the world’s best talent and pay incredibly huge sums of money to their people and produce high quality products. But the company’s negatives and their unethical business practices were swept under the carpet, due to their enormous clout in their domain. Microsoft has absolutely no competitors in the operating systems domain. They have penetrated their product so much that consumers cannot think beyond a windows or Microsoft office.
Microsoft is definitely a success story; I have no doubts about that. But, along the way some of their business decisions were in the direction of monopolization. One such move was to tag their Internet Explorer along with the Windows OS kit. Microsoft was caught off guard during the internet age. They were pioneers in bringing computers to every desk. But, during the internet revolution it was a little startup called Netscape which came up with Netscape Navigator, where one can access real time content on the internet. Netscape was built using a java runtime environment. Microsoft was slow to wake up, but they came up with Internet Explorer. But, by then Netscape had established itself and controlled a good percentage of the market. Then, Microsoft tagged along Internet Explorer along with their Windows OS kit. Since, they had almost 100% market share in the operating systems domain, just added Internet Explorer to their windows OS kit. So, if you use a windows OS you will definitely use internet explorer. The US government alleged that this was done to eliminate the competitive threat posed by Netscape and SUN’s Java programming language. Microsoft argues that this action is a natural extension of the Windows environment and that it should not be faulted for providing a free program to all users. Microsoft argues that this reflects the dynamic and competitive nature of the software market. Critics of Microsoft argue that this was required only because of the reduction in Netscape’s market share as a result of Microsoft’s unfair trade practices. In the end the consumer is left with no choice but to use Internet Explorer.
Contrary to popular belief, Microsoft has not gained its enormous popularity through monopolistic and illegal measures, but instead through superior products. I feel that people do have brains, and therefore have the capacity to make rational decisions based on what they think is right. If people didn’t like the Microsoft operating systems, there are about a hundred other choices for operating systems, all of which have the ability to replace Microsoft if the people wanted them. But they don’t, the people for the most part want Microsoft operating systems. For this reason, Microsoft simply created products that the people liked, and the people bought them.
On the other side of the issue, are the people who believe that Microsoft is indeed operating in a monopolistic manner and therefore, the government should intervene and split Microsoft up. Those who are under the assumption that Microsoft should indeed be split up, believe that they should either be split into two separate companies: one dealing with operating systems and the other dealing strictly with applications. The other group believes that the government should further split Microsoft up into three divisions: one company to create operating systems, one company to create office applications, and one company to create applications for the home. All of these people agree that Microsoft should be split up, anyway possible
I have presented both sides of the coin here. Microsoft definitely was instrumental in the PC revolution. They are extremely innovative company that makes high quality software. But along the way they have bent a few rules and adopted a few smart but unethical policies to propagate their product. But I will say that Microsoft’s popularity is because they make high quality products and the consumers need not look else where. The competitors really cannot do much, to penetrate the Microsoft’s market simply due to the superior quality of their Operating systems.
I am Sriram Srinivas working for consumerdaddy website. We write many blogs and articles to create consumer awareness. Consumerdaddy is a leading consumer protection portal in India with consumer reports for over 40,000 companies and 200,000 products.
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