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Why the Unbundling Windows Sceptics are Wrong
If nothing else seems to convince you that the personal computer market needs a competition boost, then all you need to consider is that one company, Microsoft, has had a 90-95% market share position for perhaps 20 years. What other large, hugely lucrative and business-critical markets do you know where one incumbent has that size of market share for that length of time? It is the surest indication that the free market has been waylaid and needs assistance. It's time to set the wheels in motion to stop this egregious aberration. |
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Comments (76)
Coercion
40 earlier comments in the full thread.
>If they go back to their old abuse of monopoly ways once the agreements expire, at what point is it appropriate to take the tools of their monopoly away from them?
At the point a new action has been taken against them and they have lost again.
Obviously, surrendering some or all of their patent portfolio could enter into settlement negotiations.
At the point a new action has been taken against them and they have lost again.
Obviously, surrendering some or all of their patent portfolio could enter into settlement negotiations.
> At the point a new action has been taken against them and they have lost again.
I don't think anyone here is arguing that due process be ignored. Merely what penalties would be appropriate.
I don't think anyone here is arguing that due process be ignored. Merely what penalties would be appropriate.
>I don't think anyone here is arguing that due process be ignored.
I'm not so sure. We seem to have a little desire for eternal punishment.
I'm not so sure. We seem to have a little desire for eternal punishment.
Quoting:However, they don't have to be, since it would only save them money for juridical costs.
There would be fallout. Microsoft (and a lot of other companies) would have to explain to their shareholders why the company invested XXX millions into buying up and registering patents and how all those umpteen millions have now gone up in smoke.
The patent system favours the big guys. MS pays out millions to people bringing patent suits but it also gets many millions from licensing and suing themselves. Contrast that to the little guy who hold no patents or just a few. They still have to pay out massively to other patent holders but have very little chance of making money off their own patents. Unless they are lucky enough to have a killer patent and a target with wads of cash (e.g. Eolas).
Software patents make the big player stronger at the expense of the little guys. Scatch "software" because it holds true for nearly all patents related to technology (and that's most of them). Technology is simply moving too fast. What's innovative and high-end now is food for "Basic Engineering Principles 101" a few years from now. If this goes on then it won't be long before things we consider (by then) to be basic, to have another 10 years of patent protection in them. How are you going to innovate if you need to license 600 different patents just to get the basics done?
Parent reform: Scrap software patents and reduce the length of all other patents to five years. That's what I'd like to see.
> ...explain to their shareholders why the company invested XXX millions into buying up and registering patents and how all those umpteen millions have now gone up in smoke.
Actually, this is one of my talking points for anarchy.
So long as Congress is in session, the legal landscape can change on a whim. Ok, ~268 whims. It retards long-term investment and promotes the boom-bust cycle and "rent seeking" by vested interests.
But back on topic, they explain it the same way they explain the explosion of unforcasted costs to comply with SarbOx: It's not our fault, they changed the laws on us.
Actually, this is one of my talking points for anarchy.
So long as Congress is in session, the legal landscape can change on a whim. Ok, ~268 whims. It retards long-term investment and promotes the boom-bust cycle and "rent seeking" by vested interests.
But back on topic, they explain it the same way they explain the explosion of unforcasted costs to comply with SarbOx: It's not our fault, they changed the laws on us.
Quoting:It's not our fault, they changed the laws on us.
That's a bit hard to say to your shareholders if you welcome or encourage the abolishment of software patents. Now that umpteen millions have been invested, they just have to defend them. Unless they find a very good reason not to (e.g. when they are paying out more then they are generating revenue. Something that's unlikely for a big company with lots of patents).
> > It's not our fault, they changed the laws on us.
> That's a bit hard to say to your shareholders if you welcome or encourage the abolishment of software patents.
Oh, I don't think Microsoft would do anything of the sort, which is why I wrote before, ...
[me] That would be fun just from the standpoint of watching as Microsoft pulled out all the stops to defend them.
$40B (or is it $50B by now?) is a LOT of stops.
Oh, I don't think Microsoft would do anything of the sort, which is why I wrote before, ...
[me] That would be fun just from the standpoint of watching as Microsoft pulled out all the stops to defend them.
$40B (or is it $50B by now?) is a LOT of stops.
>Software patents make the big player stronger at the expense of the little guys.
Patents actually level the playing field in many cases, giving little guys a weapon against the big guys.
Does anybody remember the first big patent news involving Microsoft? They were sued by Stac Electronics for infringing their disk compression patents. They lost and paid out a rather tidy (for the time) sum in the neighborhood of $50,000,000.
Or the $9,000,000 they were ordered to pay to a Guatemalen inventor in 2005?
Just two months ago, Microsoft negotiated to settle a $500 million patent infringement judgment in favor of that IT heavyweight Eolas Technologies.
Patents actually level the playing field in many cases, giving little guys a weapon against the big guys.
Does anybody remember the first big patent news involving Microsoft? They were sued by Stac Electronics for infringing their disk compression patents. They lost and paid out a rather tidy (for the time) sum in the neighborhood of $50,000,000.
Or the $9,000,000 they were ordered to pay to a Guatemalen inventor in 2005?
Just two months ago, Microsoft negotiated to settle a $500 million patent infringement judgment in favor of that IT heavyweight Eolas Technologies.
Quoting:Patents actually level the playing field in many cases, giving little guys a weapon against the big guys.
There's a difference between a single individual and a group of individuals[*]. Software patents may benefit a single individual against a big corporation, but if you looks at the average of a group of individuals against that same corporation it may not be a benefit at all. I.e. Microsoft pays 9 million to an individual inventor, but a group of 100.000 individuals working in the same field pay on average $500 to Microsoft for various hoarded patents in that field. The individual wins out but the group on a whole looses out by $41 million.
[*] For example, when you meet an individual, it's usually a rational and pretty smart being. But people as a group tend to be rather stupid.
Sander -
Huh? I didn't follow your post at all.
Huh? I didn't follow your post at all.
Dino, I read Sander as putting numbers on what I've been saying is an attribute of such grants of monopoly that patents represent: focused benefits and distributed costs.
That is the primary reason arguing against patents is difficult. It's easy to find the winners, even while we all lose.
That is the primary reason arguing against patents is difficult. It's easy to find the winners, even while we all lose.
Indeed, research of the university UNU-MERIT shows software patents stifle IT-innovation.
>Indeed, research of the university UNU-MERIT shows software patents stifle IT-innovation.
It's hard to know what to make of such a study though, because, even if one presumes it is possible for some piece of software to meet the novelty, etc, requirements for a patent, the vast majority of software patents do not.
As the US Supreme Court correctly noted, using an obviousness test that essentially presumes practitioners to be dolts has a negative impact on innovation, not to mention plain old day-to-day work.
It's hard to know what to make of such a study though, because, even if one presumes it is possible for some piece of software to meet the novelty, etc, requirements for a patent, the vast majority of software patents do not.
As the US Supreme Court correctly noted, using an obviousness test that essentially presumes practitioners to be dolts has a negative impact on innovation, not to mention plain old day-to-day work.
dino,
I think Sander is talking about an economy of scale. The more employees a patent violator has, the easier it is to "spread out" the patent violation fine through corporate expenses.
In other words, once a company gets to be so big, patent violations become "business as usual," something to be figured into the annual budget.
I think Sander is talking about an economy of scale. The more employees a patent violator has, the easier it is to "spread out" the patent violation fine through corporate expenses.
In other words, once a company gets to be so big, patent violations become "business as usual," something to be figured into the annual budget.
>In other words, once a company gets to be so big, patent violations become "business as usual," something to be figured into the annual budget.
Umm...no.
Several things happen:
As the company becomes bigger, the scale of the infringement tends to increase and the penalties with it.
If patent violations become "business as usual", the company either knowingly infringes or is recklessly indifferent to infringement. In that case, a court can award treble damages. Not fun to pay three times what something should have cost you.
Bigger companies tend to have a messier time defending themselves. That means very expensive attorney's fees. Worse, in a case of willful infringement, they can be ordered to pay the other side's very expensive attorney's fees.
Finally, in addition to damages, the court can order the company to stop its infringing activities, with the potential for significant disruption.
Umm...no.
Several things happen:
As the company becomes bigger, the scale of the infringement tends to increase and the penalties with it.
If patent violations become "business as usual", the company either knowingly infringes or is recklessly indifferent to infringement. In that case, a court can award treble damages. Not fun to pay three times what something should have cost you.
Bigger companies tend to have a messier time defending themselves. That means very expensive attorney's fees. Worse, in a case of willful infringement, they can be ordered to pay the other side's very expensive attorney's fees.
Finally, in addition to damages, the court can order the company to stop its infringing activities, with the potential for significant disruption.
Quoting:I think Sander is talking about an economy of scale. The more employees a patent violator has, the easier it is to "spread out" the patent violation fine through corporate expenses.
No. Bob had a better interpretation of my point: The benefits of the patent system are concentrated on the big corporations with large portfolios. It's a tax on the rest of us. The occasional lone individual that does benefit from a worthwhile patent does not make up for the taxation on the rest of the individuals. On average, the group of individuals is still worse off.
Quoting:The benefits of the patent system are concentrated on the big corporations with large portfolios.Agreed. And, sadly, that's directly inverse to the system's intended purpose. What is it they say about unintended consequences?
Speaking of patents, one of the most recent Nobel Prize winners has actually been doing work on software patents and intellectual property more generally (one paper was linked on Slashdot I think).
http://www.researchoninnovation.org/WordPress/?p=83
http://www.researchoninnovation.org/WordPress/?p=83
> What is it they say about unintended consequences?
http://www.mises.org/econsense/ch7.asp Making Economic Sense by Murray Rothbard The Consequences of Human Action: Intended or Unintended? Chapter 7
And...
http://www.mises.org/journals/rae/pdf/rae10_2_5.pdf "Unintended Consequences" In the vernacular is nothing but a cop out, a deus ex machina that disguises the true source of failed public policy - a refusal to appreciate the full implications and ramifications of public policy initiatives for human action.
http://www.mises.org/econsense/ch7.asp Making Economic Sense by Murray Rothbard The Consequences of Human Action: Intended or Unintended? Chapter 7
And...
http://www.mises.org/journals/rae/pdf/rae10_2_5.pdf "Unintended Consequences" In the vernacular is nothing but a cop out, a deus ex machina that disguises the true source of failed public policy - a refusal to appreciate the full implications and ramifications of public policy initiatives for human action.
Good idea. Good arguments. Wrong solution.
The article is quite good, but it misses the mark on the proposed solution:
[quote]All hardware manufacturers should ship personal computers with no pre-installed operating system. They should include within the packaging of the computer a media copy of the then current Microsoft Windows recovery CD. They should also include a copy of one of the main Linux distributions which are freely-redistributable at no charge.
Upon unpacking the computer, the consumer must then make a choice of either[quote]
Not necessary and burdensome for the consumer. Hardware manufacturers should still be able to pre-install Windows and sell it. Unbundling doesn't mean not preinstalling anymore. It means you have to make a conscious choice and pay the hardware manufacturer for the service of installing it. E.g:
======================================== Order form step 2 of 3
Computer XYZ with hardeware ABC: $399
Operating system: [ ] Microsoft Windows OEM $89 [ ] Anti virus software $59 [X] Ubuntu Linux Feisty Fawn $0 Anti virus not required [ ] No operating system $0
[X] Preinstall this operating system: $20 [X] One year OS phone support: $50
Total: $469 Continue >> ========================================
The point is that you have to make a choice to get Windows. You don't get it automatically. And if the OEM's are smart they can charge for the additional service of preinstalling it and boost their margins.
[quote]All hardware manufacturers should ship personal computers with no pre-installed operating system. They should include within the packaging of the computer a media copy of the then current Microsoft Windows recovery CD. They should also include a copy of one of the main Linux distributions which are freely-redistributable at no charge.
Upon unpacking the computer, the consumer must then make a choice of either[quote]
Not necessary and burdensome for the consumer. Hardware manufacturers should still be able to pre-install Windows and sell it. Unbundling doesn't mean not preinstalling anymore. It means you have to make a conscious choice and pay the hardware manufacturer for the service of installing it. E.g:
======================================== Order form step 2 of 3
Computer XYZ with hardeware ABC: $399
Operating system: [ ] Microsoft Windows OEM $89 [ ] Anti virus software $59 [X] Ubuntu Linux Feisty Fawn $0 Anti virus not required [ ] No operating system $0
[X] Preinstall this operating system: $20 [X] One year OS phone support: $50
Total: $469 Continue >> ========================================
The point is that you have to make a choice to get Windows. You don't get it automatically. And if the OEM's are smart they can charge for the additional service of preinstalling it and boost their margins.
Quoting:..............Upon unpacking the computer, the consumer must then make a choice of either
Sander: Not necessary and burdensome for the consumer................
The example you've given is, as far as I can tell, what the EU body that put the idea forward has in mind - there's an article on lxer somewhere about it.
The argument that the computer hardware would be sold without software is, I think typical Microsoftian FUD.
Being able to select what goes into your computer, hardware and software, should be the right of every computer purchaser.
>The point is that you have to make a choice to get Windows.
I think it's heading that way for manufacturers like Dell who fulfill online orders on a machine by machine basis. I'm not so sure about big box stores where a lot of Americans buy their PCs.
It could be argued that you make a choice to get Windows by buying a Windows PC instead of a Mac or a white box.
BTW --
How does Mac fit into all this? I'm not aware that you get any choice of OS when you buy one of their PCs.
I think it's heading that way for manufacturers like Dell who fulfill online orders on a machine by machine basis. I'm not so sure about big box stores where a lot of Americans buy their PCs.
It could be argued that you make a choice to get Windows by buying a Windows PC instead of a Mac or a white box.
BTW --
How does Mac fit into all this? I'm not aware that you get any choice of OS when you buy one of their PCs.
> It could be argued that you make a choice to get Windows by buying a Windows PC instead of a Mac or a white box.
I consider it as such. Sadly, so much effort is being wasted bashing Microsoft rather than advertising the alternative(s). Hooray for the Tux Racer effort and other adverts, I'd rather "win" this "war" by being better than by having bigger guns.
> How does Mac fit into all this? I'm not aware that you get any choice of OS when you buy one of their PCs.
According to the article, since Apple supplies both the hardware and software, they're absolved from the requirement, in the same way that Microsoft could offer a Microsoft PC with only Microsoft software preinstalled and not be "bundling" by their definition.
I consider it a convenient rationalization in spades, because they _like_ Apple and don't _like_ Microsoft.
I consider it as such. Sadly, so much effort is being wasted bashing Microsoft rather than advertising the alternative(s). Hooray for the Tux Racer effort and other adverts, I'd rather "win" this "war" by being better than by having bigger guns.
> How does Mac fit into all this? I'm not aware that you get any choice of OS when you buy one of their PCs.
According to the article, since Apple supplies both the hardware and software, they're absolved from the requirement, in the same way that Microsoft could offer a Microsoft PC with only Microsoft software preinstalled and not be "bundling" by their definition.
I consider it a convenient rationalization in spades, because they _like_ Apple and don't _like_ Microsoft.
Quoting:I'm not so sure about big box stores where a lot of Americans buy their PCs.
I am quite sure that the think tank that proposed the unbundling also wants to see it in the high street shops. After all, how long does it take to ghost a default OEM installation on a hard disk? 10-15 minutes maybe? It's really just a matter of how fast your CD/DVD reader is and how fast your hard drive can write. Plus, the shops could keep a few pre-ghosted machines in the back so a cusomer does not have to wait if he wants a machine with an OS preinstalled.
What it all comes down to is that the cosumer has to say he wants Windows with it and realizes that it costs him another $60-$200 extra - on top of the hardware. It's an option. And by default it's "off".
>After all, how long does it take to ghost a default OEM installation on a hard disk? 10-15 minutes maybe?
In the US, you start falling all over the intent of antitrust laws when you say things like that. In-store configurability means extra cost and extra time for stores that are intended to be cheap and convenient. Not sure there's a consumer benefit there.
In the US, you start falling all over the intent of antitrust laws when you say things like that. In-store configurability means extra cost and extra time for stores that are intended to be cheap and convenient. Not sure there's a consumer benefit there.
Well, they sell ghosted computers right now, don't they? It's just that they're all ghosted with the same OS. It all boils down to inventory management 101. Estimate your demand and stock X Windows PCs. Y Linux PCs and Z no-OS PCs. And the nice thing here is that if you estimate wrong, you can re-ghost a machine instead of disappointing the customer with an out-of-stock.
Plus I bet that if I walk into one of those stores and say "I want this PC but with an extra 250 GB drive in it. Here's money for the computer, the drive and the service of putting it in" that they won't turn me down. They already do in-store configurability. For a price. The OS is just another part, just like an extra hard drive or a video card upgrade.
Plus I bet that if I walk into one of those stores and say "I want this PC but with an extra 250 GB drive in it. Here's money for the computer, the drive and the service of putting it in" that they won't turn me down. They already do in-store configurability. For a price. The OS is just another part, just like an extra hard drive or a video card upgrade.
> They already do in-store configurability. For a price.
That depends entirely on the store. The WalMart/Sams/CostCo/Target/Kmart stores do not. You buy the Dell/Gateway/Compaq/HP that is in the sealed box, pre-packaged and cookie-cutter. If you want a bigger HD, at best they're on that shelf over there. Have fun.
CircuitCity/BestBuy/etc already charge a premium, but the bulk of their sales are still factory sealed boxes. Take a card up to the check-out counter, someone will bring you your PC to you.
Price pressure is so great that the makers don't even include recovery CDs any more.
That doesn't mean the _couldn't_ provide a boot DVD that would put an OEM-perfect ghost image of your choice of OS on the disk when you get home, just that the first thing people want to do when they get home is use the machine, not spend an hour leaving the machine plugged in and alone.
Preinstallation is an issue, in my opinion, because preinstallation is a selling point.
I'd be thrilled if they let me put Knoppix of PCLinuxOS disks out for free, but the stores don't want the liability for someone maybe erasing their HD by "mistake".
That depends entirely on the store. The WalMart/Sams/CostCo/Target/Kmart stores do not. You buy the Dell/Gateway/Compaq/HP that is in the sealed box, pre-packaged and cookie-cutter. If you want a bigger HD, at best they're on that shelf over there. Have fun.
CircuitCity/BestBuy/etc already charge a premium, but the bulk of their sales are still factory sealed boxes. Take a card up to the check-out counter, someone will bring you your PC to you.
Price pressure is so great that the makers don't even include recovery CDs any more.
That doesn't mean the _couldn't_ provide a boot DVD that would put an OEM-perfect ghost image of your choice of OS on the disk when you get home, just that the first thing people want to do when they get home is use the machine, not spend an hour leaving the machine plugged in and alone.
Preinstallation is an issue, in my opinion, because preinstallation is a selling point.
I'd be thrilled if they let me put Knoppix of PCLinuxOS disks out for free, but the stores don't want the liability for someone maybe erasing their HD by "mistake".
Quoting:The WalMart/Sams/CostCo/Target/Kmart stores do not. You buy the Dell/Gateway/Compaq/HP that is in the sealed box, pre-packaged and cookie-cutter.
And without an OS pre-installed, or with a ghosting/recovery CD in the box (which you pay for separately).
Quoting:Preinstallation is an issue, in my opinion, because preinstallation is a selling point.
All the more reason to go shop at your local computer store where they do preinstall your OS of choice. And put in that extra harddrive you wanted while they're at it. Wallmart can adapt. Fox example, they can stock computers with different OSes installed. And I am sure a whole host of different and ever more creative solutions can be found.
Preinstallation isn't a unique selling point today because everything comes preinstalled with the same thing: Windows. It's not a differentiator. It's just convenience to the customer.
Sure, unbundling does have it's problems, and some type of stores will have to adapt more then others, but the advantages far outweight the downsides in my mind.
Besides, we don't have Wallmart-like stores here in Europe and this is a European proposal, not a US proposal. The closest thing would be the French hypermarkets and they are more like overblown grocery stores.
>All the more reason to go shop at your local computer store where they do preinstall your OS of choice.
You'll get no argument from me.
>but the advantages far outweight the downsides in my mind.
That's the nasty thing about freedom. It doesn't mean anything in the absence of alternatives. The presence of alternatives implies the presence of things that don't make much sense in your mind.
You'll get no argument from me.
>but the advantages far outweight the downsides in my mind.
That's the nasty thing about freedom. It doesn't mean anything in the absence of alternatives. The presence of alternatives implies the presence of things that don't make much sense in your mind.
> And without an OS pre-installed, or with a ghosting/recovery CD in the box (which you pay for separately).
Walmart will not sell a computer that won't work out of the box. They know their demographic, and they know that requiring them to install an OS will result in a 98% return rate.
> All the more reason to go shop at your local computer store where they do preinstall your OS of choice.
In my case, all the more reason to order a barebones unit, assemble it, and install the OS myself.
Walmart will not sell a computer that won't work out of the box. They know their demographic, and they know that requiring them to install an OS will result in a 98% return rate.
> All the more reason to go shop at your local computer store where they do preinstall your OS of choice.
In my case, all the more reason to order a barebones unit, assemble it, and install the OS myself.
> Preinstallation ... It's just convenience to the customer.
Exactly. People pay a great deal, in both treasure and mind-share, for convenience.
> unbundling does have it's problems, and some type of stores will have to adapt more then others, but the advantages far outweight the downsides in my mind.
Then go right ahead and buy "unbundled". Why force everyone else to do the same?
For some people, those downsides will be greater than the benefits. When Mussolini was setting up his "Fascism", one of the big arguments he used was the elimination of "wasteful" duplication of effort. It is a very persuasive argument, on its surface.
Exactly. People pay a great deal, in both treasure and mind-share, for convenience.
> unbundling does have it's problems, and some type of stores will have to adapt more then others, but the advantages far outweight the downsides in my mind.
Then go right ahead and buy "unbundled". Why force everyone else to do the same?
For some people, those downsides will be greater than the benefits. When Mussolini was setting up his "Fascism", one of the big arguments he used was the elimination of "wasteful" duplication of effort. It is a very persuasive argument, on its surface.
Quoting:Walmart will not sell a computer that won't work out of the box.
Then they'll need to stock up. Of find another creative solution.
Quoting:Then go right ahead and buy "unbundled". Why force everyone else to do the same?
Unbundled does *not* mean that an OS cannot be preinstalled. Which has been my point in this entire thread. Just that Joe Consumer has to make an active choice as to *what* gets preinstalled. And at what price.
>Just that Joe Consumer has to make an active choice as to *what* gets preinstalled. And at what price.
In the US, Joe Consumer does that every day. Walking into Best Buy to pick out a computer is an active choice as is assembling a machine off zipzoomfly.
In the US, Joe Consumer does that every day. Walking into Best Buy to pick out a computer is an active choice as is assembling a machine off zipzoomfly.
> Walking into Best Buy to pick out a computer is an active choice as is assembling a machine off zipzoomfly.
Seconded. People _act_. They are not flatworms or rocks.
> Then they'll need to stock up. Of find another creative solution.
Or their most likely solution: Not sell computers at all.
Or their most likely solution: Not sell computers at all.
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How much litter and how many times, Dino?
Suppose the "litter" were radioactive waste? Would that make a difference?
Microsoft's monopoly has not been remedied by the agreements. Microsoft's behavior has been, but to date they've shown no signs that they've actually changed. If they go back to their old abuse of monopoly ways once the agreements expire, at what point is it appropriate to take the tools of their monopoly away from them?