Frankly, I hope not
|
| Author | Content |
|---|---|
| softwarejanitor Apr 27, 2009 1:52 PM EDT |
I hope that "Windows 7" goes over as well as "Windows Vista". While I don't think it is necessary for Microsoft to completely go away, I'd like to see a world with real competition, and I don't think that happens when any vendor controls more than 50% of a market. Consumers do weird things when monopolies exist in markets. I would be much happier if no entity controlled more than 40% of a market. Even if Linux was the most popular OS, I'd still want the BSDs and other competition to be around (maybe even room for a proprietary OS or two like MacOSX or even Windows). And if Linux was dominant, I'd certainly want no single distribution to have a market share such that they became an 800lb gorilla. |
| jdixon Apr 27, 2009 2:19 PM EDT |
> I'd like to see a world with real competition, and I don't think that happens when any vendor controls more than 50% of a market... That's not a given. Many times a vendor can control two thirds of a market and there still be competition. There are more variables involved than simple market share. |
| softwarejanitor Apr 27, 2009 2:28 PM EDT |
You are right, it isn't always that simple, but generally if a vendor controls 2/3 of a market then the pressures on the minority competitors are huge. The dominant competitors can do all sorts of things to make life hard for the smaller players. Examples like Intel vs. AMD and everyone else for the microprocessor market abound. While there is competition, its very fragile. |
| Bob_Robertson Apr 27, 2009 3:01 PM EDT |
> Intel vs. AMD and everyone else for the microprocessor market When AMD put out the first 64big "x86" CPU, I thought that Intel was going to excrete masonry. Then as IA-64 was ignored, and THEY had to use the OTHER GUY'S instruction set, well, what a remarkable time that was. Too bad about Apple going to Intel hardware. What a waste, the PPC is much superior. Still, that's the beauty of hardware agnosticism. Now for my opinion on "competition": Any competition tends to make the overwhelming market leader nervous. Even if that competition is only that someone MIGHT introduce a product that takes market share away, a producer will make innovations and invest in infrastructure that it would otherwise not do. While certainly the biggest difference is actual competition, one of the large contributors to a STAGNANT environment is what is called "barriers to entry". What keeps competition OUT even if someone does in fact have a better idea. So even with actual competition, Microsoft has had the benefits of a HUGE barrier to entry for competition: compatibility. That's one of the reasons I like OpenOffice so much. It contributes to breaking the one single stranglehold Microsoft ever truly had, Microsoft File Formats. |
| Sander_Marechal Apr 27, 2009 3:44 PM EDT |
@Bob: Barrier for entry is only one problem. Here's another one: In any market with strong networking effects, the natural market tendency is gravitate to a monopoly. You'd be hard pressed to find a market with stronger networking effects than the software market. |
| softwarejanitor Apr 27, 2009 3:54 PM EDT |
I agree with Sander... Consumers do strange things and make markets tend towards monopolies as they flock to perceptions of safety in numbers. That's why I'd like to see a market with no clear dominant leader and strong enough competitors to keep it that way. |
| jdixon Apr 27, 2009 4:05 PM EDT |
> ...but generally if a vendor controls 2/3 of a market then the pressures on the minority competitors are huge Agreed. |
| Bob_Robertson Apr 27, 2009 4:53 PM EDT |
Let's avoid the "C" word, because there is No Hope in that discussion. Instead, I'll ask what sorts of things are used by a dominant vendor to prevent competition in the provisioning of the things that benefit the most from this "network effect"? File formats I've already mentioned as a substantial benefit for network effects. How about executable binaries? I was working in government when Win95 was The Big Thing. I know that one of the major reasons for the penetration into government was that it was easier to check the line item called "Windows 95 compatible PC" than to detail all the disks, screen, keyboard, etc, which was required for buying anything else. If MS had had the brain cells to release Office for Linux/Unix, they would have had a total lock on Office file formats for a century. Ok, that's too much, but still I think one of the major reasons for OpenOffice and ODF getting the boost into relevance that it's had is MS's myopic focus on Windows and only Windows. Monopoly profits from network effects also depend upon barriers to entry to the provisioning of those things that benefit from network effects. |
| Sander_Marechal Apr 27, 2009 6:30 PM EDT |
Quoting:That's why I'd like to see a market with no clear dominant leader and strong enough competitors to keep it that way. That won't work well. That was the point of my post. Even if you did have a market like that, the network effects would make it gravitate towards a monopoly. In physic you'd say that it is an unstable equilibrium. A tiny nudge against the system and it starts moving away from the equilibrium towards monopoly. There are two ways of countering that. One is to keep adjusting the system. Every time there's a nudge, correct the system to return it to it's unstable equilibrium. That means market intervention. The other way is to change the system from an unstable equilibrium to a stable equilibrium. A stable equilibrium is what you see in classical economics. When you nudge the system the equilibrium is disturbed but it gravitates back to the equilibrium point, not away from it. To do this you need to weaken the network effects. Demanding open standards for everything is a good way of doing that. To put it in simple terms, imagine a salad bowl. Put the bowl upside down and balance a marble on top. That's an unstable system. Any nudge and the marble rolls off (the system gravitates away from equilibrium towards monopoly). To counter that you need to keep rebalancing the marble on top. Or you turn the salad bowl right side up and put the marble inside. When you nudge it now, the marble will always roll back to the middle. |
| Bob_Robertson Apr 27, 2009 10:54 PM EDT |
> the network effects would make it gravitate towards a monopoly. Let me disagree with the use of the word "monopoly". The only thing that can maintain a monopoly is coercion, because there will always be people who will use something else if they can. This is a LINUX board, with lots of people who will not use Windows, or Mac, and it's bloody hard to find any two who do so for the same reasons. But I agree completely that, given free flow, standards will evolve. People will utilize the network effect, they will choose to use .AVI, .DOC, TCP/IP, HTML, MP3, etc, because they know what they're getting. They know that if they have something made that way, they can use it / share it and know that others will be able to access it too. The motivation to use Windows in business is not because alternatives do not exist. It is the motivation of compatibility (combined with ignorance, IMNSHO) that says if my customers/suppliers use it, I have to be certain they can talk to me, too. Yet MS-Office is not the only product out there, it never has been. When it got close to ubiquitous, the effort shifted from just making excellent Office software to try to compete, but to penetrate the standard so that people could continue to function where they are already comfortable. The problem with the salad bowl analogy is that people are not marbles. Humans ACT. We make decisions. We choose. An individual will not always choose what someone else considers rational. So put your bowl up-side down, one human being will not fall the same way another will. Put it right-side up, a human might just jump out anyway, no matter how hard it is, just to be ornery about it. That's what Microsoft keeps trying to do, by constantly shifting their file formats. They're trying to keep people inside the bowl, and inevitably there are those that it merely pisses off. Rough consensus and running code. Yeah, it's an old hacker dictum, but it works. It's the mind-set which spawns Open Standards. |
| Sander_Marechal Apr 28, 2009 2:52 AM EDT |
Quoting:there will always be people who will use something else if they can. True. But a 98% or even 90% market share is still a monopoly. Microsoft never had 100% market share. Quoting:The problem with the salad bowl analogy is that people are not marbles. Humans ACT. Yes, they act. They nudge the bowl in order to make the marble roll their way. |
| Bob_Robertson Apr 28, 2009 10:11 AM EDT |
> But a 98% or even 90% market share is still a monopoly. You're using the word "monopoly" in its rhetorical sense, not its literal sense. Literally, a "monopoly" can charge "monopoly" prices for its product. Microsoft has been having to cut their OEM prices because of competition. They may be the only company that can sell Microsoft Windows, but it is becoming clear that Windows is not the only OS and Office is not the only office suite. So while rhetorically we can talk about the Windows monopoly, there have always been alternatives to their products. > They nudge the bowl in order to make the marble roll their way. Everyone does, which means no one does. Either that, or we get into a "tragedy of the commons", which only exists because of insecure property rights. |
| Sander_Marechal Apr 28, 2009 10:33 AM EDT |
I think you're missing the point of my posts and analogy by a couple of miles. |
| Bob_Robertson Apr 28, 2009 10:54 AM EDT |
If you say so. I went back and re-read, and cannot see where I made any mistake. Your first one is quite short and to the point. I disagree with it, but I don't see how I could mis-read it. |
| softwarejanitor Apr 28, 2009 11:44 AM EDT |
I agree with Sander. I think anytime that a company has market share that allows them to be the 800lb gorilla, they've got a de-facto monopoly. I don't agree with the contentions that only government granted monopolies or markets where there is litterally only one product/service available count. And I also disagree that Microsoft hasn't been able to charge monopoly prices. Frankly most of their products suck badly enough that if they weren't able to use coercive pressure to sell them they wouldn't be able to charge anywhere near what they do. The fact that they've gotten a tiny bit of competition, which has not allowed them to raise prices as much as they'd like is not enough to dispute their monopolist status. In my opinion the fact that many of their strongest competitors are free and still face an uphill battle against very expensive Microsoft products shows how the gorilla is still able to throw its weight around. I'm as strong a FOSS supporter as anyone I think... but I don't see any reason to cut Microsoft any slack. |
| Bob_Robertson Apr 28, 2009 12:32 PM EDT |
> I don't agree with the contentions that only government granted monopolies or markets where there is litterally only one product/service available count. I give no argument to "hegemony" or "800lbs Gorilla" or "network effects" for referring to Microsoft's dominant market position and reprehensible behavior. But if you're going to use the term "monopoly", be aware of what the word means. > if they weren't able to use coercive pressure to sell them they wouldn't be able to charge anywhere near what they do. What coercion? Who has been physically hoisted for not buying? Now please, I'm not saying that Microsoft has been an angel, leaving their product out there politely for people to pick up without pressure. Only that if you are going to use the word "monopoly" or "coercion", please use them correctly. It cheapens the word "coercion" to equate it with "persuasion", or "ignorance", or "bad choice". Or even "smart marketing contracts by Microsoft with OEMs". > I'm as strong a FOSS supporter as anyone I think... but I don't see any reason to cut Microsoft any slack. If you can point out anywhere that I have "cut slack", please show me. My disgust with Microsoft is one primary motivation for my not using Windows, and I find the sheep-like herd mentality that perpetuates the Microsoft hegemony quite pathetic. |
| softwarejanitor Apr 28, 2009 12:47 PM EDT |
I'm quite aware of what monopoly means -- I believe your apparent definition is too narrow and no longer the accepted one. http://en.wikipedia.org/wiki/Monopoly And coercion doesn't require actual or the threat of physical violence. Microsoft has used coercive tactics such as threatening to buy competitors to enter markets and dump product to destroy companies. http://en.wikipedia.org/wiki/Coercion And by using such apologistic definitions that you deny Microsoft is a monopoly or using coercion you are cutting them slack. Call a spade a spade. I stand by my choices of words, I think they're entirely appropriate for Microsoft's actions. |
| gus3 Apr 28, 2009 1:10 PM EDT |
Sigh. Let MS sue you, for whatever asinine reason. You refuse to settle. They take you to court, throw their best attorneys at the case, win it, deplete your ability to appeal. You refuse to pay the "damages," so the court orders your assets seized on behalf of MS. It starts out as "economic coercion." But try resisting that seizure, then tell me there's no threat of physical violence. When there is awareness of choice, violence is the only means of coercion. The Wikipedia article is a bunch of sophistry, as evidenced by its apologia for the disproven theories of Marxism. |
| Bob_Robertson Apr 28, 2009 1:10 PM EDT |
"apologistic definitions" Wow. |
| Sander_Marechal Apr 29, 2009 4:44 AM EDT |
Quoting:If you say so. I went back and re-read, and cannot see where I made any mistake. My point is that a software market with no dominant leader and strong competition does not stay that way when left unchecked, even though classical economics suggests it should. And that's because of network effects. I don't see what arguing over the definition of a monopoly has to do with that, let alone what tangent you wanted to inject by that "tragedy of the commons" remark. |
| Bob_Robertson Apr 29, 2009 8:55 AM EDT |
> My point is that a software market with no dominant leader and strong competition does not stay that way when left unchecked, even though classical economics suggests it should. First, I'm not a "classical economist". Keynes was merely a successful political hack. Neither do I contradict your assertion that a dominant player in any niche will arrise. What I tried to say is that the "network effects" are far stronger in file formats and other widely accepted standards than in actual code. That's why they're "standards". Do you understand what I mean by that? If that same pressure were so powerful in terms of the actual software, we'd all be running Windows. So no, we are not all running Windows, and neither is everyone running Linux, or MacOS, or any other application. For that matter, my TRS-DOS on single-sided 5.25" floppies won't run on modern hardware, and I'm not at all upset about that. I call a box of tissues "Kleenex" even when they're Puffs. "Hand me a kleenex, please." So of course I understand the idea that dominant providers exist in any market. That's perfectly normal. But look around, we ARE all running TCP/IP. Even Microsoft caved quickly in to the fact that the network effect of standard formats is relentless. Now to my primary point: So long as competition is possible, even a dominant provider MUST innovate or someone will come along who will, and thereby take their customers. The only time that even the 800lbs gorilla in the room can sit happy is if there is no possibility of competition. Why is the definition of "monopoly" important? Because people are using the same word to mean "dominant provider" and "sole provider". They are not the same thing. |
| Sander_Marechal Apr 29, 2009 9:20 AM EDT |
Quoting:Why is the definition of "monopoly" important? Because people are using the same word to mean "dominant provider" and "sole provider". That doesn't matter for my point. Under either definition the original market with no dominant provider is gone. Quoting:What I tried to say is that the "network effects" are far stronger in file formats and other widely accepted standards than in actual code. I think you have that the wrong way around. Standards reduce the network effect of an application. Your TCP/IP example proves my point. There are many, many competing TCP/IP stacks. TCP/IP is an open standard. If you deploy stack A there is no increased pressure on other people to also deploy stack A. No networking effect at all, thanks to open standards. An example of an applications with strong network effects are for example Facebook, LinkedIn or MSN. If your family stops e-mailing you and all start communicating via Facebook then there's increased pressure to start using Facebook as well. And the fact that you personally may resist using facebook does not mean that the effect isn't there. Plenty of other people would simply start using it when faced with the same situation. |
| Bob_Robertson Apr 29, 2009 10:54 AM EDT |
> Standards reduce the network effect of an application. Your TCP/IP example proves my point. There are many, many competing TCP/IP stacks. TCP/IP is an open standard. If you deploy stack A there is no increased pressure on other people to also deploy stack A. No networking effect at all, thanks to open standards. You're agreeing with me, Sander. You yourself are pointing out that the network effects of standards overwhelm that of actual code. The fact that Microsoft is putting ODF and PDF format support into Office is another demonstration of that. > I think you have that the wrong way around. How can I have it the wrong way around, when you explicitly re-state exactly what I'm asserting? > Facebook, LinkedIn or MSN. Reached how? Do I have to use Internet Explorer, or can I use whatever I want so long as it uses standard protocols? > And the fact that you personally may resist using facebook does not mean that the effect isn't there. Will you please go back and tell me where I said that network effects don't exist? |
Posting in this forum is limited to members of the group: [ForumMods, SITEADMINS, MEMBERS.]
Becoming a member of LXer is easy and free. Join Us!