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The Forum > Article Comments > Breaking the Microsoft monopoly > Comments

Breaking the Microsoft monopoly : Comments

By Nicholas Gruen, published 31/10/2005

Nicholas Gruen argues the Microsoft monopoly could suffer due to a new OpenDocument standard for office applications.

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What about PDF? Been around for ages, has been an open spec for about half of that time. Practically everyone has a reader for it, or can easily get one, a fact recognised by the many governments and organisations that distribute soft-copy documents in PDF format.

Is it your contention that because Sun has OpenOffice - or StarOffice if you want to pay for support - there will be a greater uptake?
Posted by avocadia, Monday, 31 October 2005 1:10:38 PM
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avocadia have you got a PDF writer?
I get the feeling Nickolas bought a beta video!
Posted by Kenny, Monday, 31 October 2005 1:38:46 PM
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the reason pdfs exist is to permit people using operable files from differnent programs (photoshop, illusrtator, cad programs, word) to transfer them to othes without those programs. for example i can transmit a presentation to a client without them needing the program i used to create it, which it is unlikely that they will own. however pdf isnt really an operable file type, you cant do much with it, and it retains none of the characteristics of the original. so if i pdf'd a word doc to someone they cannot open or modify it in word.

what i think this article is suggesting is an open standard that would be modifyable at both ends. i.e between differnent word processing programs.
Posted by its not easy being, Monday, 31 October 2005 1:42:08 PM
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> avocadia have you got a PDF writer?

Yes. But I could also write my document in MS Word and use any number of free tools to transform it into a PDF.
Posted by avocadia, Monday, 31 October 2005 1:43:15 PM
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Microsoft got a bigger challenge with IBM GSA moving towards a strategy that rips the heart of the organisation out and trevialise all other IT players (Microsoft, SAP, Oracle).

Google positioning the search engine as the 2006 Operating system is another deadly danger.

I think we will see Microsoft declining at a much faster rate than they ever thought possible
Posted by Fellow_Human, Monday, 31 October 2005 4:33:08 PM
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"open standards are an “overriding imperative” of democracy itself". Good grief, how on earth did democracy manage before the advent of computers? Methinks the Massachusettians are being a bit precious here.

At least it's a change from the usual anti-Microsoft arguments. Nick, as an economist you probably followed the US anti-trust cases against Microsoft, which attracted comment by many leaders in the field such as Hal Varian. The general drift of comment and analysis by economists in this field was that the advent of Microsoft led to great reductions in price and increased value for money for consumers, few considered that there were serious public benefit grounds for the anti-trust actions.
Posted by Faustino, Monday, 31 October 2005 4:54:36 PM
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The main concern is the economic power that is in the hands of an organization that owns the format in which the documents are held. If that company is Microsoft, what is to stop them holding their users to ransom by increasing the usage fees every year?

They wouldn't do that though, would they?

But they might just take their ball and go home...

From Reuters

"SEOUL, Oct 28 (Reuters) - Microsoft Corp. has threatened to withdraw its Windows software from South Korea if the country's antitrust agency orders it to unbundle its Instant Messenger and Media Player from the operating system.

South Korea's Fair Trade Commission (KFTC) has been investigating allegations that the world's top software maker breached antitrust laws by incorporating the services into Windows."

ODF is an open standard. Microsoft has the same opportunity as everybody else to use the standard. If they choose not to, that's fine, but the example of Korea shows why government agencies, entrusted with their citizens' information, would rather it wasn't held in a proprietary format.
Posted by Pericles, Monday, 31 October 2005 6:11:05 PM
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Fellow Human

Pardon my ignorance. Can you explain the reason that Google will be a problem? And can you explain - in simple terms please - the reason that Microsoft will rapidly decline?

I do not understand any of this and will appreciate your clarification.

Many thanks
Kay
Posted by kalweb, Monday, 31 October 2005 7:50:07 PM
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If "network effects" create a natural monopoly then why does some upstart open document format threaten the monopoly? Could it be that the monopoly was only ever going to be transitory? Could it be that there never was a natural monopoly, just a superior product? Maybe capitalism is a dynamic beast.
Posted by Terje, Monday, 31 October 2005 9:34:26 PM
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Perhaps I can help, Kay.

Microsoft makes its money from two major sources: the operating system that manages all the resources of the computer and enables the programs to work, and a suite of common programs (Word, spreadsheet etc) called Office.

Microsoft gained its monopoly by persuading all PC manufacturers to pay them a license fee for the operating system, whether or not they actually loaded it onto the machine. They also ensured that other office-type programs from their competitors - word processors, spreadsheet etc - would find it difficult to work with a Microsoft operating system.

(All this came out in evidence at the anti-trust trial a few years ago, by the way, and can be checked)

Once they had the monopoly, they were able to exploit the synergistic nature of the operating system and the Office programs to increase the resources they needed, so that you need to upgrade your PC every so often - and pay again for a new operating system, Office system etc.

Also, they were able to introduce new formats for their documents that obsoleted those that had gone before, once again requiring the PC owner to upgrade.

The advent of standards, which are basically free, and freely available to everyone to use, cuts across this synergy, and starts to break down the interdependencies that the company has relied upon in the past to ensure future revenues.

Hope this helps.
Posted by Pericles, Monday, 31 October 2005 9:37:12 PM
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Pericles

Thank you very much for your post. Enlightening and interesting.

My husband says that I am very bright. I previously had an academic career. He says I lack a most important trait called common sense (I might add, he is not computer friendly)! I agree with him.

In 1985 I gained my first compputer. Universities said Apple was the go. I have worked in four unis across the Eastern State - all said Apple.

I moved out of academia. I still had my Apple in 2000. I could not wind my head around IBM at work. Finally purchased an IBM Melenioum 2000. I only use it for home stuff. I have not upgraded since then. My last technician visit was just about a year ago. He said that I have a good set up.

What do you think?

And why is Google going to go down the gurgler?

Many thanks
Kay
Posted by kalweb, Tuesday, 1 November 2005 12:00:04 AM
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The words "Google positioning the search engine as the 2006 Operating system is another deadly danger" mean that Google represents a threat to Microsoft, not the consumer.

Google is healthy and the Search Engine market is an example of marketplace competition.
Posted by David Latimer, Tuesday, 1 November 2005 8:39:53 AM
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avocadia have you got a PDF editor?
Posted by Kenny, Tuesday, 1 November 2005 9:47:47 AM
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Hi Kay,

Microsoft (Oracle, and SAP) are facing two types of competition:

1. Large organisations:

Consulting firms (Led by IBM) drive large organisations into translating technology into business processes then outsourcing it/ off shoring back to IBM and others. So call centres, billing, customer centers, and similar business functions will be swallowed by IBM and similar companies causing the traditional software vendors (like microsoft) to miss out on software sales and face a rapidly shrinking market.

2. Small/ medium businesses:
Exactly as David Latimer pointed.
With Google, services for small businesses will be internet based applications (similar to ebay services). In fact most small business collaboration is with ech other and not internal.

Google is positioned itself to be the gateway to internet business applications or in other words, your operating system rather than windows.

All the best
Posted by Fellow_Human, Tuesday, 1 November 2005 11:59:37 AM
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Kenny: Yes, I do. Adobe Acrobat - Acrobat, not Reader. I could also be using OS X which supports PDF natively. There are quite a few tools for PDF editing, free or otherwise.
Posted by avocadia, Tuesday, 1 November 2005 2:22:46 PM
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I remember when big blue (IBM) straddled the globe and the official USgovernment policy, via their anti-trust laws was for any government department to only place up to 80% of their business with IBM.

A less than perfect system but at least something which did recognise the merits of competition.

Poor old Rockafella saw his monopoly broken.
Their was a (I think ) dentist in Cleveland (or somewhere) who supposedly, through his crafty entreprenuerial mechinations ended up with a slice of ever record and entertainment artist until American Music too was broken up.

The US FTC has already had one bite at Microsoft and doubtless will take others.

I tend to have some faith in the atni-trust / antoi monopolies processes. IBM almost collapsed completely and in part due to its agreement with Microsoft and the non-exclusivity of that agreement. Similar events take place and corporate monoliths fall from grace.

Ultimately no company or corporation can strangle its competition. The strain of such efforts results in something always breaking and when it does there is usually a fallout, like Enron, a company which thought it was omnipotent and before them Michael Milken, the junk bond king of the 1980s / early 90s - When all fell apart it was not the end of civilisation as we know it. Fortunately the "capitalist system" is sufficiently resiliant to resist such tremors.

Microsoft is big enough to be a big enough problem for something to break. When it does the "market" will change - maybe for better, maybe not but whilst Microsoft was a fabulous investment in the past it has probably plateaued and has a future a bit like Aussie Telstra - damned for what it does and damned for what it doesn't - either way - a place for investors to be wary of.

The cracks started with Java and the failure of Microsoft to dominate its development, maybe ODF will enhance the strain and we will see Microsoft follow Standard Oil, American Music and IBM. Without wishful thinking, no one anticipated the Collapse of the Berlin Wall either.
Posted by Col Rouge, Tuesday, 1 November 2005 2:38:32 PM
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I read somewhere that microsoft is going to offer an xml based format for its office files in forthcoming versions of office. The reluctance to use opendocument has probably more to do with the fact that it is inferior and cannot support many of the things that office applications can do.

Microsoft's position in office productivity applications is no more a problem for society than SAP's position in enterprise applications. They have the lead. There are others in the field. It is not unscionable that they have a monopoly.

I think the bigger threat, as someone else has raised, is google in internet search. It is fortunate that there is some competition in this area from yahoo and microsoft. But whoever wins here, may well win in every other area down the track. And this may not "make the world a better place".
Posted by SL, Tuesday, 1 November 2005 2:45:58 PM
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A fundamental problem with standards is that nobody writes programs that strictly comply with them. All vendors that say their applications comply are probably right. However, they will all want to make a product differenciator - additional whistles and bells beyond the standard that the standard does not address. So, now what do you have? a product that complies with the basic standard as far as the standard definitionis concerned but additional features that no other product supports.

Therefore what good are the standards if they only address a portion of the various "complying" products functionality.

Witness the UNIX operating system and the Open Systems standards. To name a few, IBM, HP, Sun, all claimed compatibility. Have you ever tried to migrate your applications from one to the other?

By forcing a level of compatibility by government fiat we will see another Telstra that is years behind the technology curve because it is not financialy incented to move forward
Posted by Bruce, Tuesday, 1 November 2005 3:46:45 PM
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Kay, if you haven't changed your set-up for five years, you are one of the lucky ones - most people I know have been forced to upgrade long since.

SL, even if Microsoft were to produce an XML format for Office 12, it will still need to meet the Massachusetts definition of open formats, which they describe as "specifications for data file formats that are based on an underlying open standard, developed by an open community, affirmed and maintained by a standards body and are fully documented and publicly available". You will notice that it says nothing about it having "inferior" capabilities, basically because they are after security, not functionality.

What puzzles me is why they dont just incorporate the ODF standard in a "Save As .odt" capability in the drop-down box. This will meet the Massachusetts requirement, and still enable Microsoft to maintain its own format for those who want any extra features they might need. It's not as though Microsoft doesn't have enough programmers.

And Bruce, please understand this is not about inter-program compatibility, it is about document formatting. The capability of an organizations to keep documents in a format that they *know* can still be read in a hundred years time, because the "rules" under which they are stored/coded are freely available, and not kept under lock and key by a commercial concern that might be tempted to exploit their proprietary format for financial gain.
Posted by Pericles, Tuesday, 1 November 2005 9:30:24 PM
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I have two Linux and one windows system. Only use windows for video as I haven't been able to complete building the video program I want with open source. Except for my 3 windows programs, all my software is open source. I 'm not a programmer, yet over a couple of years have learnt to take different components of Linux and make up programs that suit my purpose. Mind you for me it is a slow error ridden process. I use one Linux system for this and the other is for my business. I deal with a lot of different people, most use Microsoft, but open office in Linux handles it exceptionally well.

Linux through a program called wine, opens Microsoft programs so that you can use them in Linux. So there are no problems, just bonuses. Fedora, never stops. Solaris just keeps getting better. Plus I have a small Linux on dvd which I use for experimenting, you can do anything to it, just restarts perfectly when you crash it trying something stupid, It isolates the problem from the system so that you can remove it. Try doing that with windows lock ups and crashes.

What I love about open sources is that you can fix it by posting your problem, normally within a few hours you have a patch. You can create your own custom setups, that can be read by other open source software. The range of software is almost endless and its free. Thats where we are going. Telstra may become a poor hack for landlines. The next generation is satellite and wireless. I'm on broadband satellite and its just fabulous, we have no land lines and do all our telephony over the satellite saving heaps.

Once the Microsoft ties are broken, you can be sure that the range and quality of software will just skyrocket as people make up their own programs to suit, and always having compatibility. If you want a top open source graphics program, try the gimp and open office will open every format you can think of, I believe.
Posted by The alchemist, Wednesday, 2 November 2005 7:42:45 PM
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I'm not going to say that it is causal exactly - but it has always seemed ironic to me that the dot com era ended at roughly the same time as the US supreme court (and later the the US govt) pulled the plug from "the" MS anti-trust case.

The main recent trial that is...
Posted by WhiteWombat, Wednesday, 2 November 2005 11:27:08 PM
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Alchemist - have been interested in Linux myself for sometime - AND you have your own satellite! - something I can only fantasise about.

I have never believed in monopolies - believe true competition is among many small to medium businesses. 'Bout time Microsoft had to learn to compete.

(formerly Trinity)

Peace
Posted by Scout, Thursday, 3 November 2005 6:29:12 AM
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Scout, I agree with you, there is a growing number of small businesses that are steering clear of monopolies, technologically and supply wise. People are beginning to realise that good personal service, is worth a lot more that inefficient don't care monopolies. A lot of the people I deal with are changing as they see the economic benefits of it. No one likes to have their business interrupted by computer problems, failed deliveries or wrong accounts and payments.

Today we just finished upgrading our open source POS, it cost just over $50 for a geek to fine tune it and you can configure it in any combination you want. It was built on a DVD so that it could be put into a computer and tried, then taken out again without the computer missing a beat. You just can't get that much control or versatility from commercial windows packages.

The satellite is available to everyone that doesn't have access to broadband. The government provides it with a subsidy called HIBS, Vsat. Free equipment, free installation and charges that are equivalent to the city. Check out www.bordernet.com.au if anyone is interested. It means you can drop your landline and do everything over the satellite. Bonus for us is that we are also on solar/wind power, so we never have a power outage or spikes. Way to go if you can do it, you would be amazed at the savings after start up costs.

All the best
Posted by The alchemist, Thursday, 3 November 2005 4:40:56 PM
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Thanks for the info Alchemist - you are doing the things I have plans to do. Way to go! My own satellite dish - I am in dream land. Now if I can just get a (reasonable paying) job.....
Posted by Scout, Friday, 4 November 2005 6:40:16 AM
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For editing PDFs, I thought you might consider PDF Edit Tools which is a powerful utility to rotate pages, add blank pages, delete pages, crop pages, extract pages, merge pdf files and pages, add headers and footers to pages, extract images from pdf files and add images to pdf files.

more information:

http://www.qweas.com/download/business/word_processing/pdf_edit_tools.htm
Posted by freda_fan, Wednesday, 7 February 2007 5:11:10 PM
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