Subject: Re: Returns to service professionals (was Re: New ESR paper: The Magic Cauldron)
From: "Stephen J. Turnbull" <>
Date: Wed, 7 Jul 1999 10:47:17 +0900 (JST)

>>>>> "Crispin" == Crispin Cowan <> writes:

    Crispin> "Stephen J. Turnbull" wrote:

    >> Yes, we need to oppose closed formats even more than closed
    >> implementations.  But open source advocates are not a lone
    >> voice in that.

    Crispin> You're ignoring the explicit "embrace and extend"
    Crispin> strategy that MS uses: take a standard protocol, use it,
    Crispin> and "extend" it with proprietary features.  The result is
    Crispin> that MS products are backward-compatible with standard
    Crispin> products, but not vice versa.  This has a latching
    Crispin> effect: consumers are encouraged to switch, and
    Crispin> discouraged from switching back.  Examples:


No, I am not ignoring this.  I just don't think it matters much;
otherwise other companies would use the strategy successfully, too.
Instead, time and again it has been shown that you comply with a
standard or lose.  Of course it is very profitable _if_ you can set
the standard, enough so that it's often worth betting the firm on that
strategy.  MSFT has done quite well with that strategy.

I simply do not believe they can get away with it indefinitely on that
basis alone.  This strategy is a Red Queen's race.  You must maintain
technological leadership[1] or the fact that your product emits broken
protocol will break _you_.  However, good technology is where you find
it.  And somebody else may find it first.

So MSFT uses all sorts of restraints of trade.  Some are definitely
legal, some are dubious (depending on their status as a monopolist,
which is sub judice), and others are IMHBSEO[2] definitely illegal
(those are the ones they've already signed consent decrees for; the
IMHO is necessary because a consent decree does not admit wrong-doing).

This suggests to me that MSFT is well aware that its technology is
insufficient; however, many of its strategies would be illegal if they
did not have some kind of technical hook so that they can claim
customer benefit.  So while embrace and extend is an explicit
strategy, I think it is probably more aimed at antitrust defense and
not missing a trick than a core part of the MS monopolization

However, far more important than "improved" protocols, as far as I can
see, is the ever-increasing integration of MS products, leveraging
overwhelming dominance in one market into dominance in others.
Cf. the importance of the browsers in the current DOJ action and the
evidence presented by Caldera about MSFT's strategy vs. DR-DOS in
their private suit.

As long as MSFT retains technological leadership, this is a good
strategy.  But as Linux, Apache, etc begin picking away at specific
domains, this becomes harder and harder to do.  The development of
VMware now means that with the current generation of processors the
kind of thing that MSFT is best at (desktop application environment)
can be done quite well in a virtual machine running on top of a real
OS.  This makes shooting at MSFT's weak points easier than ever; now
you don't need to even dual boot.

In 1985, in the first class I ever taught in Microeconomics, I
predicted that the Soviet Union would completely disintegrate within
two or three decades.  Fortunately, they had all graduated by the time
prediction was realized, so I was spared the embarrassment of
explaining how I'd failed to see how soon it was going to happen.
Centralized "evil empires" can disintegrate faster than you'd think.

[1]  Anybody who wants to rant about Microsoft's bad technology,
please do so elsewhere.  I've heard _that_ before, too.  Hell, I've
emitted copious amounts myself.  By the market test, MSFT is the
technology leader.

[2]  In My Humble But Somewhat Expert Opinion == Yes, I've booked up on
this and yes, it was 15 years ago that I seriously followed the

University of Tsukuba                Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
Institute of Policy and Planning Sciences       Tel/fax: +81 (298) 53-5091
What are those two straight lines for?  "Free software rules."