Subject: Re: The upcoming state of IT
From: "Benjamin J. Tilly " <ben_tilly@operamail.com>
Date: Sat, 01 Mar 2003 17:11:39 +0500

Russell Nelson <nelson@crynwr.com> wrote:
> Benjamin J. Tilly  writes:
>  > Interesting article:
>  > http://www.aaxnet.com/editor/edit029.html
> 
> I agree with Ben.  This is definitely an interesting article.  It's
> odd, though, in that it paints Microsoft with two brushes: either
> Microsoft is going down the tubes, or else Microsoft is going to take
> over the world.  In either case, Microsoft is going to exclude all
> other software authors from interoperating with their software.  Fair
> warning to anyone who tries to interoperate (too bad, Mono).

I didn't see the two brushes.  I saw, "Microsoft wants to
take over the world" vs "Large chunks of world actively
does not want Microsoft to take over the world."  Both
are true, and are somewhat correlated.  The conclusion of
the article seemed to me to be that it is unlikely that
Microsoft actually will take over the world, but it is
very likely that anyone tied to Microsoft will see both
ongoing pressure to be nothing but Microsoft, and
increasing levels of pain as Microsoft tries to satisfy
its revenue desires.

The result is that individual companies are likely to
either see Microsoft taking over THEIR world, or will
exit the Microsoft vision of the world.  If you are a
business that lives within Microsoft's PC market, this
doesn't look promising.  If you are tied to Microsoft
products this is worth thinking long and hard about.
Yes, you probably have obvious reasons for not
switching.  But the directions that Microsoft wants to
go will make it harder to switch later, and the amount
of lock-in now is highly correlated with eventual
amounts of economic pain that you will see.  (But given
the economy, for many the prospect of actually being
_around_ later to suffer from choosing Microsoft now
would be a good problem...)

An incidental note.  This conclusion about Microsoft's
behaviour is perfectly in line with the fact that in
information technology markets the net present value of
a customer base should equal the total costs of their
switching to a competitor.  (See point 3 of page 2 of
http://www.cl.cam.ac.uk/ftp/users/rja14/econ.pdf.)
Therefore anything that Microsoft can do to lock its
customers in further increases the eventual revenues
that they can command.  Given difficulties in growing
their markets, and given a basic profit motive, this
an obvious course of action.  (The flip side of this
principle is that FSBs cannot generally command high
premiums because the value proposition of their
product includes low transaction costs for switching.)

> He's well-read and has plenty of references if you've got spare
> reading time (that's a joke, son, that's a joke).

That's _not_ a joke.  If you have enough spare time he
has a lot of other articles to read as well, and lots of
references for them as well.  By the time you get done
that, he should have another couple as well.  Major
time sink potential.

Or so I hear.  I don't have enough spare time to do
that myself. :-)

Cheers,
Ben
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