April 2000

There's only one thing worse than not having enough choices in software applications -- and that worse thing is having TOO MANY choices.

Why would having too many choices be a bad thing? That depends on the definition of the words "too many".

I have here before me a May 1994 edition of OS/2 Sources and Solutions, a 200-page book that was bundled with OS/2 Warp 3.0. Think about that -- 200 pages of OS/2-compatible software applications!!! What a tremendous variety of choices in almost every product category -- CAD, development tools, utilities, accounting, and more -- from a wide variety of ISVs. But there's one big problem with having that much choice.... it's almost impossible for all of these vendors to make a living.

This period of the mid-1990s was just before the Open Source craze took hold. In this time frame, companies that sold software expected to make money on what they sold. Indeed they had to, because their business models did not usually allow for service-related income, or selling technical support, documentation, or other software-related add-ons. In order to succeed, prosper, and live long enough to get to Version 3.0 (a key milestone in the evolution of most software products), a software maker had to sell lots of copies of their products. There are two ways to do that:

1. Own a monopoly on the application you sell on the OS you sell it; or
2. Be a part of a rapidly-growing OS platform.

Certainly the market for PC software was growing during the mid-1990s, and some market niches continue to grow. However, OS/2 ISVs faced a tough challenge in meeting either of the two growth conditions listed above. First, almost none of them could have a monopoly on their particular applications (especially general-purpose desktop apps), because in most categories there were numerous DOS and Windows applications that ran well on OS/2 and therefore were direct competitors to the native OS/2 applications in their respective categories. Second, the market for native OS/2 applications could not grow because of Microsoft's PC OEM preload monopoly and its contractual lockout of superior alternatives such as OS/2 Warp.

One model for the software market is the ecosystem. We might look at the case of a bacteria culture in a Petri dish. If you provide only a small growth space for a culture, few species will survive, new introductions will find survival very difficult, and even surviving varieties will have their growth limited by the physical size of their environment. But use a bathtub-sized dish, and not only will survivors grow and multiply but even smaller competitors and newly-arrived alternatives have room to grow and prosper in such a large space. This is why Microsoft has insisted on using ruthless, monopolistic methods at the OS level: to build their own "Petri dish" to an unnatural and unrealistically large percentage of the PC environment, while simultaneously preventing other OS "Petri dish" environments from becoming established and growing large enough to reach "critical mass" and become thriving, self-supporting development communities.

This is also why the fastest-growing competitors to Windows -- environments such as Linux, BeOS, and the Mac variations -- had to get their start on non-Intel hardware platforms. By using the non-PC "substrates" to start their application development cultures, these OSs were not locked out of a growth environment by Microsoft's monopolistic shenanigans. Also, their inability to run native DOS and Windows applications meant that fledgling native-code ISVs on these platforms were not competing wtih an established, well-funded set of pre-existing competitors. Thus these ISVs had a dual advantage over native OS/2 application developers attempting to grow in the oppressive world of Intel-compatible PCs.

In other words, the survival and prosperity of a large number of native OS/2 ISVs could have been achieved already, even in the hypercompetitive environment where OS/2, DOS, and Windows applications can all run, if the preload lockout conditions established by Microsoft's monopolistic acts had not taken place. OS/2 ISVs could exist in larger numbers, with greater levels of growth, innovation, and the commensurate greater financial rewards, if Microsoft did not use its monopoly leverage to threaten IBM and other PC manufacturers into weakly giving up the option to preload OS/2 Warp on new computers. The current condition has kept down the number of OS/2 desktops available as "selling fields" for the native OS/2 ISVs. A vibrant and growing "Petri dish" composed of millions of new OS/2-preloaded PCs could still provide a healthy growth environment for OS/2 ISVs to prosper and innovate.

Therefore, any DOJ-Microsoft settlement or antitrust court decision ought to take into account the Microsoft preload monopoly and move towards dismantling it. Also, the harmful effects of growth-inhibiting monopolistic conditions upon non-Windows ISVs must be addressed. (Perhaps Microsoft will be forced to subsidize non-Windows ISVs???) A preload monopoly not only hurts OS/2 ISVs by limiting the number of available customers for their products, but it also reduces the incentives for makers of software development tools to make OS/2 versions of their products. Any decision in the Microsoft case must address the OEM preload monopoly and its damaging effects on the last five years of software competitiveness and innovation. Anything less would be a weak, toothless result which would only benefit Microsoft and their lackeys.

So you see, you *can* have too much of a good thing -- if you don't have enough room to grow.

Most recent revision: March 15, 2000
Copyright © 2000, Tom Nadeau
All Rights Reserved.