Digital life cycle

May 22, 1998|By Andrew J. Glass

WASHINGTON -- When the Justice Department posted its lengthy complaint against Microsoft on the Internet, it did so in an outdated form of WordPerfect, a once-dominant word processor for personal computers that has become road kill for Microsoft Word.

Were the trust-busters seeking to send a message to buttress their view that Microsoft had leveraged its Windows monopoly in a bid to seize control of the Internet? No. The complaint was drawn up on vintage government-issue PCs too weak to run on Windows.

Information Age truths

Having been sold to a Canadian-based firm, WordPerfect lives on in a high-tech Windows version, albeit with a modest market share. Its quick rise came at the expense of other early challengers. The cycle reveals some truths about the Information Age.

One could be called Sibley's Law, for David Sibley, a respected economics professor at the University of Texas who believes the government has a strong case against Microsoft.

Mr. Sibley holds that the larger the market share of an operating system, such as Windows, the more software vendors tend to write applications, such as for word processors, for that system alone.

The more this happens, the more customers will be drawn to the system, further enhancing its appeal. Over time, this circular feedback tends to make a dominant operating system even more dominant.

These effects, Mr. Sibley says, create "natural barriers to entry." In selling products such as Word, Microsoft is well-positioned to take advantage of such barriers, he argues.

Thus, IBM, whose revenues last year were seven times those of Microsoft, sought in vain to market its own strong operating system, called OS/2, originally crafted in league with Microsoft.

Years before failing to recoup with OS/2, IBM decided against paying a fee to Bill Gates to write the operating software for its new PCs. Instead, IBM licensed DOS from Mr. Gates' fledgling firm and paid a per-copy royalty to Microsoft.

By the mid-1990s, with the Internet about to take off, Mr. Gates was the world's richest man. He would not repeat IBM's mistake when Netscape, which had pioneered the technology that makes viewing sites on the World Wide Web a snap, sought to license its Navigator browser to Microsoft.

We'll roll our own, Mr. Gates responded. Three years later, as the market tipped toward the rival Microsoft Explorer browser, Justice and 20 state attorneys general sued.

But markets can tip again. Witness: Slide rules are out and pocket calculators are in. From scratch, it took only a few years for the CD to all but wipe out the once-dominant LP.

Writes Mr. Sibley: "There's no reason to think that the market, left to itself, will not generate alternatives to Microsoft's operating system that will be sufficiently superior to overcome the entry barrier advantage that Microsoft enjoys."

Who knows, by then even the Justice Department may be drafting its complaints on a newer word processor.

Andrew J. Glass is a Washington-based columnist for Cox Newspapers. His e-mail address is aglasoxnews.com.

Pub Date: 5/22/98

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