The Intuit/Microsoft situation is partly caused by Microsoft's size and dominance of the industry. There is a portion of the population that does not trust Microsoft and its use of 'customer' information to market to customers and hold them digitally captive. This demographic will continue to provide sales to an Intuit. There could be much the same situation with the operating system Redhat versus Windows. People fear the 'Sumo' dictating to them, the alternative 'freedom' may be Redhat.
VP/GM, Everbrite
Back to the Future ... Back to Reality thinking has grabbed business leaders over the past year. It's time to re-examine many long-held suppositions. Your item on sumo and judo suggests one that's bubbling under the surface of the Microsoft debates: Competition generally provides benefits to consumers, and should be encouraged. Our economic system, however, allows for the fact that certain "natural monopolies" exist. Where they exist, consumers do not benefit from redundant, competing investments by competitors. Most of us understand how that applies to electricity transportation and distribution infrastructure or to the national highway system. In those cases, our economic system provides for either regulation or public ownership.
It has been difficult for some to extend this concept to various software and information technologies. Are we better off with dozens of suppliers of operating system software? No matter how much innovation that competition spurred, the difficulty of integrating and interactingacross companies and userswould rapidly eliminate real customer benefits. So, we are better off with a de facto monopoly in operating systems. But the traditional approach of regulation seems less relevant in the broad and fast-paced technology arena. Here the pace of change argues for a situation very similar to what we have. Microsoft, the de facto monopoly in operating systems, faces the concern that the entire category of PC operating systems might become marginalized by more appropriate technology. So, they plow much of the monopoly returns into new areas of endeavor. Consumers can then benefit from some viable competition to media players like AOL/TimeWarner, or perhaps dominant financial services firms.
History argues against Microsoft, as the leader in one generation of technology, becoming the dominant player in the next generation. As long as Microsoft continues to re-deploy the margins in its core business to explore new ones, chances are the market and customers will benefit relative to what would happen in a fragmented market where few, if any, companies could sustain the level of investment to innovate and go to market at the pace that technology allows.
Dennis Crane
President, Crane Consulting Corporation
In 1995, Intuit was the target of a friendly takeover by Microsoft. The transaction was scuttled by the DOJ even after the acquisition was structured to divest MS Money. Intuit was the undisputed leader in the personal finance category, and Microsoft admitted as much with a "buy 'em if you can't beat 'em" strategy. Intuit actually beat Microsoft at its own game, expanding rapidly into new markets of tax software and online investment support. They took the high ground, forced the competition to play catch-up, and never stopped innovating. Even when MS gave away Money, there were few takers. Not because of value, but because Quicken was clearly the market leader.
Microsoft is vulnerable, just not on the desktop. Apache WEB servers running on Linux claim just under 57% (20,713,781) of the November 2001 site market, while Microsoft has just less then 30% (10,844,419) of the same market. Compared to the November 2000 numbers of 60% (14,193,854) and 20% (4,774,050)*. Interestingly, Apache will run on Windows operating systems, but there is no doubt that IIS will never run on Linux. ASP technology is available for Apache, and XML capability, the linchpin of .Net, is also available and improving rapidly.
What that 800 lb. Gorilla (MS) is fighting against is a guerrilla army that is free. One is reminded of the "I Love Lucy" episode where a diner is split between the feuding couples. A single patron fuels a hamburger price war that Lucy and Ricky win at a penny each. Accepting defeat, Fred hands the patron a buck and sends him over to get a dollar's worth. Microsoft can't afford to play that game, cash hoard or otherwise, because they have to make money; the other guy (Free Software Foundation) doesn't.
There are viable alternatives to MS Windows at the application and database server level. The programmers of Linux and Apache are all over the place, not locked up in some Redmond, WA help tank; they are directly available to IT departments with direct hire. Microsoft has declared a .Net world in a universe they do not own, and cannot afford to take away. Sun and IBM are supporting the effort by selling hardware with Linux installed. Who cares what browser is on the low margin desktop when the high margin server is NOT Microsoft? Corporate America's IT Departments are key players in this competition.
Microsoft is the winner of the desktop and the browser because the DOJ failed to act. Competitors are looking at much more risk in any desktop venture. The brilliant leaders will be looking to compete at the server level with a good chance to become a market leader because Microsoft has a poor position to defend.
*Netcraft survey for November 2000 & 2001. These statistics are misleading in that they doesn't reflect platforms and environments, two more appropriate measures of revenue value than site count.
Richard A. Eckel
President, Systems Synergy, Inc.
I usually practice judo. Judo's official rules of competition establish different weights in order to compete. I believe in "business weights." Microsoft versus Oracle, PepsiCo versus Coke. If you have more leverage you are going to win in the end. Nowadays, the "little business weights" are the [people who act], who open new markets, new ways of service. They are the real worldwide engines. The best [things] are in little packages.
Daniel Herrera
New Business Manager, Mass Media