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Monopolies

Gateway might give you a refund but Microsoft never will.


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The problem with Microsoft isn't that they're a monopoly, but that they're an offensive monopoly. If Microsoft were a defensive monopoly, things would be different.

Imagine for a moment that Microsoft had the best possible products on the market, but were continually being harassed by lesser competitors with far inferior products who were always employing 'dirty tricks' to win a market advantage. If we found out that Microsoft were dealing some of the dirt back, we'd applaud them. We'd be grateful they defended their products so we could still enjoy them. We'd appreciate both the care and quality they put into their products and the security they gave us by being just as savvy as the dirty players.

But that's not the case. For Microsoft, monopoly is not the number one priority; it's the only priority. For Microsoft, product quality hasn't taken a back seat to monopoly market dominance; it doesn't even get to ride in the boot.

On the OEM side, vendors are hard pressed to make ends meet and keep sales up. This because the competition is so fierce. It's not like with Apple, where in the hardware sector Apple are the only vendor; in the PC sector, the vendors are clawing at one another all the time, trying to stay one inch ahead of each other. They keep having to cut prices - and of course quality falls in disrepute as a result. It's no coincidence that Gateway have almost a 40% return rate on new computers - two out of every five delivered Gateway machines do not work right out of the box: it's because Gateway are selling so poorly. They have to cut corners, and the corners they cut are in production and service.

Consider the Apple production line: every hard drive in every computer gets 100,000 butterfly read/write tests before it leaves the factory. If the drive fails on a single one of these tests, it gets sent back.

PC OEMs can't afford that. If they can boot you into Windows, the machine is yours. And it doesn't matter if something is wrong with the hard drive: you'll have to return it anyway (at your own expense) and in the meantime, they will have your money. For them, with the price wars raging as always, it doesn't pay to keep a high level of quality control.

Enter Microsoft. Microsoft tell the OEMs they can get Windows really cheap. Say less than half the price. If a licence normally costs about $100, they can have it for $45. Done deal.

But here's where the lock-in comes. For the OEMs have to pay up front for these lucrative licences. And they have to pay not only for the licences they sell, but for every machine they manufacture. And under those circumstances, it pays to not promote any other product - you'd cut immediately into the great savings you just made.

But it gets worse: for if the OEM cannot sell all their licences, Microsoft will not give them their money back - all they get is credit on the next contract they sign. Meaning of course that it's directly unprofitable to consider switching horses. If you go over to another operating system, you lose all the money you've already spent on Windows licences.

So where does Linux come in? Linux comes in under the radar. Full priced Linux licences cost less than OEM-discounted Windows ones. Plus there are no strings. There's no product lock-in. An OEM can brag that they supply both Red Hat and SuSE boxes, for example. And customers don't have to be worried that the operating system vendor is going to play dirty tricks on them to make it impossible to keep the current version, force them into an expensive upgrade. If it really comes down to that, the customer can download the upgrades for free. And the product itself is a lot better - and today a lot prettier - than Microsoft Windows. It's safe computing, no hassles, a much better user interface, almost no cost, and no vendor lock-in.

That's where Linux comes in, and that's why Microsoft are so terrified.

If Microsoft were only defending their product, which everyone agreed was the best product - if Microsoft were a defensive monopoly fighting unethical business practices on the part of Linus Torvalds for example - then we'd applaud them, cheer them on; then they'd be our heroes.

But that's not the case. Linus plays by the book; Linus has a good product; Linus is even on Mars - and Microsoft, who have never given a thought to quality or customer satisfaction, bully the market instead, and practice offensive monopoly.

Microsoft's crime is not so much that they're unethical or even illegal in their monopoly business practices, but that they engage in these business practices so that they can keep forcing third-rate products on us.

Gateway might take your computer back, fix it, or even give you a refund, but Microsoft never will.

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