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The Explorer /
Mike Elgan

Don't Split Microsoft!
There's a better way to deal with 'The Microsoft Problem.'

Should the Justice Department split Microsoft into two companies?

Competitors and critics complain the Redmond company is a dangerous monopoly that uses Windows to unfairly dominate other software markets.

In my December column, I outlined arguments in favor of splitting up Microsoft. Last month, I gave the opposing view, arguing that the government should back off and let the market decide. This month, I'd like to share a few of your thoughts on the subject and also present my own opinion on whether the company should be split.

Here's what you think

Wow! The letters pouring in are 20 to one against splitting up Microsoft. Many of you registered your distaste (and even disgust) with the whole notion of government interference in the computer industry. On the government's role, reader George J. King wrote, "Mike, the more we keep those guys out of the marketplace, the better our economy will be," neatly summing up the prevailing thought among respondents.

A huge number of replies criticized the critics. "The jealousy of competitors is no basis for wrecking a company," said reader Craig Faichney.

Some opinions surprised me. For example, Brett Schulte wrote, "I love Microsoft; I believe the company and its founders are national treasures ... and that Bill [Gates] deserves every penny he's earned. I also agree Microsoft should be split to protect the rest of the computer industry."

You'll find more reader comments at http://www.winmag.com/people/melgan/monopoly/. You'll also find this and my two previous columns on the topic and a lot more information about the Microsoft antitrust issue.

Here's what I think

I don't think the government should split Microsoft, nor do I think the Department of Justice is capable of ruling fairly on, understanding or even keeping up with the computer industry. Past investigations and actions against Microsoft have proven to be time- and resource-wasting exercises.

The DOJ is currently investigating Microsoft in response to a complaint by browser rival Netscape, which levels three major charges at Microsoft:

1) Microsoft's 10-connection limit for NT Workstation is unfair to small companies that want to use the cheaper workstation version as an Internet or intranet server.

I agree that the 10-connection limit is wrong (see NewsTrends in this issue), but that doesn't mean the DOJ should step in to right this wrong. Companies should be free to write bad license agreements, lose customers and force ISVs to support other operating systems.

2) Microsoft gives OEMs discounts if they put Internet Explorer right on the desktop and make rival browsers less accessible to users.

People don't choose a browser because "it's there." Microsoft is trying to "brand" IE as part of Windows because in the next version, it will be fully integrated.

3) Microsoft unfairly gives away software on its Web site and with its operating systems, which Netscape says is unfair to vendors trying to sell similar products.

Netscape invented the now-common practice of giving away Internet software to gain market share (how much did you pay for your copy of Netscape Navigator?). The complaint is painfully ironic.

Microcomputer software is a rare bright spot among U.S. industries. American software companies, for the most part, clobber foreign competition. This success exists partly because the government hasn't figured out how to regulate it into mediocrity as it has so many other industries.

That's not to say Microsoft is innocent of all the accusations hurled at it over the years. In some cases, it's guilty as sin. For example, it's clear the company withholds information about its operating systems from competitors in the applications markets to give its own apps an advantage.

I do believe immediate action is required. Not by the government, but by Microsoft's competitors, the press, buyers and Microsoft itself.

The handful of companies that complain to the Justice Department needs to stop complaining and focus on making better products. Lots of companies do it. Our January Recommended List sports 62 software products out of thousands available for Windows-only seven are Microsoft's.

The press-computer magazines, business publications, newspapers, newsletters and online publications-needs to buck the herd mentality. We need to work harder to find real innovation at small companies. Too many computer journalists are seduced by high-dollar marketing and slick demos. We must see past all that and tell it like it is in reviews. And we need to stay in touch with real-world needs. That's been our highest goal at WINDOWS Magazine for five years. Our standards are high. We clearly state what we think you should buy, without playing favorites. All publications that review software should do the same.

You, the buyer, need to take action too. Don't settle for mediocrity. Demand the best and be willing to pay for it. Listen to buying advice that's based on sound testing, experienced judgment and real street smarts, not product religion, hype or marketing bull.

And finally, Microsoft has a lot of work to do. The company has a serious public image problem that it cannot solve by throwing money around. Microsoft needs to show real leadership by being more evenhanded in disseminating information about new Windows and NT versions. It needs to continue to compete hard, but give more weight in decision making to the impact on users' wallets, OEM relations and the competitive climate. Every time a customer or vendor feels run over, pushed aside or ignored by Microsoft, the bad word of mouth spreads like a virus. And that's the source of the company's reputation as a monopolistic bad guy.

Here's what Randall E. Stross thinks

New books about Microsoft and Bill Gates seem to come out almost monthly. One, The Microsoft Way by Randall E. Stross, is particularly good. Microsoft granted Stross, a historian, access to company e-mail, memos, internal product evaluations and so on. The author interviewed Microsoft employees from the janitor all the way up to Gates.

The result is a cogent, readable account of why Microsoft is the way it is. In Part Four, titled "The Monopoly Game," Stross rips to shreds the conventional wisdom on Microsoft and antitrust. It's required reading for any serious Microsoft watcher.

Haven't weighed in yet? Join me and other readers at the "Should the government divide Microsoft?" page mentioned.

Contact Editor Mike Elgan in "The Explorer" topic of WINDOWS Magazine's areas on America Online and CompuServe, or at the e-mail addresses here.

Windows Magazine, February 1997, page 45.

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