Monopolies, anti-trust and bailouts?

[AZRedhawk44]

With all this talk of businesses that are supposedly too big to fail...

Isn't this what anti-trust laws are supposed to protect our economy against?

What would happen to the computing world if Microsoft suddenly simply ceased to exist?  No OS/Server/Office support.  No custom module support for CRM.  No support for enterprise database systems.  Information oriented business would grind to a halt.  They've been hauled in to court several times for monopolistic practices and antitrust suits.

Is Microsoft too big to fail?  Would it then by default have a monopoly on thier sector of the market?

My goal here is not to pick on MS... I'm just using it as a business model I know better than I know others.

Should we be examining every bailout recipient in context of monopolistic practices?  Obviously our economy is too homogenous to survive disease or predation... we need fresh bloodlines.

[CNYCacher]

What would happen to the computing world if Microsoft suddenly simply ceased to exist?  No OS/Server/Office support.  No custom module support for CRM.  No support for enterprise database systems.  Information oriented business would grind to a halt.

Microsoft ceasing to exist would be one of the greatest things that could possibly happen to the computer/information industry.  They have caused more harm and stifled more advances in computing than any other entity.  It is the height of foolishness to believe that the world has a need for their products or services.

Microsoft products are needed for one thing and one thing only: dealing with proprietary-formatted content generated by computer morons who also use Microsoft products.

Their entire business model is based on vendor lock-in.  They infiltrate, proprietorially expand and then take over any open standard they can manage to get into.

They make sub-standard products whose security vulnerabilities cause untold expenses.

They stifle progress by failing to adhere to standards in any open standard they are unable to overtake and destroy.

Pure evil.

[Werewolf]

Pure Evil

Respectfully - Horse Pucky

Imagine if the phone industry had had to contend with 100 different phone standards and 100 different phone companies where the phone industry would have gone. NO WHERE!

Lucky for us the early dominance of AT&T insured that there'd be one standard.  Now that that standard is firmly established guess what happened to AT&T?

The information/computing industry is not at a stage yet where there is a single standard, set of protocols etc.

Chaos would result without the dominance of microsoft and would cause more harm than good.

Is ms' standard the best? Arguable.

But it does provide a standard.

In a 100 years a well established standard will result in the demise of MS just like it did for AT&T. Heck maybe in 20 years.

[CNYCacher]

Respectfully - Horse Pucky

Imagine if the phone industry had had to contend with 100 different phone standards and 100 different phone companies where the phone industry would have gone. NO WHERE!

Lucky for us the early dominance of AT&T insured that there'd be one standard.  Now that that standard is firmly established guess what happened to AT&T?

The information/computing industry is not at a stage yet where there is a single standard, set of protocols etc.

Chaos would result without the dominance of microsoft and would cause more harm than good.

Is ms' standard the best? Arguable.

But it does provide a standard.

In a 100 years a well established standard will result in the demise of MS just like it did for AT&T. Heck maybe in 20 years.

Please name one "standard" that microsoft came up with that we need?  All of the best standards are opens standards, like HTML, XML, CSS, DHCP, ASCII, POP, SMTP, HTTP, JAVASCRIPT.  Microsoft works AGAINST standards, and tries to replace them with proprietary formats.

Your assertion that a company needs to be behind a particular standard in order for it to become widely adopted is false and without support.  As counterexample I give you: the internet.  Microsoft was in no way involved with anything to do with the internet until IE overtook Mozilla in market share, and then they began a push to leverage the market share of IE in a way to take over the format of the internet. For example: Active X.  All the while they are stifling the growth of the web by aggressively promoting their out-of-date and non-standards-compliant browser.  The entire world-wide-web as a whole has unrealized potential because most people are using Microsoft's non-standards-compliant browser.

PS.  Please limit analogies to occasions when they are needed so that people can understand the subject at hand.  We don't need to talk about the phone system for participants in this discussion to understand how computers and software work.

[Werewolf]

Your assertion that a company needs to be behind a particular standard in order for it to become widely adopted is false and without support.  As counterexample I give you: the internet.

Invalid example. The internet was essentially created by the Pentagon to insure that it could communicate with the numerous geographically diverse HQ's in time of war even with pieces of it missing.

AND GUESS WHAT? It uses a single standard protocol. Without a single standard the internet would not exist as it does today.

Just look at how much trouble it is turning out to be to just to add another 3 digits to the standard IP address scheme. Imagine if there were a 100 standards each with it's own net. People could only communicate with others on the same net.

Microsoft was in no way involved with anything to do with the internet until IE overtook Mozilla in market share, and then they began a push to leverage the market share of IE in a way to take over the format of the internet. For example: Active X.  All the while they are stifling the growth of the web by aggressively promoting their out-of-date and non-standards-compliant browser.  The entire world-wide-web as a whole has unrealized potential because most people are using Microsoft's non-standards-compliant browser.

Irrelevant. I'm talking operating system standards, communication standards not applications and that's all IE, Mozilla, et al are apps, programs - and it sure would be nice to have a single app standard that would compile on any processor or platform. (ever try to compile a C++ program written for a Mac and have it work right out of the box on a PC or vice versa? A real pain in the behind).

PS.  Please limit analogies to occasions when they are needed so that people can understand the subject at hand.  We don't need to talk about the phone system for participants in this discussion to understand how computers and software work.

Unfortunately it takes one communications revolution to extrapolate what would happen to another.

The phone system is a perfect analog to the computer revolution. It was a hodgepodge of systems, multiple poles, wires, switching protocols etc. A freaking nightmare, chaos. Google pictures of an early 20th century NYC street and see for yourself. People often as not couldn't talk to a neighbor across the street because they were on different systems.

The same holds true today with computing protocols. Think about all the emulators out there, the multitude of ODBC drivers etc. Chaos - because there just isn't a single standard to make it so one computer can talk to another and run the same programs.

We're getting there - slowly but surely and mostly due to innovative thinkers.

Imagine how much easier it would be though if there was just a single OS, a single database file standard, a single communications standard, a single graphics standard, etc.

Competition is a wonderful thing that encourages creativity - most of the time.

The computer revolution isn't over though and until it is a giant like MS is necessary to hold the whole thing together, give it unity and keep it going.

[2swap]

Isn't it funny that MS eventually returns to the real standards? The new versions eventually have a POSIX subsystem, the SMB protocol was originally used between Unices before it was incompatibly changed by MS (the original Samba developer thought that the news that Samba could interchange data with Windows was fake), the internet is a set of protocols (TCP, UDP, IPv4, IPv6, HTTP, SSH, FTP, bittorrent, etc) which are open and can be implemented on all sorts of systems, DOS was trying well to remain compatible with CP/M.

MS used and (often changed incompatibly) the standards it could find if they pretty much sucked and ignored the ones, which didn't. if it never existed, there would be other and probably more compatible systems.

[toysoldier]

The phone system is a perfect analog to the computer revolution. It was a hodgepodge of systems, multiple poles, wires, switching protocols etc. A freaking nightmare, chaos. Google pictures of an early 20th century NYC street and see for yourself. People often as not couldn't talk to a neighbor across the street because they were on different systems.

Microsoft tried to lock users into using their overpriced and unsafe operating systems, office suite and other products, by storing the user's data in proprietary, undocumented formats and using proprietary protocols. In the telephone analogy, it would be a public phone system that only works with expensive, unreliable handsets manufactured by Microsoft. Luckily there is an alternative universe out there, for those who do their homework.

[RevDisk]

With all this talk of businesses that are supposedly too big to fail...

Isn't this what anti-trust laws are supposed to protect our economy against?

What would happen to the computing world if Microsoft suddenly simply ceased to exist?  No OS/Server/Office support.  No custom module support for CRM.  No support for enterprise database systems.  Information oriented business would grind to a halt.  They've been hauled in to court several times for monopolistic practices and antitrust suits.

Is Microsoft too big to fail?  Would it then by default have a monopoly on thier sector of the market?

If MS went under?  Either someone would buy up the pieces, or someone like NSA would open source it. 

I'm not totally familiar with the details, but I do know the NSA has had direct access to all OS source code cranked out by Microsoft.  This isn't tin foil hattery, it's part of their core mission.  They make technical recommendations to Microsoft to make the product more secure, so the US government has more secure computers.   As not to play favorites, they have done the same thing for Cisco products, Oracle, etc.  Hell, they wrote a variant of linux, SELinux that is a pretty good concept.  If occassionally difficult to administrate.  If you don't think that there's a vault somewhere on Ft Meade with the source code for every OS release, you must be taking pharmaceuticals on a recreational basis.

If Microsoft was somehow magically disappeared, the source code would probably be released or given to another company to maintain.  For legitimate national security purposes.  And enough businesses would lobby Congress to Do Something, that someone (or many someones) would take over.  Maybe not well, but enough to limp by.

 
It'd be pretty much the same for any critical infrastructure across the country.  If someone screwed up bad enough for the infrastructure company to bomb, someone would take over the job.  May do a worse job, may do a better job.  Probably have a few transfer problems, but they'd be sorted out eventually.

Remember Enron?  Company exploded, but natural gas and electricity is still flowing. 

[AZRedhawk44]

If MS went under?  Either someone would buy up the pieces, or someone like NSA would open source it. 

I'm not totally familiar with the details, but I do know the NSA has had direct access to all OS source code cranked out by Microsoft.  This isn't tin foil hattery, it's part of their core mission.  They make technical recommendations to Microsoft to make the product more secure, so the US government has more secure computers.   As not to play favorites, they have done the same thing for Cisco products, Oracle, etc.  Hell, they wrote a variant of linux, SELinux that is a pretty good concept.  If occassionally difficult to administrate.  If you don't think that there's a vault somewhere on Ft Meade with the source code for every OS release, you must be taking pharmaceuticals on a recreational basis.

If Microsoft was somehow magically disappeared, the source code would probably be released or given to another company to maintain.  For legitimate national security purposes.  And enough businesses would lobby Congress to Do Something, that someone (or many someones) would take over.  Maybe not well, but enough to limp by.

 
It'd be pretty much the same for any critical infrastructure across the country.  If someone screwed up bad enough for the infrastructure company to bomb, someone would take over the job.  May do a worse job, may do a better job.  Probably have a few transfer problems, but they'd be sorted out eventually.

Remember Enron?  Company exploded, but natural gas and electricity is still flowing. 

So... Bill Gates then has no inherent right to go John Galt, and stick his closed-source designs in a fireplace when he's fed up with the world?  He's too important?  He has dominated the market?

(I know, some of you just threw up in your mouths a little at the parity of Galt to Gates.)

Isn't that a monopoly?  Not only does it stifle competition during good economic times... it is detrimental to long term industrial and market safety during recessions or depressions.  Here then is a strong case for open standards and separating your eggs out from just the one basket.

AIG was too big to fail?  They had that much market share that they would have shattered the financial system had they gone under?  The remainder of the insurance market could not have accepted those contracts?

I somehow doubt it.

And... if they were that big, then they had to have been a monopoly.

Let's stop chasing the Microsoft opensource/closesource argument and look at what a dominant vendor means to any market segment in the case of a collapse of that vendor.

AIG:  Insurance.  At any given time, how many contracts are actually claimed against?  Less than 1%, I would hope.  That means that the consumers of insurance simply need to stop paying AIG when the company sinks, and obtain a new contract elsewhere.  No harm, no foul for 99% of AIG's customer base.  Or whatever percentage are not actively pursuing a claim.  Huge boom for the remaining insurance companies.  Probably need to hire to accomodate all this new work.

Fannie/Freddie:  Mortgages.  A loan for X dollars, repayable over a typical 30 year span, for about 2*X dollars.  In the event of default, reposession is very easy.  Hard to hide or steal a house, and insurance covers destruction via fire or other causes.  All in all, pretty safe market until you start lending to washouts in the school of life.  Most of those mortgages, the vast majority, are in good standing.  Let the company go under, declare bankruptcy and sell its assets (those loans) to level the books as well as possible.  Borrowers pay Wells Fargo, BoA, et cetera.  Whoever bought the paper on the house.  Boom for the banks that didn't make idiotic lending practices a standard.  How are they SO BIG that they can't be let go under?  Deadbeat owners still default, whether the bank is solvent or not.  Responsible borrowers still pay, whether the bank is solvent or not.

I fail to see any cogs falling off the wheels if these "critical" companies fail.  And if they have more control over the market than their peers in industry then they can easily be muscling the market, thereby creating an antitrust condition.

[RevDisk]

So... Bill Gates then has no inherent right to go John Galt, and stick his closed-source designs in a fireplace when he's fed up with the world?  He's too important?  He has dominated the market?

(I know, some of you just threw up in your mouths a little at the parity of Galt to Gates.)

Not when representatives of his company signed agreements with the US government specifying access to the source code.  I don't think John Galt would have a problem with a contract of the exchange of intellectual property for money and services.   In this case, source code for cash and technical assistance.  Microsoft got billions of dollars and technical assistance that is worth significant worth in its own right. 

In this case, I don't think the NSA is doing a bad thing either.  They are protecting the public good by publishing recommendations for securing the US IT infrastructure, which is a legitimate function of government.

Isn't that a monopoly?  Not only does it stifle competition during good economic times... it is detrimental to long term industrial and market safety during recessions or depressions.  Here then is a strong case for open standards and separating your eggs out from just the one basket.

No.  Because Linux and Mac are (relatively) common alternatives.  You could argue that Microsoft uses illegal business practices, especially in stifling competition for their non-OS markets, but you'd be hard pressed to argue Microsoft is a monopoly.  Every Microsoft product has an alternative.

That said, the US government should NEVER under any circumstances used a proprietary format.  It's just good sense for everyone.  If you use non-proprietary open standards, you are extremely unlikely to get tied to one vendor.  Additionally, citizens should be able to access information from their government without a mandatory purchase of software from any one particular company.  Additionally, if a contractor supplying the tools for working in said open standard exploded, they could easily migrate to another vendor or implement a solution themselves. 

AIG was too big to fail?  They had that much market share that they would have shattered the financial system had they gone under?  The remainder of the insurance market could not have accepted those contracts?

I somehow doubt it.

And... if they were that big, then they had to have been a monopoly.

Let's stop chasing the Microsoft opensource/closesource argument and look at what a dominant vendor means to any market segment in the case of a collapse of that vendor.

AIG:  Insurance.  At any given time, how many contracts are actually claimed against?  Less than 1%, I would hope.  That means that the consumers of insurance simply need to stop paying AIG when the company sinks, and obtain a new contract elsewhere.  No harm, no foul for 99% of AIG's customer base.  Or whatever percentage are not actively pursuing a claim.  Huge boom for the remaining insurance companies.  Probably need to hire to accomodate all this new work.

Fannie/Freddie:  Mortgages.  A loan for X dollars, repayable over a typical 30 year span, for about 2*X dollars.  In the event of default, reposession is very easy.  Hard to hide or steal a house, and insurance covers destruction via fire or other causes.  All in all, pretty safe market until you start lending to washouts in the school of life.  Most of those mortgages, the vast majority, are in good standing.  Let the company go under, declare bankruptcy and sell its assets (those loans) to level the books as well as possible.  Borrowers pay Wells Fargo, BoA, et cetera.  Whoever bought the paper on the house.  Boom for the banks that didn't make idiotic lending practices a standard.  How are they SO BIG that they can't be let go under?  Deadbeat owners still default, whether the bank is solvent or not.  Responsible borrowers still pay, whether the bank is solvent or not.

I fail to see any cogs falling off the wheels if these "critical" companies fail.  And if they have more control over the market than their peers in industry then they can easily be muscling the market, thereby creating an antitrust condition.

Said cogs donate lots of money to politicians and lobbyists.   AIG, Fannie and Freddie gave out a lot of bribes, and they wanted a nice return on their investments.  It really is that simple.