Alistair NicolProject 4Final Draft2 December 1998
Recently the United States Government, primarily the Justice Department, is having an extremely difficult time determining the intrinsic legalities involved with many antitrust issues. The real question is where the line between breaking the law and not breaking it exists. A problem occurs when a company grows to an overwhelming size, dominating the specific market and in so doing crushing out the hopes and dreams of smaller more unstable efforts at success. One of the most interesting and relevant markets in which these problems exist is the computer industry.
International Business Machines in the 1960’s was a massive company deeply entrenched in providing “supercomputers” to large corporations. Apple rose out of nowhere and provided the personal computer, which, through its graphical user interface(GUI), radically changed computing forever. Microsoft rose out of nowhere as well with an operating system that hands down beat IBM’s operating system when it came to the customer. Windows, as the new operating system was called was based on the Apple’s interface immediately appealing to the IBM compatible computer world (the majority by this time). After Microsoft rose to dominance, Netscape released Navigator that turned the market around completely. In all three of these cases the larger company tried to use its devastating power to crush the opposition. These monopolistic companies are sometimes thought of as hindering the development of technology by squeezing out the opposition in favor of themselves. I disagree and feel that although in some cases it might be unethical and wrong, it is providing much needed competition to further fuel our technological progress.
Apple was born out of the garage tinkering of two college dropouts named Steven Wosniak and Steven Jobs. According to Glen Sanford, after working in Silicon Valley for a while the two decided to sell Wozniak’s computer design in 1976 named later as the Apple I. Apple did not begin to take off until 1977 when Apple II was released that had “plastic casing and color graphics.” (Sanford) By 1980 Apple III was introduced and with further sales had grown in size to several thousand employers and had spread overseas. Jobs began to work on a new project in 1979 named Macintosh. In 1983 Jobs decided that what Apple needed to “grow up” was John Sculley the president of Pepsi-Cola. The Macintosh was released in 1984 and sold very well because of the superiority of the software. The software was that much superior because of the graphical user interface (GUI) design that came with the Macintosh (Washington Apple Pi). Apple had risen out of the garage of two creative college dropouts and evolved into a company producing the best and most superior personal computer available. However, it was not to last and soon International Business Machines, the monolith of computing decided to join the personal computing industry and share in the success
In 1981, IBM joined the personal computing industry with the introduction of the 8086. Using Dos, written by Bill Gates, as an operating system the IBM 8086 was capable of competing with Apple and its operating system. The immense power of IBM was fully behind the Personal Computing Industry and quickly it was competing head on with Apple (Miller). With the introduction of the 8088 a few months later IBM took a strong advantage over Apple, by using a new operating system written by Bill Gates called Microsoft Dos, even though Apple’s product was so much more advanced in terms of the operating system. Many consumers opted to buy IBM compatible computers over Apple computers because they felt that MS Dos was a more “professional” operating system and while Apple’s operating system was too “cute”(Sanford). The 8088 was made almost entirely from other company’s components allowing ease of production and better development (IBM- History). However, the primary battle between IBM and Apple was not hardware it was the operating system. IBM’s success depended on the operating system, Dos. IBM made a wise decision and allowed other computer companies to produce clones of their product called “IBM-compatible”. IBM intentionally was trying to reduce Apple’s share of the personal computer market, which Apple had initially created.
Apple’s GUI operating system was superior to Dos and Microsoft proved this when it eventually turned its attention away from IBM and Dos and built Windows which was allegedly a copy of Apple’s GUI operating system (Sanford). Apple immediately followed with a lawsuit for alleged stolen code. The outcome of the trial was that Microsoft could no longer pursue the Apple GUI code in its Windows 1.0 it did not however prohibit Microsoft from using it in further versions (Sanford). Although Microsoft had lost the case it had won a major step in the battle of the operating systems, and now was free to use the code. IBM and Microsoft had in a way teamed up together against Apple to take over some of the market share in personal computing. Apple’s product was indeed superior and Microsoft knew that Apple had the edge therefore it stole necessary technology to catch up. These practices seem unethical and might be thought of as hindering technology but in fact it helped to fuel competition between Apple, IBM and Microsoft (Patton).
Microsoft took its new stolen knowledge and continued building
on its Windows package releasing Windows 1.x and 2.x. On the 22 of
May 1990 Microsoft released Windows 3.0 which became the largest used operating
system on all IBM- compatible computers, dominating the market (Morrison).
Many software producers made the switch to Windows and left both IBM and
Apple. More features were later added to the initial Windows 3.0
and the operating system became the basis of the majority of personal computers
(Morrison). Windows 95 and Windows 98 further took away the market
share and now in 1998 dominate ninety percent of the market (United States
vs. Microsoft). Operating Systems were not the only major battles
in the computing. Perhaps a bigger war that further illustrates the
increased development of technology was the Internet Browser battle.
Mosaic, the first graphical user interface Web browser, based
on a GUI code was produced by Marc Andreessen and other programmers at
the National Center for Supercomputing Applications (NCSA) at the University
of Illinois (Gargaro). Mosaic was the beginning of graphical Web
browsers that led the way to more improved products, like Netscape.
These graphical Web browsers and the World Wide Web had caught on quickly
and suddenly new markets were opened. Marc Andreessen and a few of
his colleagues including Jim Clark’s and his financial resources left NCSA
and started their own company in 1994 called Mosaic Communications Corporation.
Following lawsuits from NCSA the name was promptly changed to Netscape
Communications Corporation.
Soon Andreessen and his team had developed a better browser and released beta versions of the software on the Web (Oakes). In 1995 Netscape, trying to attract more investors, went public by allowing others to buy Netscape’s stock and quickly became a massive success, with stock prices soaring as high as eighty dollars a share. Netscape’s Web browser software, Navigator, had attained a virtual monopoly on the graphical interface Internet world with a market share estimated at eighty percent (Hartley). Netscape had provided a better product and were in the right place at the right time, now its stock was reaping the benefits.
Microsoft initially wasn’t that concerned with providing Internet service
applications to the average consumer. They thought that only professionals
and businesses would utilize the Internet and that Netscape was wasting
its time bothering with Web Browser. However, Netscape’s success
began to attract attention and Microsoft saw the new market in Internet
Browsing as new opportunities to expand their vast empire. Microsoft
first attempted to buy its way into the Internet business by purchasing
Netscape. (Oakes). With all of Netscape’s recent success there was
no way it was going to sell to Microsoft. Bill Gates then offered
to buy a minority share in the company for an exchange for a seat on the
board of directors, which Netscape again rejected. In August 1995,
Microsoft released Internet Explorer 1.0, “based on licensed Mosaic code”(Gargaro),
to compete with the highly successful Netscape Navigator. A noted
critic Joshua Quittner stated that Internet Explorer 1.0 was far behind
Netscape Navigator and was slower and more “clunky” (Microsoft – Press
Pages). In January 1996, Microsoft introduced Internet Explorer 2.0,
although a better effort, it was still far behind a newer improved version
in Navigator 2.0 that was so much smoother. Internet Explorer 3.0
introduced in 1996 had major improvements and some suggested that it was
actually competitive with Netscape3.0. These major improvements were
primarily in the cleaner, easier to use, more flexible interface.
In order to capture a greater market share Microsoft started giving
Internet Explorer away free to anyone who licensed its operating system
Windows 95. Netscape couldn’t compete with the giant Microsoft who
had sufficient funding from all its other software while Netscape primary
product was Navigator. 1997 brought about further changes primarily
the addition of more advanced features and Internet Explorer 4.0 This created
a serious threat to Netscape Navigator 4.0 when it came to differences
there were few to seldom. To stay alive and save its market share,
Netscape was forced to give away its browser for free and even release
its source code in order to let any programmers that wanted make improvements.
Struggling desperately Netscape called upon the help of a third party the Justice Department. Netscape sent a letter in 1996 to the Justice Department charging Microsoft with illegal conduct and anti-competitive practices. (Reback) Microsoft already hard pressed by the Justice Department on antitrust issues stopped the actions that Netscape charged were suspicious. Netscape still held the majority of the market and Microsoft decided that the only real way to take a firm hold of the market was to use the influence of Windows, their highly successful operating system.
In July 1998, Windows 98 was released. It came bundled together with Internet Explorer 4 for navigating the local personal computer and the Internet. Although another browser like Netscape Navigator could be installed on the system, many people were believed to make the transition from Netscape’s to Microsoft’s browser because of its accessibility (Netscape - Microsoft legal feud heats up). A Microsoft representative even stated “Our (Microsoft’s) intent is to flood the market with free Internet software and squeeze Netscape out of the market.” (Reback) Microsoft’s Internet Explorer was quickly striking back at Netscape and becoming the browser of choice among corporations because of its quality but mostly because of Microsoft advertising and free distribution.
Windows 98 dominates ninety percent of the market in operating systems and hence has their browser on ninety percent of users’ computers (United States vs. Microsoft). Netscape and many others believe that Netscape has a superior product and therefore should not be squeezed out of the market because another larger company wants to maintain its market share (Netscape- Microsoft legal feud heats up). Microsoft suggests that there is plenty of choice even within their operating system but especially in the market place, which browser an individual should or could use. (Microsoft to Netscape) Bill Gates president of Microsoft suggests that from the beginning all they wanted was to compete with Netscape, for a share of the booming market. They feel as though their product is more than comparable if not much better than Netscape’s and that including their browser along with Windows 98 doesn’t hinder Netscape’s opportunity and only helps make their product better for the consumer and easier to use (Microsoft – Press Pages).
The war between Netscape and Microsoft can be viewed as a hindrance
to technology however the competition between the two has fueled improved
technology and has brought lower prices to the consumer. The operating
system battle between Apple, IBM and Microsoft was also an example of a
war that although could be unethical helped to bring about major improvements
in technology. Both situations a larger company used its dominance
and market power to swing the momentum in its favor and hurting a smaller
or weaker company. In both cases however the smaller company and
assumed “loser” in these wars has not “died” but instead learnt from its
mistakes and tried to turn its initial successes around and develop new
areas to grow into. Apple has gone to simpler and more efficient
computers in the iMac and Netscape has moved on to business servers.
Perhaps they will show their incredible potential again and produce another
groundbreaking technology that will shift the whole market once more.
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