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Godzilla Redeux: Why Microsoft May Rule the World
``` [When I was carrying on a while back about the systemic market failures that allow Microsoft to impose inferior software upon the world, many of my friends pointed at Exchange as a counterexample. A spectacularly inferior product, Exchange was not making a dent in the market of Lotus Notes, of which it was a poor imitation. Now, however, the Internet is awash with poor oppressed souls choking on Office '97, a software suite that includes something called Outlook, whose purpose is to integrate Exchange into your whole way of life. Even though I don't use Outlook for my own work, I am already being routinely shafted by it. For example, when someone forwards an RRE message by attaching it to a message to a friend, the attached message is treated as a full-fledged message object with all of the usual commands, including the command to "reply" to it. "Replies" sent in that fashion go to me, of course, and not to the person who created the attachment, which is the functionality that the user is most commonly expecting. But that's nothing in the big scheme of things. That choking sound you hear also includes more serious matters such as backward compatibility problems, basic architectural flaws in ActiveX security, attempts to subvert the Java standard, MSN mailer crashes, and much more. Verily, a cancer is growing on the economy. The really gross part, as Nathan Newman explains, is that the Intel/Windows standard has given personal computers a reputation for being far too difficult to use, with the result that (so goes the conventional marketing wisdom) average members of the mass market are waiting around for something that's much more like television. Has the democratizing potential of the personal computer revolution been squandered? More precisely, have pathologies of the market, specifically market failures associated with network effects, cut that potential off at the pass? The best products are not winning, and the winning strategy is evidently not to market the best products.]
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Date: Tue, 22 Apr 1997 09:01:04 -0700 (PDT)
From: Nathan Newman
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Vol 2, No. 3 April 1997
GODZILLA REDEUX: WHY MICROSOFT MAY RULE THE WORLD -- by Anders Schneiderman, PhD., aschneid@pacbell.net
On April 6, Microsoft made an earth-shattering announcement: it was buying WebTV. It wasn't a particularly sexy event--much less so than the battle over Internet pornography a few weeks before. And it didn't help that some commentators didn't understand its significance. The New York Times quoted Montgomery Securities analyst David Readerman, who said the move was "a baccarat table bet on the merger of PC and TV." It's a lot more than that. This is about Microsoft's plan to take over the world.
Many of us thought Microsoft's plans for world domination might by stymied by Network Computers (NCs). Chairman Bill had done an amazing job when he turned Microsoft upside down to catch up on the Internet (see "Godzilla Uber Alles," E-Node v. 1 No 2). Few large corporations have ever made such a radical change in such a short span of time. But NCs pose a more fundamental challenge to Microsoft's core: their incredibly bloated software. Today, Microsoft Office--Word, Excel, and PowerPoint--take up over 40 diskettes. To beat NCs, "thin," stripped-down computers running slimmed software, Microsoft would have to put its incredibly bloated software on a crash diet. That would take a change in Microsoft's corporate culture which was almost impossible to pull off.
But by buying WebTV, Microsoft has demonstrated that it may once again do the impossible. WebTVs are computers that are even more stripped down and simplified than NCs. If Microsoft can get WebTV to thrive, it may be able to change its corporate culture enough to win the race for NC software.
To do so, Microsoft will have to crush its most dangerous opponent: Java. As I discussed in a previous column, Java was designed to be "cross-platform": you could write a Java program on a Mac and it would run on a PC, a Unix box, etc. If Java survives as a cross-platform language, Microsoft's traditional advantage of owning the operating system on most people's desktops would disappear.
For the past few months, Microsoft has been trying to solve that problem by creating a Windows-specific version of Java that would be to standard Java what Spanglish is to Standard English. To get developers to support its dialect of Java, Microsoft is building tools to make creating complex Java programs faster and easier (since Java's tools are still pretty limited). Sun, Oracle, and IBM have all denounced the move, and Sun's Javasoft division launched the "100% Pure Java" plan to counter it.
If Microsoft was planning on beating those three in the PC market, it'd have a hard time. But if it can ramp up WebTV, then it's a whole new ballgame. Remember, today only about 15% of all households in the U.S. have a PC. Since over 90% have phones, WebTV has a huge potential market. If Microsoft can own even a small slice of that market, it will own the operating system of the vast majority of users. Between WebTV, Windows, and whatever portion of the NC market it gets, Microsoft could force most developers to use its standards for Java.
Of course, at that point Java will have lost its major selling point: it won't solve cross-platform problem. But Microsoft will have solved that problem for us. Programmers won't have to worry about how to port a program from one platform to another because there will be only one serious platform left standing: Microsoft's.
Microsoft already has a little help in its Java-mutating project, and ironically the help comes from Sun. On April 3rd, WebTV and Sun announced that they were working together to create a PersonalJava Applications Programmming Interface or API (an API is a library of code that defines a set of standard computer functions, which can range from handling a program's menus to creating and deleting files). This API would let Java programmers use some of the unique features of a TV, features that, according to WebTV, would help with "games and smoother integration with television content." In short, a few days before Microsoft bought WebTV, Sun had already undercut their argument that Java should operate the same on every device.
The real issue comes down to, can Bill make WebTV take off? WebTV hasn't done very well so far, and as far as I can see, that's for two reasons. First, the initial advertising campaign was terrible. For some bizarre reason, WebTV ads pretended PCs didn't exist. They simply sold WebTV as a way of getting to the Internet. That strategy was going to get killed by the "Uncle Bob" syndrome. When most peole buy complicated things like computers, they ask advice from a relative or a friend. If they ask Uncle Bob, and Uncle Bob has spent years buying and fiddling with PCs, you can can bet Bob is going to say, if you want to surf the Net, don't waste your time on a toy like WebTV.
The only way to fight the Uncle Bob syndrome is to go head-to-head against PCs. The fact is, PCs are just too damn hard. Even people like Nathan and I waste hours trying to get our machines to work. In a nation of people who have trouble programming their VCRs, this is the PC's Achilles' Heel. The ads should have taken a page from Apple's TV ads and brashly said, WebTV is for you if you aren't a nerd or a macho sucker--i.e., Uncle Bob--if you don't want to spend a lot of money and end up owning what amounts to a very expensive doorstop. A more aggressive, hip, in-your-face approach, combined with the recent 25% price cut in the cost of WebTV, could do the trick.
The second problem with WebTV was that there was no way to know whether it would survive. If you bought it, you couldn't tell whether anyone would be selling it a year from now. But if Microsoft is backing it, most people will figure it will survive.
So is Microsoft going to rule the computer world? If Microsoft runs a sharp campaign for WebTV, if it can really take this gamble, I think it's got an excellent chance. As far as I can see, there's only one player left who can stop it: the subject of my next column.
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