Remember those massive antitrust cases against Microsoft? Think of all the scarce resources devoted to prosecuting Microsoft and used by Microsoft to defend itself. I opposed those cases for two reasons:
- Microsoft dominated only when their products were better than others. I switched to Word because WordPerfect for Windows was horrible. I switched to Internet Explorer (and then FireFox, Chrome, and Safari) as they got better than Netscape and Mosaic (?).
- Competition is very powerful. Apple is making huge inroads into the PC market. Google is dominating Microsoft in many areas. And operating systems for tablets and smartphones are leaving Microsoft in an unenviable position of trying to catch up.
According to Motley Fool (though not in these words), these two points are important for understanding the future for Microsoft, its strengths and its weaknesses.
The rise of tablets and smartphones has shaken up the once dominant “Wintel” PC paradigm. In an attempt to re-establish its supremacy, Microsoft (NASDAQ: MSFT) designed Windows 8 to be a hybrid operating system, useful on a variety of platforms.
But Windows 8 adoption has been poor -- consumers seem baffled by the changes. Meanwhile, Windows tablets are selling poorly, and Windows Phone remains in fourth place. Can Microsoft turn things around, or should the company cut and run?
Windows 8 has failed
Microsoft released Windows 8 last October. The new version of Windows was the biggest redesign of the operating system since Windows 95. Unfortunately, consumers seem baffled by the changes, and Microsoft’s hardware partners have been public in their disappointment.
There are two ways to keep industries competitive in the long run without resort to antitrust laws that are often ineffective (and frequently downright anti-competitive themselves!):
- Promote free trade. Don't let fat-cat monopolists use trade barriers to enhance their monopoly power.
- Promote easy entry into industries. Don't let the fat cat incumbents bribe politicians into making rules/laws that inhibit competition from new entrants.
And always remember the sad truth that most antitrust policy can be summarized this way:
- You must compete.
- You must not win.