Everybody's Doin' It

Last month, my 10-year-old son begged me to let him see a particular movie. For several reasons, I said no. My son tried to justify his request by arguing, "All my friends have gone. Everybody's doin' it. Why can't I?" I can't blame him for trying that argument. It occasionally worked for me when I was his age. But it lacks imagination. I told my son that if he uses the everybody's-doin'-it argument, my answer is automatically no.

I find it amusing that the entire Microsoft defense against the Department of Justice (DOJ) has boiled down to "everybody's doin' it." Microsoft has issued subpoenas against every major operating system (OS) vendor, including Apple Computer, Caldera, IBM, Network Computer, the Santa Cruz Operation, and Sun Microsystems. Microsoft is justifying its practices by saying, "Microsoft intends to show that every other major developer of OS software has incorporated support for Internet Standards, including Web functionality, into its products."

Microsoft goes on to say that "the DOJ and States also allege that Microsoft has improperly prevented OEMs from modifying the Windows boot-up sequence and the initial Windows screen. Microsoft intends to show that other developers of OS software also prohibit OEMs from modifying their copyrighted works."

If Microsoft's OS competitors are bundling Internet-based software, including browsers, and preventing OEMs from modifying their initial OS screen after boot-up, why can't Microsoft do the same? Does having a larger market prevent Microsoft from doing the same things as its competitors? I think the question is worth examining, but rather than look at Windows 95 and Win98, I'll take the Windows NT perspective.

Everybody's Bundling
In September 1996, Windows NT Magazine reviewed 16 NT-based Web servers. At the start of our testing period, 32 Web servers were available for NT. During testing, Microsoft announced it would bundle a Web server with NT Server 4.0. Within a few weeks, vendors withdrew 16 Web server products from our test--and from the market. We tested the remaining 16 Web servers, but before the issue went to print, several more vendors withdrew from the market. Recently, out of curiosity, I checked each of the reviewed packages' Web sites. Of the 16 products we reviewed, 3 now exclusively focus on e-commerce, 4 are no longer supported, and 1 is a niche product--only 4 of the products remain as general-purpose Web servers.

The point is that Microsoft can have a big impact on a market by bundling its software for free with its OS. Are other server OS vendors bundling Web server software? Yes. So if the everybody's-doin'-it defense holds up in court, this situation is perfectly legal and acceptable. It's simply a way to do business.

One Step Further
Web server software is one thing, but what if a vendor were to take bundling a step further? What if Microsoft were to bundle SQL Server free with NT Server 5.0? Would that move change the market share picture for database products such as Oracle, DB2, Sybase, and Informix?

Oracle has already thrown down the gauntlet by bundling a free five-user version of Oracle 8.1 with NetWare 5.0. NetWare 4.0 users can pick up a copy of Oracle for $15. In addition, Oracle is offering all developers free copies of Oracle 8. If Microsoft applies the everybody's-doin'-it principle, then Microsoft is completely free to bundle SQL Server with NT Server?

Sam Jadallah, a Microsoft vice president, said, "We don't need to give away SQL Server. There's tremendous demand for the product. However, we will remain price competitive, so if the users demand \[SQL Server bundled with NT Server\], we will look into it."

David Appelbaum, Oracle's vice president of NT products, said, "If Microsoft bundles SQL Server with NT Server, then we would want the opportunity to bundle Oracle 8 with NT Server as well."

Just Say No
But wait. There's more. What happens if a vendor integrates a Web server (or database server) into the OS? Clearly such integration is the intent with Internet Information Server (IIS) and NT Server 5.0. NT Server 5.0 simply won't work without IIS. This scenario illustrates that the everybody's-doin'-it principle can dramatically affect your ability to choose the product you prefer. Why would you load a competing Web server on top of IIS and NT 5.0?

A logical assumption is that market share for a product increases dramatically when the product's price drops to zero. Competing with a product that's bundled for free is tough. (Competing with a product that's integrated is nearly impossible.) Perhaps the DOJ should just say no and force Microsoft to come up with a better argument. Worked for me.

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