MS has no monopoly!

by Steve Anglin

Microsoft has no monopoly on Windows. Specifically, that's because of the increasing competition on the server, PDA, cell phone, and even the desktop.


On the server-side, MS Windows products such as Windows NT, Windows .NET Server and the like face significant competition with established UNIX servers from HP, IBM, and Dell. Of course, Linux has increasing market share at the expense of Windows and UNIX, and has increasingly gained favor with the open source and Java developer communities. Gartner and other research houses have Windows on the server-side anywhere between 22%-35% where UNIX and Linux have the majority share at around 50-60% combined. The remainder belongs to Sun's Solaris OS, Apple's Mac OS X Server, and other OS. Given this, Microsoft does not have a monopoly in this area.


According to a recent USA Today article and Probe Group, Microsoft only has a 6.8% market share with its MS Pocket PC OS for PDAs and other handheld wireless devices and only 2.1% with its MS Smartphone OS for cell phones (mainly Orange in Europe). The Symbian OS leads with 54% followed by the increasingly popular Linux with 30% and Palm OS with 5.8%. With Java becoming the leading and accepted development platform for wireless devices and cell phones, look for Microsoft to be challenged even more in this area, despite Microsoft's recent deal with Motorola in which Motorola will sell phones with MS Smartphone sometime later this year. Certainly though, Microsoft is not a monopoly here in this healthy, competitive environment.


Surely though, Microsoft has a monopoly here. Right? Well, they might have a "virtual monopoly" in this area, but in reality, Microsoft is losing market share to Apple's Mac OS X and PC desktop systems running more consumer friendly flavors of Linux such as Red Hat Linux, Lindows, and the like. Research indicates that Microsoft may have anywhere from 89%-95% market share depending on who you ask. Average that out to around 91-92%; you might have a somewhat accurate number. Anyway, this does not constitute a true monopoly. However, Microsoft's behavior complicates this because the R&D investment in Windows for the desktop may not be there given the security flaws and issues that seem to come up with every release. But still, Microsoft is only a virtual monopoly here.


In conclusion, when I go to an open source or Linux conference and hear developers say that Microsoft is a monopolist, they're wrong in the pure sense of the word monopoly. At least, that's what I think, and we need to be careful with the use of this word, monopoly. That's all.

What do you think?


2003-07-31 20:26:34
Not a monopoly?
I'd be curious to know whether an economist considers 91 or 92% a monopoly. Likewise I'd wonder whether a biologist considers a population dominated to 91 or 92% by a particular subspecies to have genetic diversity.
2003-08-01 11:36:11
Monopolist model
Saying they are not really a monopoly is useless. Calling them one is useful as their behavior is consistent with that of other corporations in the past that were monopolists. So if I'm wondering how Microsoft will behave in response to a lawsuit, competitive threat or consent decree, I might say, "How did other monopolists act when confronted with similar situations?" I have found this to be a reliable shortcut to predict their actions.