Re: How does Microsoft make so much money?
Originally posted by garyhoare
They never put out any competing products. They just put out sabotage machines that ruin the entire market.
It's like, "if I can't have it, no one can."
Microsoft does business like most people play chess or monopoly. These are known as zero-sum, noncooperative games (for me to win, you must lose). Add to this a long history of screwing over business partners and an irrational fear caused by books such as
The Innovator's Dilemma and you have a company fully willing to enter "lose-lose" situations.
Such business models fail in the long term because real economics is not zero-sum and its not non-cooperative. People like Nash proved this mathematically a half century ago.
In the short run, Microsoft has moved themselves into a niche where regular free market doesn't provide an efficient distribution of goods, in this case, they've garnered a monopoly position. Many smart companies have used their monopoly positions as an opportunity to diversify business (think GE and IBM) and to some extent we've seen that with Microsoft (Encarta, MSNBC, Slate, Expedia),
The problem is Microsoft wants to have the cake and eat it to: UltimateTV, XBox, MSN, Windows NT, Windows Media, PocketPC, Windows Mobile, IIS, Internet Explorer, Outlook, Exchange, SQL Server and Access, Office, Project, MSN Search, etc are all designed to further continue their main monopoly (the OS). We've seen that of many companies also (Ma Bell, Standard Oil).
The reality is right now in the OS, we're paying a Microsoft a whole lot of money for stuff that Microsoft didn't even invent and have long since passed into the public domain (TCP stack, compression, etc.). Microsoft knows this and has to do things that encourage lock-in: "de facto" standardization, "embrace and extend", "fear uncertainty doubt", channel stuffing, etc.
It's nothing personal. Apple's AAC/Fairplay (QuickTime) just happens to be in Microsoft's way at the moment and its all zero-sum with Microsoft. As one Microsoft executive put it to Apple years ago
about this very same issue: Apple should "knife the baby (QuickTime)."