Monday, June 02, 2003

IE and the OS 1:01:21 PM • • comment [] • Google It! Joe Gregorio writes: Microsoft, trying to squeeze more revenue from operating system sales, looks to leverage it's monopoly in the browser market to force people to upgrade to the latest version of Windows. Why do you say that? As you (I think correctly) point out, the current monopoly Microsoft enjoys in the browser arena [*] essentially provides no leverage. IMHO, a decision to only add value to IE on future operating systems is simply making a good business move: there's no point in putting high-paid developers on a product that makes no income, right? The Microsoft revenue stream is built almost entirely of selling bits and papers [**]: you buy bits from us (in the form of a CD, a DVD, an Internet download, or an activation number), and you buy software licenses. To keep the employees paid, we need to either increase market penetration, or improve our products so that people will want to upgrade. This mechanism is well-known. So improving products is how Microsoft pays the bills (and Bill). Nobody forced people to install IE 6 (as has been indicated by so many people, it offers little features beyond IE 4!), yet they did. Similarly, nobody will force Joe to upgrade his Windows 98 . Perhaps if he sees enough value in it, he will [***]. The fact that he continues running Windows 98 (IMHO the worst OS release Microsoft made in the last 10 years) clearly shows that despite Microsoft's being a monopoly in the desktop OS market (and browser arena, and probably office suites), it still can't force customers to do what they want. If you look at all the products/technologies that started life on their own and were later incorporated into the OS, I believe you'll see a giant jump in customer value, both in quality and in features. I don't doubt that the same could be said of IE. * It certainly isn't a market, because most of us don't pay to get a browser, at least not directly. ** This is how Steve Wasserman explained it to me a month after my company (Peach Networks) was bought by Microsoft in early 2000. *** Joe, here's an offer you can't refuse: I'll buy you a Windows XP Professional as a birthday present if you only dump that junk they call 98. Disclaimer: I work for Microsoft. I own (very few) Microsoft shares. My opinions do not reflect those of my employer. I am not privvy to any internal discussions or decisions made by Microsoft on the future of IE (if I were, I wouldn't be posting). Everything I say here is based on stuff that has been publicly available on the Internet, and my own speculations.

© Copyright 2003 Ziv Caspi.