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Technology Stocks : MSFT Internet Explorer vs. NSCP Navigator

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To: Daniel Schuh who wrote (20070)6/16/1998 10:09:00 PM
From: Daniel Schuh   of 24154
 
Forget Integration. What About Choice? zdnet.com

Highly esteemed Mary Jo Foley on a topic I've always wondered about. If the lame 1995 consent decree banned per-processor licensing requirements, why won't anyone sell a PC without Windows?

The first cracks in Microsoft's carefully crafted defense turned into full-fledged fault lines during the past couple of weeks. First, a few hardware makers dared to stand up and say their customers would best be served by a choice of browsers. IBM, NEC Packard Bell and Gateway all negotiated deals with Microsoft that allow them to offer Netscape Navigator alongside Internet Explorer on certain PCs.

Now, why did they have to negotiate with Microsoft on this in the first place? The line was that they were always free to do this. Except from Michael Dell's sales guys, of course. But on to the main story.

An increasingly large and vocal contingent of non-Windows users may want Linux, BeOS or no OS preloaded on their systems, as they've told Nader & Co., as well as anyone else who will listen. But the fact is most home and professional users still want Windows. They grew up with Windows in school and/or learned it at work. Some don't even realize operating systems other than Windows exist. Microsoft can and does rightfully claim that Windows is the de facto desktop standard. (Where I differ with Microsoft is their subsequent claim that Windows Everywhere means more innovative products, cheaper applications, fewer interoperability problems.did I forget to mention complete freedom and justice for all?)

However, the reason that Windows is the standard is the area into which the DOJ can and should look more deeply. Microsoft was barred by the 1995 Consent Decree from charging OEMs for software that they didn't preload on new hardware. But the 1995 Consent Decree does not stop Microsoft from lowering the per-copy Windows 98 or NT 5.0 fees charged to hardware vendors who commit to selling greater volumes of machines running these operating systems. Microsoft does this through its so-called Market Development Agreements. Hardware makers who preload the greatest number of Microsoft products are allotted Tier-1 status, complete with all the financial and marketing privileges that status merits.


I don't get this one. The OEMs aren't obligated to preload Windows, but they won't give you a choice, because the supposedly minuscule number of machines they'd sell with something else would endanger their volume discounts? Something doesn't compute here, but then the OEMs getting permission from Microsoft to load Netscape doesn't compute either. Maybe it will all become clear in the end. . .

Cheers, Dan.
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