Microsoft's Next Target
The same reasons Microsoft targeted Netscape make RealNetworks key prey.
Opinion by Richard L. Brandt, UpsideToday.com, March 2000 issue
Almost from the day RealNetworks was launched in 1994 (under the name Progressive Networks), the press has wondered if Microsoft would kill off this streaming-media company. But Real, as industry folks like to call it, has proved amazingly resilient. It remains the leader in streaming-media technology for the Internet. The company says 85 percent of all Web pages that deliver streaming media use RealNetworks' technology.
But we've heard those kinds of statistics before. Remember Netscape Communications, now part of America Online? It used to have the same kind of lead but now has only about 15 percent of the browser market, according to some market watchers. Real cites Nielsen data that tracks media player downloads. Microsoft challenges those statistics, pointing to a study by PC Data indicating that most peple have both RealPlayer and Microsoft's Streaming Media Player, and estimating that 41 percent of households actively use Microsoft's product (included free with its browser).
Resistance is futile. This raises the obvious question: Will Real be the next to succumb to the Borg of the software busniess? The obvious answer: Yes.
But Real isn't Borg fodder just yet. CEO Rob Glaser learned Microsoft's competitive techniques from the inside when he was an executive there. And Real may actually know more about the media technology business than Microsoft. Glaser had a significant role in running Microsoft's own multimedia business and has now focused an entire company solely on that technology.
Glaser kept his enemy close by partnering for a while - a risky move, because Microsoft has a habit of devouring its partners after it learns how their business works. Microsoft's 30-percent equity stake in Real at least seemed to delay dinner for a couple of years, but the software giant cashed it in to go ear-to-ear against Real. And Glaser is very likely to find resistance increasingly futile.
Let's face it: It makes a lot of sense for both the browser and media player to be integrated in the operating system. An OS should give us all the technology we need to run a computer - or whatever device we are running. And if Microsoft's player becomes ubiquitous on our desktops, Microsoft will gain control over how every Web site delivers audio and video to computers and, in the future, other devices.
Clearly, Microsoft is now ready for a new meal in Real. Bill Gates himself appeared at the Streaming Media West conference in San Jose last December to show off his company's latest efforts, which were fairly impressive. When Gates takes time to address an audience of just 1,000, you know the topic is important. The company has also invested a few billion bucks in broadband delivery companies like AT&T, another indication of how vital rich media is to Microsoft.
The battle to compete. So what might keep Rob Glaser ahead of Gates besides his own ingenuity? One hugely important factor will be the decisions that come out of the Department of Justice case against Microsoft. Many of the techniques that Microsoft used against Netscape can also work against Real. Glaser testified against Microsoft for a reason.
Will a split-up of Microsoft help? Not likely. Any Microsoft OS company will still go after Real. A more important issue is whether Microsoft will still be allowed to use pricing to pressure hardware makers into giving Windows Media Player priority, as it reportedly did with Internet Explorer.
The main point is that the battle to compete with Microsoft continues. Today the battle involves Real. Yesturday it was Netscape, and many previous yesterdays brought others to their knees. Tomorrow it will be someone else. If you want to know whether Microsoft is still using its clout to bash competitors into submission, keep listening to RealNetworks. |
