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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: RTev who wrote (33452)	11/9/1999 5:12:00 PM
From: Charles T. Russell	Read Replies (2) \| Respond to of 74651

We can grant that the market freely chose to give monopoly power to one company, but the issue is whether it's good for that same market to have a single company that now exercises extraordinary control over the market. That is the question. And I'm afraid that it is a difficult answer. Hyper growth with markets related to layered technologies are ultimately driven by standards. By layering here I'm talking bout how a hardware layer interacts with firmware, firmware with software, an application layer communicates with the presentation layer etc., Basically a technological view of the 7 layered ISO Network model. In the OS market, the standard API's, standard look and feel, and implementation of widely used protocol stacks supported the evolution of the application development market evolve. Many forget that in the early days of computing, especially home brew, or home computing; a great deal of focus was placed on just getting the hardware and firmware to boot. Then primitive OSs (loaders and executives) were built to take very simple programs and run them; essentially testing the platform. Later more sophisticated OSs evolved that allowed the breadboard computer or do-it-yourself kit to interface with additional hardware like CRT, storage devices etc. As the OS matured, so did the applications that now could be written and executed on that platform. So utility that was once derived from just wires and chips slowly moved towards the utility derived from what solution the computer provided to a particular problem. More towards the application software. It was the stability of the Mac and Win32 APIs that allowed software developement orgs (SDOs) to invest heavily in the intellectual property and manpower needed to deliver applications to the desktop market. I think that in the middle stages of growth a market needs a standard bearer. In this case the standard bearer achieved monopoly status. During this time, the stability of the market and the platform fueled enormous growth. During this stage a monopoly in the OS supported innovation in the hardware and application software that surrounded it. So the monopoly was good for the industry and the consumer in the short run. But as the OS begins to resemble a commodity perhaps the monopoly power of Microsoft places the real equilibrium price of the OS at too high a level. The consumer really isn't paying for innovation anymore. They're paying rent.