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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: J R KARY who wrote (3133)	5/19/1998 12:25:00 PM
From: Arrow Hd.	Read Replies (1) \| Respond to of 8219

I believe that Microsoft's arguments have less basis in fact than what existed in 1956 when IBM was hit with the Consent Decree. IBM invented punched cards, punch card machines, and everything else needed to run this type of operation plus had the patents for all of it. Microsoft was not first and is basically just another browser manufacturer who jumped on the bandwagon late so had to impose their market power inherent in PC operating systems to muscle in on this niche market to gain share. How they did this is what is in question. If they had invented the browser and bundled it into their operating system then this becomes the precedent any follow-on browser has to compete against. If Netscape follows Microsoft then it is with the knowledge that a bundled offering exists and so on so there is no room to claim damages which is essential for a claim. But that is not what happened. Microsoft is relying on others for innovation then they use market and economic power to enter the business using questionable business practices that fly in the face of anti-trust provisions. IBM also "packages" offerings but is more circumspect in how these are offered. First, most pieces of a package that can stand alone are also offered as stand alone products. The pieces of much of OS/390 can be snapped out and purchased separately. This may be a more expensive way for a customer to acquire products from IBM but it does allow for options. And the package sells for enough so that each piece has enough revenue allocation so that not only is the package profitable but the pieces that make up the package are each profitable. Microsoft could have dodged all of this if they were savvy enough to realize you catch more flys with honey than vinegar. They could have their way here with a lot less bad press and still meet their business objectives. But Gates has become so arrogant that in some ways he is now a liability to his stockholders. The DOJ will take them to the wood shed. This will cost them far more in the long run. It will cost them money and limit flexibility. The way to impose your will on the market place is to set standards early, be first, do it in steps, dont be arrogant, match business goals with the needs of your channels and end-using customers and so on. They will learn this the hard way.