Posted by: kandersen | February 18, 2009

The Microsoft Monopoly And The Piracy Paradox

The story of Microsoft has been to say the least a very interesting one. Not that it happens to be one of the most used operating systems in the world but more to the point one of the most, shall we say unethical companies who scratch claw and kill competition by hook or by crook.

Lets rewind the clock and go back a few years. Microsoft has never really done anything innovative never thought of a new product. A windows like operating system was actually invented by Digital many years before Microsoft was a leader in text based DOS systems. Apple was more innovative in graphic operating systems that Microsoft ever was. So how did Microsoft ever become the main player in the industry today.

First off, Lets compare apples to oranges. During the late eighties Apple made a few critical mistakes by pricing their computers out of the market. This still has not changed much as an Apple computer is still much more expensive than a comparable clone PC. It was simple economics which made business people pick the PC over the Apple computer. The thinking was, “why have one computer when I can have 3?”. This led to great inroads for Microsoft to sell most of the software which runs on these computers.

During this time through the late eighties and the nineties there were other choices of operating systems available, Dr. Dos, BeOS, Unix just to name a few. But why did none of them ever take off like the Microsoft operating system? Well basically Microsoft had created a network where it could cause pressure to the competing operating systems to fail.

Lets run a few examples. Dr-Dos which was a alternative to MSDOS had a difficult time gaining traction because windows 3.11 would not run on it. The parent company who had Dr-Dos at the time Caldera Software Sued Microsoft in a case which Microsoft settled out of court.
Another operating system from Be Inc known as BeOS. A superior operating system by many standards and was touted as the multimedia OS. Be had arrangements with Hitatchi to install BeOS on an internet appliance and Compaq was going to provide the option to install BeOS on their computers but back door pressure from Microsoft caused these two critical channels of distribution to be met. Be Sued Microsoft for what basically amounts to “strong arming” the distributors which Microsoft settled out of court for an unpublished amount of money to Be inc.
How about theft of technology? In the early 90’s Microsoft had stolen the disk compression technology from stac and was sued and lost to the tune of 120million dollars.

It seems that bad behavior has rewarded Microsoft in a big way. But it even goes deeper than this, Microsoft has behaved more like the mafia than a business And I will explain why.

A little known thing as the Piracy Paradox has been a big player to Microsof’s strategy. The worse thing to happen to any software company is produce a product not worth stealing. It is also true that anything that is free is not appreciated

So how can software that is downloaded for free because its valuable enough to steal make any financial sense to Microsoft at all. Well heres the trick. Microsoft has to have a new cash cow every few years. in order for it to survive it needs to sell you a new shiny box of software.

How does piracy help Microsoft? Well during every release of windows, there has been a “pirate” version which you could download. Now Microsoft will argue the point that software pirates Cost them millions but that is not true. I will provide you proof of example that shows that they have promoted and strategically used piracy to position their products in the marketplace. I suppose we need to get a little recent history.

Windows Xp is the most prime example of this. After windows 98 Microsoft released a hurried unpolished and quite frankly abortion of an operating system called Millennium Edition or “ME” We in the computer industry called it “Windows fuckME”. It was so bad that there was a class action lawsuit to get Microsoft to accept returns on the software they sold. Windows ME was something that worked great, as long as you did not install anything on it. the more software you installed the more unstable it became.

Microsoft also had been working on a operating system which was based on Windows 2000 or the more reliable server based New Technology “NT” kernel. This operating system “XP” came in basically 3 flavors. XP home, XP Pro and XP corp, Microsoft had such a PR problem with “ME” that it was forced to release XP sooner than it really wanted and was immediatly faced with the problem of getting customers to upgrade that old 98 and ME system to the new XP.. for users stuck with ME it was not really an issue but still OEM computer manufactures had been burned with the ME problem and were installing windows 2000 and not getting on the XP bandwagon.

How was Microsoft going to get this XP operating system in wide accepted use? well by golly give that shit away! Here is where the XP corp version comes into play. XP corp is a version of windows for enterprises and corporations. The beauty is that one Installation Key will install on many computers. So this version of Windows XP turns up on every tom dick and harry file share program network from here to hells kitchen. It was pretty easy to install on a ME or 98 machine without much trouble at all.

now, heres the gotcha Microsoft could have shut that Install key down in about 5 minutes but they did not, they left that thing out there for well over 2 years before they pulled the plug on it. but by then 50% of all PC’s in the world were running that version of software. the other 50 were legal, various updates and patches made it quite annoying for almost anyone to upgrade to a legitimate copy of the software, and even then things didnt get draconian on pirate versions until the new windows Vista was due to release. this is where the WGA patch came out to shut down and black screen the computers of those left who had not purchased XP or possibly just push them to the edge of getting Vista.

If you can get the general public using your product, just like a drug dealer, you have a customer for life. This is why Microsoft office is the defacto standard on office suites. Openoffice is good and its free, but anything free is not good right?


  1. […] the way of changing it or enforcement. It could be also related to another blog I posed about the piracy paradox where that may be the case of the piracy creates a market for the […]

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