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Is Microsoft too big for our own good? That's the real question, rather than the narrow focus of the current Department of Justice anti-trust investigation which turns on whether Microsoft's Internet Explorer is an add-on or an integrated part of the latest version of Windows -- a matter of arcane semantics which will enrich corporate lawyers, but not society.
Microsoft's argument is that we computer consumers have never had it so good -- there's more software with more power available at lower prices than ever before, so how could we possibly complain?
Even though the Microsoft argument is valid in the short-term, the long-term vitality of the huge and growing digital-information industry demands that Microsoft be broken up.
Why? Suppose you're a bright young programmer who comes up with something useful and novel. You put it on the market, it takes off, and a few months later, Microsoft releases a similar program -- bundled it with Windows so consumers get it at no extra charge.
How long are you going to stay in business? The folks at Netscape are wondering about that now.
And what does this tell other bright young programmers? That there's no hope of surviving the Microsoft juggernaut. Bright young people will turn their talents to other pursuits, perhaps music videos or designer drugs; they won't make software.
America's software industry will decline; the innovations will appear in other countries where Microsoft is not so dominant, and our nation will be less prosperous.
Our auto industry caused similar national woes. By the 1950s, it was a stodgy Big Three ogilopoly. American talent went elsewhere. But foreign carmakers were still innovating and their bright imports started winning market share: capital and jobs that could have stayed in this country moved to other nations.
So there's little question that it's in the national interest to rein in Microsoft. But it's not in the national interest to punish people for being successful, either, so how to break up Microsoft without being punitive?
Break it into three parts, with its shareholders maintaining the same relative stakes. The three parts: operating systems, applications software and publishing.
The operating systems (MS-DOS, Windows) should be a separate company from the applications software (Word, Office, etc.) because Microsoft application developers currently have access to new operating system features and undocumented details, giving them an unfair edge over programmers at other shops, who don't know what will be in the next operating-system release and have to rely on the documented features.
Granted, Microsoft insists there's a Chinese wall
between the two divisions now, but anyone who's examined
Microsoft application software with a disassembler will
find all manner of undocumented system calls. Microsoft
application programmers know things about the operating
system that other people can't know, and that's an unfair
advantage.
Separate the two, so that Microsoft's application programmers play on the same field as Corel's or Lotus's -- or the nerd hacking in the wee hours who might come up with something really interesting.
As for Microsoft Press, the worse the documentation with Microsoft programs, the more likely we are to go buy a book -- often a book published by Microsoft Press. This rewards the company for putting out bad manuals, and splitting the publishing from the software company would eliminate that perverse incentive.
So, set up three new corporations, divide Microsoft's empire among them, issue shares proportionately to current Microsoft stockholders, and the competition and innovation will come -- sort of like long-distance service after AT&T was broken up in a similar fashion.
It's either that, or see all the interesting future software coming from Russia, India or some other country with a free market.
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