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Date:      Thu, 18 Nov 1999 17:53:36 +0000 (GMT)
From:      Terry Lambert <tlambert@primenet.com>
To:        jcm@dogma.freebsd-uk.eu.org (Jonathon McKitrick)
Cc:        crh@outpost.co.nz, tlambert@primenet.com, chat@FreeBSD.ORG
Subject:   Re: Judge: "Gates Was Main Culprit"
Message-ID:  <199911181753.KAA15939@usr02.primenet.com>
In-Reply-To: <Pine.BSF.4.02A.9911181427120.301-100000@dogma.freebsd-uk.eu.org> from "Jonathon McKitrick" at Nov 18, 99 02:29:41 pm

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> Since you seem to have a clear picture (pardon the pun) of this whole
> debate, could you explain whether the salient points from this discussion
> can support the premises we have been debating?

I can try...

> Is it possible for company to cause the adoption of lesser
> technology purely by business/marketing tactics?

Yes.  It required the ability to wield what is called "monopolistic
power" in the marketplace.  If you can wield this power, you can
subvert normal free-market pressures, and by subverting, ignore them.

I should probably point out at this juncture that the U.S. is not
entirely a free market, in the strictest sense of the word, mostly
because the process is imperfect (but better than most).

There was a recent ABC news special entitled "Is America Number One?",
which examined the question of what it takes to be an economic
superpower.  America (in this case, referring to the U.S. only),
has many regulatory barriers that other countries do not have,
many of which are not related to the idea of the greater good
(e.g. environmental law barriers are for the greater good, but
business licensing and zoning restrictions aren't).

The narrator was able to set up a business in New York, widely
known in the U.S. as a huge bureaucracy with a high relative
corruption and large special interest imposed regulations, in
particular trade union politics, in four weeks.  A similar
experiment in India resulted in the narrator giving up after
two months.  In Hong Kong, the narrator was able to start a store
in a mall in 24 hours.

Clearly, then, regulatory barriers are important, but they are
not the only barriers in the way of optimum economies; some of
the other factors are: seperation of commercial and criminal
justice systems, strong intellectual property laws, uniform
enforcement of laws and business regulations, availability of
skilled labor, the ability of foreign nationals to own property
or businesses (this is a particular problem for Japan), etc..

It was also pointed out that one in every five Silicon Valley
companies was started by a foreign national, and that one of
every three scientists and engineers in Silicon Valley are
foregin nationals.


So "Is America Number One?"; "Yes" was the answer, in terms of
overall opportunity for anyone, regardless of origin, to realize
value through their own labor (sometimes called "sweat equity").

But part of this is the fact that the U.S. has regulatory
barriers which are related to the idea of the greater good;
and one of these barriers is the regulation of monopolies.


People in this discussion seem to range on a luntic fringe on
two sides of a spectrum, with one end labelled "all monopolies
are evil" and the other labelled "monopolies are the natural
result of superb capitalism, and therefore by definition good".

The U.S. is not free of monopolies.  They abound.  But each of
them are subject to stricter government regulation than other
non-monopoly buisinesses, in order to _prevent_ them from
unduly interfering with normal free market forces, and thus
detracting from the greater good.


> What *really* was responsible for the success of BetaMax over
> VHS?

You mean "VHS over Betamax".

There are two schools fo thought.  The first is the one that
is currently attributed to Sony, the inventor of Betamax; it
say "VHS won over Betamax because of recording times".

I personally do not subscribe to this view, since recording
times were an arms race, and there was never more than a six
month lag between the two.  I have also been unable to obtain
any official confirmation of this hear-say claim that this is
Sony's position in the matter.

I think that it is far more likely that the Universal-Disney
copyright infringement suit against Sony, which did not name
either JVC or Pioneer, who were producing VHS recorders at
the same time, has a chilling effect on the availability of
movies for Betamax, and a concommitant chilling effect on the
availability of software titles for the format.


To paraphrase, I think that it was the availability of
software that people wanted to run that ultimately decided
the winner.

Given Bill Gates press statements last night about what he
was willing to do about a settlement, and what was not open
to negotiation (content of Windows, opening source code to
Windows, third party modification of Windows), it's pretty
clear that he believes that availability of software would
carry the day for the OS, as well, and that a split along
OS/Application companies lines would be of least harm to him.

In fact, if you follow the trade press, you will see that
Microsoft has already reorganized into OS and other seperate
business groups months ago.  I think the only question is one
of whether they will let Bill dictate that the divisions occur
where he's already sewn in the zippers, should a settlement
negotiation take place.


					Terry Lambert
					terry@lambert.org
---
Any opinions in this posting are my own and not those of my present
or previous employers.


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