Monopolys Essay Research Paper Do you have

Monopolys Essay, Research Paper

Do you have a computer or know someone who does. If you do then you are probably familiar with how rapidly the computer software industry grows and how quickly products become outdated. Presently the average life of a product before it is outdated is eighteen months(1). This means that if a company does not continue to produce cutting-edge products it will soon be forgotten. This is the determining factor of many companies that base their success on one product and do not spend the time and money to keep them updated. When a company creates many products and increases its workforce to keep their products “on-edge” then they are soon recognized as an industry leader and their profits grow proportional to their popularity. As a company’s product becomes the leader in its field other products begin to be designed to work with it in order to gain their own popularity and success. This is how industry standards are created. Industry standards are usually formed by the company that designed the initial product or by an association of many companies in order to insure product reliability and allow computers to work together, correctly(2). When the initial product is an operating system, which is the main software-based manager of a computer, it is used as a foundation in which to create a variety of competitive markets of cutting-edge products. Although if the operating system does not keep updating frequently then it will soon be replaced by a competing product. The time to gain the position as an industry leader could be very quick thanks to the pace of the industry, yet it can be lost just as quickly. Microsoft became an industry leader when it teamed up with business giant IBM to create one of the first Personal Computer’s in 1981(3). Microsoft’s Disk Operating System (DOS) was the software backbone of the computer. Updated versions of DOS were released throughout the 1980’s to keep hold of the market. The command-line interface of DOS was soon left in the dust by the emerging “consumer friendly” Graphical User Interface (GUI). Microsoft jumped to the lead again with the first release of the Windows dynasty, Windows 3.1 and later 3.11 for Workgroups. The already popular company began to grow stronger with its demonstrated ability to keep up with the market. Microsoft formed partnerships with other companies and grew into a surplus of fields such as networking, utility software, common applications, and entertainment. The company formed DirectX Standards which increased the variety and reliability of software and hardware that could work together in the Windows environment(4). This innovative new operating system fostered many new competitive markets in a range of different fields. It also increased the chance for a startup company to make it in the software industry. Microsoft has frequently been called a monopoly of the software industry, the reality is quite different. Microsoft’s annual revenues make up only 1% of the software industry. Their fame has come from their unmatched operating systems. Presently, 80% of the nations computers are running a Microsoft operating system. The increasing quality doubled with decreasing costs have brought Microsoft much success. It is true that Microsoft’s net worth is enormous, just as many software and computer companies. Large profits and the software business have long been paired together. The reason revenues are so high is simple, but often over looked. In any industry, no matter the product, there are raw materials needed, as well as labor and manufacture costs to refine them, and then advertising and production costs. In the software industry there is practically no raw materials, except for that of which the program is stored on. A program can be copied a hundred thousand times in no time what so ever, with few mistakes, and extremely low labor costs. This mass production brings in huge profits which sets the software industry off from the rest. Microsoft enriches competition and innovation in the software industry. The software that is produced by Microsoft is beneficial to the market. Microsoft’s monopoly provides products to consumer’s at a lowered cost. Microsoft’s monopoly does not pressure consumers to make weighted decisions. Microsoft does not use its market strength to attempt to control the internet. What would have happened if Microsoft did not exist, what would be different, what would have stayed the same. The Department of Justice’s case restricts Microsoft from aiding competition and innovation in the software industry. Microsoft enriches competion and innovation in the software industry. Microsoft’s own success depends on creating an environment where competion and innovation can flourish, and in which other companies can succeed(5). If other companies products do not work with the Windows environment then there is no use for it. If Windows cannot provide a healthy, product-friendly environment that allows companies to gain from it, then they will use one that can. Approximately 2.2 million independent software vendors in the U.S. and 5 million worldwide design products to work with Windows(6). In a study of 200 randomly chosen companies, 91% said Windows had a positive impact on their business(7). Windows users use the operating system because it is a well designed, reliable environment. The versatility of the environment allows businesses to complete their tasks and do so in a quick and cost