Rapidly Changing Computer Software Industry.

of DOS were introduced during the 1980s. As the Graphical User Interface (GUI) gained traction over DOS's command-line interface, Microsoft launched Windows 3.1 and subsequently 3.11 for Workgroups to reinforce its leadership position. By adjusting to evolving market requirements, Microsoft consistently bolstered its prosperous presence.

Microsoft established collaborations with various companies and expanded into numerous areas including networking, utility software, common applications, and entertainment. Through the creation of DirectX Standards, the company enhanced the compatibility and diversity of software and hardware that could operate harmoniously within the Windows environment (4). This revolutionary operating system paved the way for numerous competitive markets in various sectors, while also elevating the opportunities for startup companies to succeed in the software industry.

Contrary to the label of a monopoly in the software industry, Microsoft's annual revenues only make up 1% of the industry. The company's reputation is primarily based on its unmatched operating systems, which currently power 80% of computers worldwide. Microsoft has achieved significant success by improving quality and reducing costs. It should be noted that having a substantial net worth is not uncommon for software and computer companies, as high profits are often associated with this business sector.

The reason behind such high revenues in the software industry is simple yet frequently overlooked. Regardless of the product, all industries incur costs related to raw materials, labor, manufacturing, advertising, and production. However, in contrast to other industries, the software industry requires minimal raw materials apart from storage media for programs themselves. With minimal errors and low labor costs involved in instant mass production through copying programs countless times simultaneously, enormous profits are generated in this sector.

Despite its monopoly, Microsoft supports competition

and innovation in the software industry by offering advantageous and affordable products to consumers without influencing their choices. Additionally, Microsoft does not exploit its market dominance to manipulate the internet. It is crucial to consider the consequences if Microsoft did not exist – what aspects would have changed and what would have remained unchanged? However, legal action taken by the Department of Justice against Microsoft hampers its support for competition and innovation in the software industry.

Microsoft acknowledges the importance of competition and innovation in the software industry and understands that its own success relies on creating an environment that supports these qualities. For other companies' products to be useful, they must be compatible with the Windows environment. Therefore, it is crucial for Windows to provide a favorable atmosphere that allows other companies to benefit from it; otherwise, they will seek alternatives.

In the U.S., there are around 2.2 million independent software vendors, and globally there are 5 million who design their products to work with Windows. A study conducted on 200 randomly selected companies showed that 91% of them recognized the positive impact of using Windows on their business operations.

Users choose Windows as their preferred operating system because of its reliable performance and well-designed interface, which enables businesses to efficiently complete tasks at a reasonable cost.

Obtaining a Microsoft Certification offers numerous benefits as it often holds more value than a four-year degree, with many job listings requiring this certification. The computer-based certification tests intentionally pose challenges by focusing on individuals' weak areas and featuring a majority of questions related to those topics.

Companies worldwide acknowledge the level of expertise required to successfully complete these exams and frequently

recognize and incentivize staff who obtain such certifications.Microsoft provides individuals with a chance to demonstrate their abilities and establish their value to potential employers during job searches. Additionally, Microsoft fosters healthy competition and encourages innovation by improving worldwide compatibility for software and hardware, while also setting industry standards for testing.

The software created by Microsoft is advantageous to the market. According to a DRI/McGraw Hill study, over the past decade, every dollar spent on Microsoft products has resulted in a minimum increase of four dollars in business profits (9). This indicates that investing in Microsoft yields a profit return of at least 400 percent. The positive impact of Microsoft's software has extended to various industries, leading to economic growth in multiple regions. Despite accusations against Microsoft, their products are not designed to cause crashes in other programs (10). On the contrary, Microsoft products are designed to be compatible with virtually any program and support an open architecture design, allowing all programs to operate at full capacity. Microsoft also launched a Java-based development program, taking advantage of the potential offered by the Java environment and introducing improvements aimed at enhancing its functionality. A study conducted by a private company revealed that Microsoft's Java development software surpassed the original manufacturer, Sun (11). Microsoft actively invests time and resources in contributing to the industry and enhancing the products of other companies.

Microsoft's monopoly allows them to provide products at a reduced cost to consumers. For instance, the Windows 98 upgrade is priced at $89, while IBM's OS/2 Warp costs $110 and Sun's Solaris is priced at $430 (12). Rather than increasing profits by raising prices, Microsoft opts for lowering costs

and offering high-quality products at minimal expense for consumers. Throughout the years, Microsoft has decreased the retail price of their software applications significantly: Microsoft Word by 25%, Excel by 32%, and Office by 50% (13). In comparison, the price of Windows is only a fraction - less than 5 percent - of what a true monopolist would charge (14). In the past, consumers used to spend much more money on software that had lesser capabilities compared to what Windows currently offers. To maintain their sales strategy and provide products at lower costs, Microsoft reduces profits and allocates more towards Research and Development in order to enhance existing features and introduce new ones – thus ensuring their reputation for exceptional products.

Microsoft has shown an unparalleled commitment to Research and Development (R;D) in order to stay competitive and at the forefront of innovation. Our R;D investment was $350 million in 1992, but it has grown significantly over time, reaching over $2 billion last year. We anticipate this number to increase even further to $2.6 billion next year...(15).

Even though a Windows 98 upgrade typically costs $89, the cost per day over three years is just 8 cents per day (16). If a consumer already has Windows on their PC, the cost is even lower. These prices are minimal considering the manufacturer's $2.0 billion dollar investment. It is advantageous for consumers that Microsoft, a monopoly, charges such reasonable prices instead of charging more. Microsoft is comparable to Ford in the thriving twenties automotive industry, prioritizing affordability for all. Similarly, Microsoft aims to make software accessible to everyone.

Despite Microsoft's dominance in the market, consumers are not compelled to make biased

decisions about their purchases. The information-technology industry is highly competitive and caters to well-informed customers who make knowledgeable choices regarding products(17). Customers are fully aware of the range of products available in the computer industry and can seek guidance from experienced salespeople or other computer-savvy individuals if they have any doubts. The reason people choose Microsoft products is because we listen to our customers and put extensive effort into making them the best on the market(18). As a widely recognized "software giant," Microsoft constantly adapts to customer wants and needs, with customer feedback playing a crucial role in its success. This allows Microsoft to continue offering unparalleled products at an affordable price for the average person. Despite holding a significant market share, consumers do not feel excessive pressure to purchase Microsoft products. They take time to evaluate their needs and determine which product best suits them, with most instances finding that Microsoft satisfies their requirements and more, at a price they find acceptable. If not, consumers will naturally opt for a superior alternative.

The claim that Microsoft utilizes its monopoly power to control or disable other internet providers is unfounded. It is unrealistic to believe that a single company can manipulate internet access, as the openness of the internet is an inherent aspect of its structure(19). The internet consists of numerous computers, potentially millions, all employing web browsers. It is improbable that one company can exercise control over this network of computers. A browser's success relies on its functionality and impact on consumers rather than its control over the internet. Should Microsoft Internet Explorer 4.0 fail in providing unrestricted access to the vast array of information

on the internet, it would swiftly be replaced by alternative software that meets consumers' demand for open access(20). An internet browser's capability depends entirely on the creator's understanding of how the internet operates. Like other sectors within the software industry, a product's success or failure stems from its ability to persuade consumers to purchase it. The available information on the internet is dispersed among countless computers worldwide, offering an essentially infinite number of entry points(21). If a browser fails to provide customers with this accessibility, it will inevitably be substituted. Additionally, if a browser enabling access lacks support from Windows, it too will be replaced. The future of computing lies in the adaptation of programs to suit the demands imposed by the internet.

The impact of Microsoft's existence is significant and difficult to determine, but the computing world would be drastically different if Microsoft had not been established. In 1975, Bill Gates founded Microsoft and created a program for the Altair 8800 - the first PC. However, it was not until 1981, when IBM released their first PC with Microsoft's DOS, that the company started making a notable impact.

Without Bill Gates propelling the software industry forward with his program for the Altair, our current state of computing would not exist. We would be technologically behind by at least five years and the flourishing software industry surrounding Microsoft would also cease to exist.

Microsoft acquired DOS for $50,000 and rebranded it as MS-DOS, which was a pivotal moment for the company leading to subsequent achievements and investments. In 1991, they introduced Windows 3.1 with their Graphical User Interface (GUI) operating systems.

Without Microsoft's support, Apple likely would have dominated

the market and PCs could have become nearly extinct. Additionally, through setting high standards for software quality, Microsoft has shaped consumer expectations within the industry.

Without them doing so, there would be a smaller market filled with lower quality software being sold at higher prices. Furthermore, Microsoft made efforts to establish a cohesive ecosystem in which all software and hardware could harmoniously operate.If these elements are not made compatible, there will be a lack of dependability and undue influence from companies with exclusive software and hardware. This will hinder the innovation of start-up companies and ultimately lead to an industry that is less appealing or user-oriented compared to its current state.

The Department of Justice's lawsuit against Microsoft impedes competition and innovation in the software industry, limiting their ability to design products freely and remain competitive. This restriction could negatively impact the entire software industry that relies on Windows. Without the freedom to enhance Windows, developers may be less motivated to create new products that fully utilize it, causing uncertainty for consumers. Around five million companies worldwide depend on Microsoft's products, particularly Windows, for their own offerings. Therefore, if Microsoft loses its market position and reputation as a leading competitor, the consequences would be significant.

"In summary, although I do agree that the government should take action to prevent collusion and other illegal activities that may hinder competition, I strongly believe that the government should be cautious when intervening in the computer software industry. This industry is functioning effectively on its own, as I have highlighted in my testimony today. It is a flourishing and dynamic sector of the U.S. economy that other countries admire (27)."

As mentioned earlier,

Microsoft plays a crucial role in the software industry. The ability for individuals and companies to innovate in the software world has been greatly facilitated. Microsoft further enhances this by providing an environment where these innovations can thrive. They foster a competitive market where companies strive to create high-quality products that are compatible with Windows and appeal to consumers. The significance of Windows cannot be overstated, as it serves as the foundation for numerous products. Despite criticism of Microsoft as a monopolistic entity that stifles competition and limits room for growth, the company aims to promote fair opportunities and establish standards for maintaining high quality. From a consumer perspective, the current state of affairs is exceptionally favorable. The intense competition in the computer industry has driven prices down significantly, offering top-notch products at affordable prices.

Microsoft's monopoly fosters both a competitive market and individual innovation.

MICROSOFT'S monopoly fosters competition in the market and nurtures individual innovation.

SAW

American Studies

Mr. Dingleballz

March 3, 1999

Works Cited

1. According to Wessels, Mr. Ted Chandler was interviewed in person.

2. In a personal interview with Mr. Ted Chandler, Wessels discussed various topics.

3. Delaney, http://exo.com/~wts/mits0013.html

The website "exo.com" has a page titled "mits0013.html" which can be found at the following link: http://exo.com/~wts/mits0013.html.

5. Microsoft, http://www.microsoft.com/

6. Microsoft

7. Microsoft, http://www.microsoft.com/

8. Microsoft, http://www.microsoft.com/mcp/

9. Microsoft, http://www.microsoft.com/

10. Microsoft, http://www.microsoft.com/

11. Microsoft, http://www.microsoft.com/

12. Microsoft, http://www.microsoft.com/

13. Microsoft, http://www.microsoft.com/

14. Microsoft

15. Maritz, http://www.microsoft.com/presspass/trial/default.html

16. Microsoft

17. Microsoft, http://www.microsoft.com/

18. Microsoft

19. Gates, http://www.microsoft.com/presspass/doj/3-2billtest.html

20. Gates, http://www.microsoft.com/presspass/doj/3-2billtest.html

21. Jackson, 24

22. Delaney, http://exo.com/~wts/mits0013.html

23. Wessels, "Personal Interview with Mr. Ted Chandler"

24. In a personal interview with Mr. Ted Chandler, Wessels discusses...

25. Gates, http://www.microsoft.com/presspass/doj/3-2billtest.html

26. Gates, http://www.microsoft.com/presspass/doj/3-2billtest.html

27. Gates,

http://www.microsoft.com/presspass/doj/3-2billtest.html

BIBLIOGRAPHY

Bournellis, Cynthia. "Software Platforms Lead to New Products." Electronic News.

Jan. 1998, 58

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The website http://www.microsoft.com/presspass/ is located at the provided link.

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The link provided is for the website of Microsoft presspass. Please visit http://www.microsoft.com/presspass/doj/3-2billtest.html for more information.

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You can access the Microsoft Certified Professional website at http://www.microsoft.com/mcp/.

The Microsoft trial reaches its peak with a significant focus on email, according to an article in NewsBytes on January 27, 1999.