Re: Microsoft's Zone

["Michael R. Ward" <ward1@ux6.cso.uiuc.edu>]

          If the engine in my Ford blows out, no matter how much I plead, the
  dealer will not replace it with a Chevy engine.  When the compressor on my
  Hiel AC unit went out, I could not get a Trane compressor installed without
  the rest of the Trane unit.  Foreclosure?  Perhaps these firms have
  optimized their engines and compressors to work with their other components.
  They take advantage of the unique strengths of one firm's system or another.
  Doing so makes the product more valuable to users of that system, but
  worthless to users of a different system.  Moreover, these markets also
  operate in a "networked environment" (of customers, dealers, repairers,
  parts suppliers) where issues about "bundling, interoperability and
  compatibility" occur, but are they "opportunities to get and defend market
  shares"?
  
          Universal standards are efficient in the productive sense, but
  perhaps not in the al locative sense.  Competition often leads firms to try
  to differentiate their products to appeal to heterogeneous consumers.
  Differentiation means that firms will place higher values on those pieces of
  the standard that make their product more attractive.  Partner firms have
  incentives to build on the strengths incumbent in this differentiation.
  Sometimes developing a new product means extending a standard, developing a
  new standard or abandoning an old standard.  Imagine imposing universal
  interoperability standards on the various components of cars and ACs.
  Makers of, say spark plugs, would have to make sure they work with all other
  possible components rather than optimize them for a specific component, say
  a carburetor.  We would likely end up with much less variety in completed
  units.  So, competitive, which tends to allocate goods efficiently, may
  require, or lead to, standards that are not universal, and, perhaps, a
  sacrifice in productive efficiency.
  
  Mike
  
  BTW, while my dept.'s ACELink course materials require Netscape, our
  business office Intranet requires MSIE4.0.  Either running the two is not
  difficult or we suffer from similar problems as many bureaucracies (a
  distinct possibility).
  
  At 05:31 PM 10/25/1997 -0400, Jaime Love wrote:
  >DeBrock, Larry wrote:
  >> You are correct that this issue of open standards is a concern, just as
  >> Mr Schultz and I suggested.  However, my point is that this listserv
  >> seems to have already acted as prosecutor, judge, jury and executioner
  >> against Microsoft.  As one example, just after my post, you yourself
  >> posted another message titled "Another example of EI4.0 only Web site".
  >> Before the flames start, I am NOT trying to defend MS.  I just want to
  >> point out that not all problems are "MSIE ONLY" sites.
  >
  >
  >   I agree with you that this isn't only a MS problem, and more
  >generally, that it is likely to be a rather common problem in a
  >networked environment where issues about bundling, interoperability and
  >compatibility become opportunities to get and defend market shares.
  >
  >   I am quite pleased about the current DOJ effort, but it does seem
  >fairly narrow at this time, and who knows if DOJ or other competition
  >officials have either a strategy or the legal tools to address some
  >obvious problems.  We are spending some time looking at government
  >procurement as a different way to put pressure on firms to support open
  >standards, and also to keep competitive alive in key sectors of the
  >computer and software industry.  (As was done in the IBM case some time
  >ago).  
  >
  >   Jamie
  >
  >
  ----------------------------------------------------------------
  Michael R. Ward                                   (217) 244-5667
  Dept. of Ag. and Consumer Econ.                   ward1@uiuc.edu
  University of Illinois          http://www.uiuc.edu/ph/www/ward1