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Creativity Out the Windows?

Though 'Free,' Microsoft's Ubiquitous Operating System May Exact a Price


SAN FRANCISCO — When Ross Perot talked about a "giant sucking sound," he was predicting the impact of the North American Free Trade Agreement on U.S. jobs. Little did he know that a much bigger suction effect was already in action: Microsoft Corp.'s operating systems.

Windows 98 brought the wrath of the Justice Department by fully integrating the Internet Explorer Web browser. But the acquisitive history of Microsoft operating systems suggests that the move was about as surprising as the company's 95% market share in PC operating systems this year, according to market research firm Dataquest in San Jose.

Browser, fax, CD player, painting, performance speed-up, file viewer, typefaces. . . . Since 1983, Microsoft has been steadily absorbing what were once stand-alone products into various forms of DOS, its original operating system, and its successor, Windows. The consequences for computer users, say analysts and industry executives, have been decidedly mixed.

From the obscure ("disk defragmentation" utility) to the addictive (solitaire) to the essential (tools that control a printer), Microsoft has bought, licensed, reinvented, copied--and at times has been accused of stealing--these and other applications over theyears. In the process, Windows has become a cornucopia of features and tricks at an incredible price--free with a new PC.

Yet many experts see Windows as a ponderous hodgepodge of mediocrity that absorbs software functions like a giant amoeba, retards competition and reduces consumer options.

Given this history, why did it take the integration of Internet Explorer with Windows to provoke the Justice Department?

In part because an integrated operating system saves consumers the headache and expense of patching together stand-alone products to obtain similar results.

And if Windows puts some software vendors out of business, it frees others from the chore of continually reinventing the wheel--for example, a word processor or calendar doesn't require a complex set of instructions to store a file or display a graphical image.

"These things are invisible to consumers, but to developers it's 'Hallelujah, you've made my life better,' " said Tod Nielsen, general manager for developer relations at Microsoft.

In theory, this should result in better software with fewer incompatibilities. Critics point out, however, that system or application crashes still occur with maddening regularity.

"It's hard to think of anything Microsoft has done really well," said Jeffrey Tarter, editor of the industry newsletter Soft-Letter. "Their defense historically is that they'll put a simplified version of a product in the operating system and that this will help [other software makers] market a more sophisticated version. So everybody wins."

The marketplace doesn't always respond according to plan, however. "There's no question that there's less product diversity and less innovation," Tarter said. But on the whole, he added, consumers seem willing to trade the benefits of competition for the convenience of getting everything in one package.

For large applications, competition usually benefits users, said software market analyst Chris LeTocq of Dataquest, pointing to Microsoft Money and Intuit's Quicken personal finance products. After Microsoft's attempt to acquire Intuit was frustrated by the courts, he said, "you ended up with two extremely aggressive products."

Utilities--the behind-the-scenes services that keep a computer running efficiently--often follow a different path.

For example, when uninstallers--small applications that erase obsolete software--were new, competition led to innovative approaches. But after developers solved the big challenges, Microsoft adopted its own adequately effective uninstaller in Windows. With such generic categories, consumers happily settle for efficient mediocrity.

Bargains Versus Consumer Choices

But have innovation and competition in the industry been stifled in the process?

"Microsoft has continually changed the operating system to the benefit of customers," said Gordon Eubanks, chief executive of Symantec Corp., one of the few PC utilities companies that have remained strong. "The complexity of the operating system drives our opportunity."

But other software executives wonder if an apparently self-evident bargain might ultimately limit consumer choice in unforeseen ways.

In a Windows-dominated world, says Douglas P. Colbeth, chief executive of Naperville, Ill.-based Spyglass Inc., consumers have benefited. "But is it good for overall innovation in the long term? The jury is still out. Some innovations don't take place quickly because of the concern that they will be incorporated into the operating system." Few executives risk investing in a vanishing market, Colbeth said.

In fairness, non-Microsoft operating systems follow a similar integration path, as do application programs. For example, independent spell checkers have virtually vanished as they've been absorbed into word processors.

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