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Author Egan, Edmund A.
Source CiteSeerX
Content type Text
Publisher Princeton University Press
File Format PDF
Language English
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Theoretical Concept ♦ Anti-trust Scrutiny ♦ Seattle Software Industry ♦ Lock-in Effect ♦ On-line Service ♦ Total Employment ♦ Microsoft Corporation ♦ Small Share ♦ Electronic Commerce ♦ Electronic Network ♦ Edu Eis ♦ Traditional Area ♦ Network Externality ♦ Berkeley Roundtable ♦ Seattle Factor ♦ Working Paper ♦ International Economy ♦ Long-term Strategy ♦ Monopolistic Position ♦ Unnamed Complainant ♦ Planned Acquisition ♦ Software Industry ♦ Technological Innovation ♦ Silicon Valley Law Firm ♦ Detailed Review ♦ White Paper ♦ Growth V ♦ Upon Ready Access ♦ Rapid Innovation ♦ U Software Industry ♦ Experienced Worker
Description Microsoft Corporation, the largest company in the US software industry, has been under anti-trust scrutiny from the Department of Justice for most of the 1990s. In 1995, its planned acquisition of Intuit, Inc. prompted a Silicon Valley law firm, on behalf of unnamed complainants, to submit a White Paper to the DOJ, on the subject of Microsoft's long-term strategy. The White Paper, relying on the theoretical concepts of network externalities and lock-in effects, argues that Microsoft will use Intuit's products to attain monopolistic positions in network operating systems, on-line services, and electronic commerce, and will eventually be in a position to affect the content transmitted over electronic networks. This paper disputes that claim. First, an analysis of Microsoft's growth vs. the US packaged software industry a whole is presented, indicating that Microsoft actually has a fairly small share of total employment and sales. Secondly, a detailed review of the White Paper's argument is followed by a discussion of Microsoft's competitors, whose products also benefit from network externalities and lock-in effects. Ultimately, innovation will be more important than leverage for Microsoft. However, the paper argues that Microsoft's location in Seattle may prove to be a liability when it comes to rapid innovation; the corporation has grown much more rapidly than the Seattle software industry as a whole. Consequently, it cannot rely upon ready access to experienced workers in fields outside its traditional areas of specialization.
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Learning Resource Type Article
Publisher Date 1996-01-01
Publisher Institution Economy, University of California, Berkeley