Monopoly

It is well known that to make a lot of money in IT it helps to have a monopoly:

• M$ - desktop OS billions per year
• Oracle - enterprise database
• IBM - mainframe (historically)
• Adobe, M$, AutoDesk, Intuit - various "must-have" applications

Software is the bucket of gold at the end of the rainbow because of the low cost of production and the many millions of units that can be sold.In a recent quarter M$'s client division had revenue of $5 billion but kept $3.5 billion of that. Other divisions had higher revenue but because they actually had to work to earn it kept very little. M$ does not even have to copy their software largely. OEMs do it for them for free. That almost every OEM on the planet sells M$'s OS on PCs creates the monopoly. There is choice in the market but few consumers know where to find it and M$'s product is in their face everywhere.

The result is that consumers and businesses are paying far too much of IT. Those who do find and implement free software like GNU/Linux pay about half what it costs to do IT with M$'s product. M$ maintains the monopoly by paying off OEMs, retailers and suppliers in the food-chain of IT to push M$'s product. The only thing that can restore sanity to the market for IT is to use GNU/Linux more widely so that M$ has to compete on price and quality. They have improved quality a lot but have also raised prices when prices almost everywhere in IT are dropping. In netbooks we see machines selling for less than $300 because there is no $100 licence fee for M$'s OS. In other classes of PC, people are paying $150 or more for M$'s OS with the purchase of each PC without knowing the price. That is not a market place for operating systems. It is a monopoly. Only by insisting on using GNU/Linux can this be changed. Regulators have reigned in the most egregious anti-competitive practices of M$ only to have M$ find new and more creative means of imposing M$'s rules. If it takes ten years for regulators to catch up with M$, that is tens of billions more taken from the IT budget of the world with little to show for it but malware.

Only a concerted effort by consumers and businesses to use alternative OS and applications will break these monopolies. Businesses could easily do it. For example, Sun Microsystems looked at the cost of "upgrading" to the next version of Office for 20000 employees and decided it would be less expensive to buy the company producing StarOffice instead. The result has been OpenOffice.org which is an adequate office suite for most individuals and businesses. If every large business adopted one competitive technology like that and shared with everyone else, monopoly in IT would be broken immediately. We would have suppliers competing on price and quality and getting better IT. Governments and large businesses need IT but they do not need monopoly and can replace the current system of monopolies with a free market place. It will happen but it is taking time. Munich, France, Largo, Extremadura all escaped monopoly by making the decision and doing the work. The effort costs less than paying monopolistic prices for IT.