The Stalwart submits: The attacks on Microsoft (NSDQ:MSFT) by EU anti-trust chief Neelie Kroes are just getting more and more ridiculous. Of course before we already had the issue whereby MSFT wasn't allowed to include its Media Player installed in European versions of Windows 2004. But now with the new Windows Vista, Ms. Kroes is arguing that Ol' Softy can't include its XPS format viewing capability (similar to PDF format for files), and most shockingly of all can't provide Vista's increased level of security.
The argument is that by including all of these features, for free, that MSFT destroys the franchises of other companies such as Adobe for PDF's (NSDQ:ADBE), Real Networks for media playback capability (NSDQ:RNWK), and Symantec for security software (NSDQ:SYMC).
But lets stop for a moment. With Adobe, does turning a word file into a picture have any value these days?. Ok, ten years ago it might have been an amazing software feature, but today, is it that fantastic? Is it value-added? Or has its value dropped to almost nothing since anyone can just make a picture format and do it? Adobe is just lucky people use their format by habit; they add no value with this feature any more. Thus in an efficient economy they shouldn't earn any profits from this either.
Adobe Systems Inc. of San Jose, Calif., has told regulators that Microsoft should be prohibited from building free competing software for reading and creating electronic documents into the operating system, called Vista, according to people familiar with the situation. ...
...Adobe is objecting to Microsoft's inclusion in Vista of its own software for creating and viewing digital snapshots of documents, known as XML Paper Specification, or XPS. XPS competes with Adobe's widely used portable document format, or PDF.
While Adobe earns money by selling its Acrobat software to create PDF documents (while giving away the software to read such documents), Microsoft will include both reading and writing software as part of Vista for no extra charge. That could erode Adobe's sales. -from WSJ
Look, turning word files into pictures shouldn't really cost that much extra these days, nor should the revenue from this service be all that much. It should just be taken for granted, any company can write the software. It's like if I had a company that was the first to make text bold, which maybe in the 1970's was a major programming feat. (Wow! I can do it to ANY font!) But then now in the 21st century I decide to attack Microsoft for making text bold in its new Word program. They are giving away my franchise for free? Yes because the minimal cost to do so represents the economic value my business adds- zero. Thus I don't deserve profits from it.
Really, should users have to download a separate program and even make a payment for turning word documents into pictures? No, not these days, its a simple feature, like making any font bold. Thus there shouldn't be much profit from such a service and if Adobe currently has so much to lose from Microsoft's XPS format, then it's for the better. Their revenue for PDF'ing files is an economic inefficiency. Their service is no longer worth squat thus shed no tears if their PDF based revenue dies. Why is the EU trying to protect Adobe's PDF monopoly?
We can make similar arguments for Real Networks' Real Player media playing software. Yes its amazing how it can play mp3's AND dvd's. Oh wait... there are tons of free software programs written by amateurs online which can perform all of Real Player's key features (playing songs, watching videos). Thus this service too is no longer worth squat either.
Instead of trying to get governments to support their now value-less software, Real Networks should be spending more time figuring out how they can once again create a product which adds value. You can't just sit on your old idea forever. Again, if MSFT can just plunk in a Media Player for free, at a minimal cost, then your service is worthless. You need to do something they can't do so easily (and which amateurs can't do easily online as well). Create a product which makes it more appealing for MSFT to buy your company out, rather than just spend a little R&D on a similar software application and drop it into Windows. If you can't pass this test, then you don't add value.
We can write a longer post applying the above argument vis a vis the EU's most absurd desire to downgrade Vista's upgraded security, I mean wasn't security the big complaint against Windows? But we are tight on time at the moment...
In conclusion, if your product has great value, it should be very tough for MSFT to just do a little R&D and plunk similar software into Windows for almost free. Look, Google Search is still killing MSFT. MySpace is way ahead of MSFT as well. The greatest threats to Microsoft these days have come from companies with completely new ideas, acting through innovation instead of lobbying for government-enforced shackles around their competition. The EU attacks on Vista are pathetic.