Every tech market loves a monopoly
Facebook. Google. Apple. Hurrah!
Open...and Shut It may not be that "Every woman adores a Fascist," as the poet Sylvia Plath once caustically penned, but it certainly seems that every market appreciates a monopolist.
However much we may wring our hands over Facebook's dominance of social networking, Google's heavy hand on search, and Apple's grip on mobile market, the reality is that a certain level of monopoly is a very good thing for the development of a market.
Why? Because it gives developers a place to focus their efforts, and a (mostly) benevolent network effect for consumers.
Remember when you were getting invitations from Spoke, Plaxo, and every other wannabe foundation for consumers' social graphs? Thank goodness Facebook came along and rendered them all effectively useless. We may not want Facebook to hoard our data, but the alternative is worse.
Love it or leave it - the natural order?
Facebook isn't useful because it has a fantastic UI (it doesn't) and it's super-intuitive (tried changing your privacy settings lately?). It's useful because it's where everybody else is. Period. With more than 500 million users, Facebook is the social network, ground zero for my - and probably your - social graph, a fact underscored by its dominance in photo sharing compared to competitors like Flickr. This makes it convenient for users, but it also makes it profitable for developers.
And it's why I just can't see fledgling anti-Facebook attempts like Diaspora making any kind of credible impact on Facebook's momentum.
Or take online advertising. It was somewhat aimless until Google came to dominate online search and advertising. With a myriad of ad networks, the online advertising market struggled to mature. With one big Google pot into which advertisers can throw their money, however, it has blossomed.
The same is true for Microsoft with Windows and Office. No matter what you think of the company's history of legally dubious business practices, which rightly landed Microsoft in hot water with the US Justice Department and the European Commission, Microsoft did more to enable the PC revolution than any other company. With its chip partner Intel, Microsoft offered the industry a common target for development: Windows running x86 chips.
One can argue that Microsoft buried all sorts of innovation by effectively stifling technically superior competition, but this overlooks the critical importance a common platform provided for unlocking third-party developers' innovations. If you don't believe me, just look at the mobile software market, which has been fractured for years and is only now starting to mature thanks to Apple's iPhone.
We're now seeing that mobile market further mature, with Google's Android playing the role that Windows did in the PC revolution. Android looks to be the glue that competitive industry forces can rally around. It doesn't need to be perfect. It just needs superior volume and a relatively open nature.
Done and done.
This is what hegemonic power gives an industry: a place for developers and users to congregate. Smaller companies can seek to get big by marketing their APIs, but once a competitor has critical mass, industries (rightly) tend to shed the also-rans because dragging them along is inefficient.
Nor does this stop innovation. Not for long, anyway. Microsoft couldn't hold back the internet, no matter how hard it tried. Despite the tenacity of its grip on the desktop market, open-source software and cloud computing emerged, both of which have offered new ways of doing old things, and new ways of doing new things that Microsoft Windows and Office couldn't deliver.
New entrants don't win by out-cloning the old world but rather by shifting to a new world with new rules, an idea made popular by Clayton Christensen's The Innovator's Dilemma. These "new rules" favor bottom-up innovation and decision-making, something that open source and cloud computing both enable. Microsoft chief executive Steve Ballmer could sing about developers, in other words, but open source, in particular, sang to them, as Redmonk analyst Stephen O'Grady writes.
Politicians and judges may worry about concentrations of power in technology markets, but I don't. Not much, anyway. History shows time and again that a certain amount of monopoly is good for the development of a market, and that entrepreneurs and open-source developers cleverly adapt and overcome entrenched monopolies through technological innovation.
It's the natural order of technology. Get used to it. ®
Matt Asay is chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfreso's general manager for the Americas and vice president of business development, and he helped put Novell on its open-source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears every Friday on The Register.
It's not about monopolies
It's about the market place and liquidity.
The most liquid markets are those that are standardised, open for most participants and don't have high cost of entry/maintaining position. If you have that, the market will tolerate a certain amount of abuse/manipulation as long as it is not too much.
However, that tolerance does not mean that the market may not become even more liquid if you take active measures to reduce manipulation further. That's why the most liquid market places are regulated exchanges.
When you look at say MS Windoze - it is accepted as a "market place" because most PCs in the world use Windoze, anyone can write a piece of software to run on it and the information on system's functions is mostly accessible to everyone. This outweighs the multiple faults of the Windoze itself and the attempts at abuse and manipulation by MS (IE, MSMPlayer, MS Office etc.)
So, MS is a known market manipulator which is temporarily tolerated by the market it runs. Everybody knows it would steal a bit here and there where it can but it won't let some other guy to chop down your market stall and beat you with a stick, so to say.
However, this model is still stinks (just like lots of quasi-exchange markets in the world do) and it can be easily improved by introducing regulated competition.
For example, ff some standards body were to publish a set of APIs that are mandatory for an operating system this would immediately bring competition into the OS arena and MS's "monopoly" will disappear very quickly. Same with the other stuff you mention...
You're hurting my brain
You're making a bold statement just so we'll read your article, right? You don't actually believe it do you?
The reason that monopolies are bad is that once they start doing things you don't like, you can't get your service from somewhere else.
It's like praising a dictator for making a country better, it's all well and good until he starts executing people who disagree with him.
Author confuses Monopoly with Standards. Standards=Good, Monopolies=Bad
Yes a common platform is good. You make some spurious arguments here that it is monopolies supplying this benefit, yet I fail to see how this benefit is any different from or better than standards and open interfaces that allow for common development as well, without one king holding the reigns and gaining all the benefits.
I would argue that there is good evidence to show that Open standards such as BSD (which by the way Apple OS runs on) and the IETF (remember those guys who actually made it so everyone COULD use the internet?!?!?.) work much better, and have show far more REAL development than Apple Google and MS combined.
I think the only benefit you state could have been gained if governments and people had been more informed, without the evil of creating entrenched empires that we are all beholden to.
Yes a common platform allows for more developer growth, yet I think Apple store, and MS dominance on the desktop have show exactly how these monopolies only purport to offer this, when in reality they are building a monopoly with which to keep and gain more power. Once they can do it themselves they have no need for the guys who used to write apps for them.
Software developers should take to note the new provision (in the ever changeable rules from Apple) that clearly states they will deny apps that there is already an similar app available. In other words "APPLE WILL NOT ALLOW YOU TO COMPETE FAIRLY IF YOU ARE COMPETING WITH OUR APPS". Why any company would spend the time to build an empire for another with no guarantee of results is beyond me.
We would not have the number of websites available by ANY stretch of the imagination if instead of Apache (that 70-90% of the web servers run) we had to purchase IIS and MS Server 200x for every site. Imagine if instead of the IETF's FTP, HTTP, DNS, DHCP etc, we had to pay a license fee for every product that used it.
I've said it a million times already:
THE US NEEDS TO ENFORCE FTC AND SEC RULES AND STOP LETTING COMPANIES BUY THEIR COMPETITORS, WHEN IT DOES NOT SHOW AN OVERWHELMING BENEFIT TO BOTH THE CONSUMER AND COMPETITION. They have been rubber stamping these purchases for years and years and if they reviewed this stipulation that is supposed to be enforced, we would not have this problem.
Google should not have been allowed to but DoubleClick, Inktomi and the other major information collection competitors.
MS should not have been able to buy 3 of the top 5 game developers to force X-box content only on their device. Buying a company that produces a product for multiple platforms and then forcing it on only one, is in itself an ANTI-COMPETITIVE action that should have been met with severe penalties, instead Halo becomes an XBox only game, and MS gets to build on their monopoly.
Intel, Apple, Cisco, etc all the companies that continually look like monopolies are usually also the most active at buying up their competition, and buying companies in whole in order to enter new markets and expand their monopoly offerings.