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MS-Sun Competition: Prices Drop, Consumers Gain
Sun Microsystems has introduced its first Unix workstation priced less than $1000 to compete against Microsoft's Windows-based PCs, which have cut into the market for the powerful business computers once dominated by Sun. The announcement followed an earlier one in which Sun announced a low-end server also selling for under $1,000.
Why the precipitous drop in prices? Competition, according to Sun's Fred Kohout: "We're taking on the PC market on its home turf with price and performance," said Kohout, a director of marketing at Sun, (San Francisco Chronicle, Feb. 28, 2001).
That's a refreshing change from Sun's earlier strategy of turning to the government "to come in and discipline Microsoft until the rest of the world catches up," as CEO Scott McNealy said last year following the district court's negative ruling in the government's antitrust case against Microsoft (Washington Times, April 4, 2000). The suit was filed after McNealy led the $3 million Project Sherman effort that brought together legal and industry experts to devise a set of charges the Department of Justice could bring against Microsoft.
Consumers were the losers in that battle. As the emergence of Sun's lower-priced products has already demonstrated, consumers will win when the competition stays out of the courts and in the marketplace.
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Public Voices on US v Microsoft
On February 26 and 27, the U.S. Court of Appeals for the D.C. Circuit heard oral arguments in the appeal of the antitrust suit United States v. Microsoft. Many public officials have spoken out in response to the proceedings. Here are some of their comments:
Majority Leader Dick Armey (R-TX): "No one, not even a judge or billionaire executive can foresee exactly what the future of this industry will look like. That's because creative minds all across America are hard at work dreaming up new innovations and conveniences for consumers. The marketplace should determine which of those great ideas succeeds, not government and the courts. I hope the Appeals Court recognizes, as I do, that further court proceedings will simply shift minds and money from innovation to litigation."
Congresswoman Jennifer Dunn (R-WA): "Last year's ruling against Microsoft sparked the dot-com sector cooling we're still experiencing today. That decision was harmful to consumers, not Microsoft's efforts to make computers accessible and affordable. It is time the Court of Appeals threw the government's case out. Then we could all get back to work."
Congressman Jay Inslee (D-WA): "This industry is one of the most creative industries perhaps in the history of the world, and I believe that the federal government stepping in to try to regulate this industry and make decisions for the industry is simply wrong."
Senator Bob Smith (R-NH): "The high-tech industry blossomed in the United States because of a regulatory-free environment that minimized red tape and overhead costs. My sincere hope is that this controversy will be resolved in a manner that protects competition, innovation, and free enterprise, without excessive government regulation."
U.S. Sen. Robert Torricelli (D-NJ): "America's high tech industries are responsible for the creation of thousands of new jobs, historic economic expansion and increased productivity. We must encourage these innovative entities, not impede their progress."
U.S. Rep. Edolphus Towns (D-NY): "The original ruling was unfounded and inherently unfair because the U.S. software industry is vibrant, healthy and fundamentally competitive, and has helped create $20 billion in trade surpluses for our economy last year alone. I believe that the Court of Appeals will understand that Microsoft has helped, not harmed consumers."
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Get Involved
Silicon Summit 2 Online
MSNBC will webcast NBC's Silicon Summit 2 live from New York City on Sunday, March 11th at 8:00 PM (EST).
Tom Brokaw will moderate a panel discussion that asks, "What's next for the tech industry?" Panel members include Jerry Yang, co-founder of Yahoo!; Bob Pittman, chief operating officer for AOL-Time Warner; Jeff Bezos, founder of Amazon.com; Geraldine Laybourne, CEO of Oxygen Media; Howard Stringer, CEO of Sony America; Ted Waitt, CEO, Gateway Inc.; Darrien Dash, Founder and CEO of DME Interactive; and new Federal Communications Commission Chairman Michael Powell.
To learn more about the event, go to http://www.msnbc.com/news/SILICONSUMMIT_front.asp
Debate: Competition in Cyberspace
Tickets are available for a March 12 debate between Richard M. Salsman (Center for the Moral Defense of Capitalism, and The Ayn Rand Institute), and James Love (Center for the Study of Responsive Law) on "The Gates of Competition: Anti-Trust Laws in Cyberspace," sponsored by National Public Radio and the University of Pennsylvania's Annenburg Public Policy Center.
Salsman and Love will square off over these questions: "No one questions Microsoft's dominance in the computer industry, but should Bill Gates and company be revered or reviled? Microsoft's Windows operating system is the industry standard and Microsoft's Internet Explorer is built into every system making it an instant, if compulsory, success. Is Microsoft simply an aggressive and savvy business or have they used their size and influence to stifle competition and violate anti-trust laws?"
The debate will be audiotaped and broadcast nationwide, at a later date on NPR (watch the FIN for details). For more information, call (215) 573-8828 or email tickets@asc.upenn.edu.
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Make Your Voice Heard
Let public officials know how you feel about issues affecting Microsoft and the high-tech industry on the Freedom to Innovate Network website. To contact them, or just to stay up to date on the antitrust trial and other issues, keep visiting us here at the FIN Website
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