04.29.08

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Intellectual Duopolists, Intellectual Oligopolies and Intellectual Mono

Posted in Antitrust, Bill Gates, GNU/Linux, Microsoft, Novell at 12:34 am by Dr. Roy Schestowitz

Microvell

What’s increasingly found these days is diplomacy that leads to reformation of old-age Trust, where companies like Novell are invited to join the Microsoft ecosystem provided that they share the same pool of software patents. It makes these two an “Intellectual Duopoly”.

An interesting set of a well-crafted explanations were recently recommended to us. These speak about what’s known as “Intellectual Monopoly”, which is wrongly (and deliberately) called all sorts of other things to add a positive connotation. In the index you will find a succinct description of the fallacies and their negative impact.

It is common to argue that intellectual property in the form of copyright and patent is necessary for the innovation and creation of ideas and inventions such as machines, drugs, computer software, books, music, literature and movies. In fact intellectual property is not like ordinary property at all, but constitutes a government grant of a costly and dangerous private monopoly over ideas. We show through theory and example that intellectual monopoly is not neccesary for innovation and as a practical matter is damaging to growth, prosperity and liberty.

A perfect example of this, which also fits the theme of this Web site, is Microsoft. As the following old essay states, Microsoft is resistant to change because of existing dominance; therefore it’s reluctant to disrupt its own market with improved and more cost-effective solutions. A decade later, the same arguments remain very valid.

Despite its reputation among some consumers as an innovative company, Microsoft’s number one goal is actually the opposite of innovation. Microsoft, like any other monopolist, can only succeed by preventing innovation. Here is a short summary of how they do it.

[...]

The control of the demand for a product involves controlling perceptions, which usually involves controlling advertising. If you build the world’s best mousetrap, people will come to your door — if they can find it! So the monopolist’s duty in a high-tech industry will generally involve disinformation campaigns disguised as brilliant marketing.

This is where Microsoft’s favorite marketing practices come in, such as preannouncing products long in advance, overstating their capabilities, and occasionally even announcing products they have no intention of shipping. However, these lies are only the beginning; Microsoft also uses an even dirtier trick of raising the entry cost for small companies into the marketing arena.

With Novell’s helping hand, Microsoft is permitted to elevate the price of GNU/Linux, assuming you obtain it from the wrong places. Additionally, it wasn’t more than a fortnight ago that a Windows 7 vapourware routine got pulled to “freeze the market” [1, 2] (Microsoft’s own words). This harms the customer, which becomes misinformed and develops high expectations.

Overall, the main message to take from this is that whenever Microsoft boasts “innovation”, it is worth noticing that it abstains from affecting its existing revenue sources. It won’t, for example, permit Web-based applications to de-elevate the role of the operating system unless there is no other choice (Google, Salesforce and smaller players take the lead and take matters into their own hands, for example). Ever since the mid-nineties, when Bill Gates discovered the potential of Web-based applications in Netscape, Microsoft has viciously tried to squash this disruptive trend. It has been successful, until recently, but it continues to exclude rival operating systems in the process.

“COM/OLE programming in C++ was declared a success in order to block language invocation.”

Bill Gates

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3 Comments

  1. masteroblaster said,

    April 29, 2008 at 7:22 am

    Gravatar

    It’s amazing how much mass you can squeeze out of a non-existing content when your just quote your own ‘articles’ (read: total bull) again and again and again…

  2. Roy Schestowitz said,

    April 29, 2008 at 7:28 am

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    Nobody forces you to read any of this. Have you decided to ‘hang around’ only to troll this site?

  3. Open Honesty said,

    April 29, 2008 at 10:51 am

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    I posted this before and I will post it again. If you are a developer on SUSE and buy in to Novell invitation for ISV’s you better call Astrum and ask them how they feel about Novell promise of protection.

    The one thing we all have to remember is that open source leads to new concepts and market opportunity for small development shops. Just ask Astrum Inc. http://www.astruminc.com, what astrum did was to develop the first SUSE based Solution Stack using Novell technology. What they produced and what the independent testing reported was a beast of an appliance and Astrum published these reports on its website.
    This solution described at RSA is the first true Identity based encryption system that can target users who have access to critical data or compliant sensitive data and harden compliance based policies that are compliance mandated. Astrum then did a OEM with nCipher and converted the nCIpher HSM from a 32bit card to a true 64bit card with eDirectory integration. Now if that wasn’t enough they then developed a key management system that never exposes any part of the key to a hacker outside the appliance and without making a customer change it’s network or put agents on it’s storage. I was very impressed as I spoke to representative from Astrum. Now according to nCipher as told to me at RSA this makes the Astrum solution the only solution to meet the up coming FIPS 3 compliance changes and make this appliance very unique in the market space.
    The problem:
    The concept from what I could gather was presented to Novell under NDA two years ago at the end of 2006 and promises of concept protection were made and agreements were signed and both worked with business units to ensure no competitive issues may arise. They did not! So Astrum shared with Novell executives the plan that at the end of the day for example map 8 of the PCI requirements to the appliance along with all the major compliances while having the ability to leverage all the security solutions sold by Novell or any other security software based solution that could sit in the network. What happened is Astrum became the first ever to develop and Novell based solution stack using SUSE enterprise server in a appliance only to have it stolen from them!.. Hence the following links.
    http://sev.prnewswire.com/computer-electronics/20080416/AQW05816042008-1.html
    http://www.novell.com/linux2/appliance/
    So if the solution is potentially a market changing concept as Linux can be why expose a concept to a company like Novell who touts protection in the Open source community, of course they promise protection from Microsoft but who promises concept protection from Novell. When Novell realized the market impact of such a solution they have moved to slowly create competition for little Astrum who is coming to market with out any assistance as promised by Novell. This solution from what I hear from internal Novell had enough potential market impact that it changed a direction for a major software company like it did for Novell. Prior to 07 and from what I understand Novell couldn’t spell compliance much less understands an appliance stack approach to compliancy and encryption.
    Develop for Novell on SUSE or jeOS, and expose a development and market plan, NO WAY!!! I really feel for these guys and have to ask why anyone would trust Novell and are they truly moving to a channel model.

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