Linked by Kroc on Thu 30th Aug 2007 13:03 UTC
Editorial I hear often that when something new appears that "competition is good". The primary reasons competition is seen as good, are: it drives down prices; it gives consumers more choice; it pushes technology forward, quicker. Competition is not good because: competition is why consumers have to choose between HD-DVD and BluRay; competition is why DRM exists; and more. In this article, each of the supposed benefits of competition will be looked at in more detail.
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Competition also prevents interoperability. This alone adds massively to the overall lag of the industry. Here's a 'what if' to demonstrate:

Competition by itself does not prevent interoperobility. Open formats allow for perfect interoperobility. The problem is DRM and closed formats not competition.

Choosing between HD-DVD and BluRay is not a matter of taste. They both do the same thing, they provide you with a choice you don't need to make. You wish to watch a movie, since both provide the same thing with no variance in features (the movie content is the same on both), the consumer is therefore having to choose between two of the same flavours, except these are expensive flavours, and one might not be around as long as the other, and it'll cost you more money to switch sides in the future.

Yes this kind of sucks for consumers but only for early adopters which is a tiny percentage of consumers. The rest of us will wait until one format wins over the other. The advantage to this kind of competition though is that we can choose the better format if we are an early adopter and steer the market towards the better solution. That is what competition is all about.

Technology would still move forward even without competition. People like Sir Tim Berners-Lee would still push forward software & technology. Linux would still exist exactly as it is now. What's more, without competition favouring half-baked standards and short-sighted designs, the difference industry-wide would be astronomical.

How you figure? Do you remember IE6? It wasn't that long ago. It had basically no competition for years and didn't improve one bit because of that. Firefox and others forced MS to make IE7 more standards compliant and to add features that were missing. There is no doubt in my mind that there would still be some people improving existing solutions without competition but competition is what drives the incredible pace that we see with hardware and software today.

Imagine an Amiga after 25 years of constant leading progress- a multimedia system right down to the hardware level. The IBM design we know now as standard (BIOS/BUS-IRQ) was a very poor decision for multimedia work. If it were Amiga instead of Microsoft, we could have been looking at computing hardware with 100x the graphical capability of existing technology. But that's just hypothetical really. The point is that competition has not picked the best of each generation, it's not picked the best interoperability nor given new competition equal footing when it's turned up.

That's easy to say now but without competition Amiga, or any other company for that matter, wouldn't be spending tons of money on R&D if they didn't have to to remain the leader in the market. In fact publicly owned companies could possibley get in trouble for wasting money unecessarily if they just threw huge sums of money at improving a product that didn't need improving to retain its marketshare.

Competition ultimately ends with stagnation and vendor lock in. The amount that stagnation and lock-in has set back computing progress cannot begin to be calculated. One clear example is the period 2001-2004 where IE6 held a near 100% monopoly on the browser market. During that period no major revision of IE occurred (other than a popup blocker in SP2), Viruses, spyware and other malware exploded on the web. Even though tabbed browsing had been around for years, Microsoft had no need to add it, there was no competition. Microsoft had no monetary reason to benefit users any more.

You just invalidated your own point. You're right that Microsoft didn't improve IE6 as I also said earlier. The reason it was improved was because of competition.

In order to beat someone, sometimes you have to cheat and sometimes you have to prevent the consumer from using any of the competitors

I think you have been using Microsoft products for too long. You don't have to cheat if you make a good product. Linux has been proving this all for a while now. Linux has gained tremendously in the server market since its inception and now is starting to slowly take over desktops around the world. If there was no competition we would still be using a crappy windowing system on top of DOS.

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