There’s been an ongoing discussion on the Beowulf list for Linux clusters about SGI and Windows clusters (which I’ve not had a chance to read), but as part of it the inimitable Robert G. Brown (or one of his AI bots that he must use to keep up his prolific and ever useful posting rate) wrote a lengthy and very interesting piece about why he is, and others should, be afraid of Microsoft’s dominance. It is written in response to a posting from a Microsoft employee, which in itself is an interesting turn up.
He makes lots of references to “hydraulic monopolies”, so it is worth reading up on hydraulic empires for some background to the historical context.
One point he makes is about their impact on pension funds:
Finally, there is Microsoft and pension plans and the general stock market. This is perhaps the scariest part of Microsoft’s supermonopoly status, one that a gentleman named Bill Parrish seems to have devoted himself to uncovering and laying bare to an obviously uncaring world. Microsoft stock is a rather huge component of stock owned by both pension plans and individual “S&P Index” investors (and individuals) all over the world. If Microsoft stock were to collapse, or even to slip steadily down in nominal value, the economic consequences would be catastrophic. It would make the collapse of Enron look tame by comparison, because Microsoft is considerably larger at baseline than Enron ever was. This creates a HUGE disincentive for individuals and companies to challenge Microsoft’s hydraulic legacy — Microsoft has essentially tied the future well being and wealth of an entire generation of corporate employees and index fund investors to their own continued success.
Here he is using an essay by the afforementioned Bill Parish which was done as an editorial for Barrons (from the WSJ people) in 2003 and available online, where Mr Parish writes:
For anyone owning a S&P 500 index fund, Microsoft automatically was almost 4% of their investment. Microsoft’s stock has since declined 58.5%, from $58.38 a share on Dec. 31, 1999,(adjusted for a subsequent split) to $24.21 on March 31. That’s a loss of more than $363 billion, an amount exceeding the gross national product of all but a few nations. The loss also happens to be almost five times the total market value of Enron at its peak.
For reference, MSFT are currently trading at US$30.74 and a market capitalisation of US$302.19 billion. That’s about twice the GDP of Ireland and half the GDP of Australia.
Rob has kindly granted permission for its reproduction here, but he retains copyright.
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