Browser competition, market decisions and open standards

I just read a blog entry at zdnet. The writer, John Carroll, essentially asserts that the free market has chosen that monopoly in the case of the web browser IS what’s best for it. There are a few things that I think he fails to take into account in his perspective on browsers and competition.

For starters I think there is a fallacy in looking at a snapshot in time and deciding that “the market has decided.” He posits that in light of Microsoft’s browser monopoly, the market concept of analyzing competition is either flawed in that markets must need outside help in maintaining fairness or, the market is correct and has chosen wisely. His theory is that the market has chosen stability and consistency (Internet Explorer) over the rapid progression of new features that marked the competition between Internet Explorer and Netscape.

Typically, I would say that free markets react fairly quickly to change and to competition. For starters I rewound my thinking back to the fierce competition between Netscape and Microsoft. MS had the large installed base of Windows users and came up with the crazy idea of giving the browser away for free. They could, after all, afford to lose money on the browser as they made money in their dominant desktop market share. This was something that Netscape really couldn’t compete with at the time. They were a company who primarily made a browser for sale. That was their primary source of revenue. Now, as Windows came bundled with Internet Explorer and the home user sat down to use the internet would they shell out $20 and install something else, or would they use a free already installed replacement. Most used the free preinstalled replacement. Features shmeatures, it takes something more noticable to seperate a user from their $. Of course eventually Netscape was free as well, but by that point the battle was lost. Additionally, it was free but required either a download (lengthy) or requesting a cd.

There is a lot of power in preinstallation, that has been one of the areas that Linux, a competitor to Microsoft Windows on the desktop and server, has been working at for some time. The idea of getting your product preinstalled on machines from the manufacturer eases the uptake burden. So has the market decided that stability of features is preferred to innovation? I doubt it, they’ve decided that it’s easiest just to use what is provided for you.

However, the story is not over yet. In the last year Internet Explorer has been losing market share. Depending on where you look, they were holding at around 95.7% market share for a good while, now Internet Explorer is standing at 86.56% market share according to infoworld from a June 14th article. The David in this story facing the Goliath of Internet Explorer is Mozilla Firefox a free open source browser. Not only is Firefox free, but it provides several useful features that Explorer lacks (tabbed browsing, faster page rendering, more standards compliance, live bookmarks (rss feeds), integrated searchbox and plugin structure.) Now for most users these features don’t matter much. I’ve yet to see someone infect their system with spyware using Firefox though. It may just be a matter of time, but popup ads and spyware are among the greatest reasons behind Firefox’s adoption.

Among technical websites (whose readers are more likely to find downloading and installing a program is not a significant cost), the uptake of firefox seems to be greater. My website typically sees as much as 30% of the viewership using Firefox (although the tag that identifies the browser can be forged.) That tag is usually forged to indicate the usage of Internet Explorer for the other reason that Internet Explorer has been the dominant browser.

In the days of Internet Exporer vs. Netscape, Microsoft and Netscape both added proprietary extensions to the web markup known as HTML. Sometimes one would be approved as a web standard, but likely if Netscape made it Microsoft was VERY slow to recognize it. This led to sites “best viewed with” and the horrendous browser detection methods that some people still use to serve up a site for a specific browser.

The main reason for this as I see it is that Microsoft wanted to “own” the market, not just lead it. They wanted to do everything they could to impede the user experience if you used a competing product. Let’s say we turn back the clock and picture the world at the time of the first automobiles. Let’s further say that there were several competitors Ford, Duryea, Haynes, Winton and a manufacturer of trains. The trains of course had been a dominant means of transportation and let’s say Train Corp. decided it needed to own this industry as well. For starters, since they made a large profit margin on the trains they constructed they could give away their cars for free. Additionally, they encouraged the building of roads with rails. See, their car would be easier to steer than the others as it would follow (if available) special rails implanted in the roads to make sure it didn’t stray. The only problem was that these rails caused several problems for the other manufacturers. Additionally, the other manufacturers couldn’t compete with a free product. Train corp. also had licensed the distance between the rails so that no competitor could make compatible cars without licensing the “technology” from them. The market quickly took up the free cars, the public demanded the rails as it seemed like a good idea (in some cases the installation was sponsored by Train Corp.) These “rail cars” took over and the other companies faded into oblivion.

The market chose the cheapest alternative, but the best?

Of course that’s not what happened, but I think it’s a useful analogy of a technology that has changed the world. I think we have a similar situation with web browsers, Microsoft was able to give a product away for nothing. It’s hard to beat that, additionaly they had it preinstalled on every Windows desktop. Again, it’s hard to beat that. Further they’ve built obstacles (proprietary extensions to the web standard and in some cases lack of adherance to the web standard) that make it more difficult for competition to get traction. What is remarkable though is that in spite of that, competition is getting traction. The market is changing.

When markets make decisions that turn out to be mistakes there are two things that correct it. 1) The Market itself. 2) outside intervention. Had Microsoft been found to abuse it’s monopoly, which many thought would be the case, then outside intervention would have started to “fix” an out of balance market. But, we find the market is still working. It is much slower I think in correcting itself when the pendulum swings so wildly one direction, but the statistics over the last year of browser usage show that the market is correcting itself in spite of some of the barriers to adoption that Firefox might have.

I do tech support for a living and introduce many people to Firefox. On one system lately, I demonstrated side by side Firefox and Explorer. My customers reaction was “Wow, that’s a good bit faster.” He continued to thank me several times for installing that for him and was excited to give it a try.

As evidence of the market change, Microsoft is now preparing Internet Explorer 7. Some are disappointed by the things that it won’t do. I’m excited by some of the mentioned improvements because it will help. The market isn’t standing still though, Microsoft will have to continue to compete on features this time, it can’t compete on price.

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