This paper discusses the standard of operation system (OS) in the personal computer industry, and how Windows finally became a standard of this industry. To comprehend better of this process, we critically evaluate the proprietary regime and what is the effect of this regime on the diffusion process. This paper also provides a short view of network effect and switching cost, product preannouncement that have influenced the outcome of the standards competition.
1. Introduction of Windows and Mac OS
There have been two distinct operation environments along with personal computer industry, Windows and Mac OS. They are undergoing an intensive standard race over the past 10 years. Windows is an operation environment introduced by Microsoft in 1985, a strong market leader which accounts for more than 90% usage share in 2009 with its high quality and easy handling graphical user interfaces.1 Mac OS is a system developed by Apple, a small usage share of 6% and less well known in operation systems.2 The two systems are incompatible with each other by different technology support.
Technologically speaking, both have their advantages. The Windows is supported by hardware configuration, which is provided by a series of hardware manufacturing, like INTEL ?AMD. On the other hand, Mac OS has its uniqueness which is a way to differentiate it from all other personal computers out there. Mac OS is only to be installed at Apple’s computer by Apple’s license agreement, that is to say Apple is not to license their OS. What is more, Windows is able to run on any portable application and there are a mounting number of end systems could be offered with it. By contrast, Mac OS is compatible to limited software.
2. The Development of the OS Standard
By the early 1980s, some small companies which led the minicomputer market in the late 1970s have been taken a hand by larger computers. A smaller number of de-facto industry standards have developed. In 1981, when the largest computer firm which is IBM entered into the microcomputer area and made the decision that all the IBM PC shipped with IBM PC-DOS which is a licensed version of Microsoft’s MS-DOS rather than the superior industry-standard CP/M-86 operation system.3
In 1984, 4 Microsoft achieved growth of revenues from MS- DOS’s sales by IBM and other competitor’s manufacturers who were willing to buy MS-DOS license to be shipped with their computers. However, it still achieved little popularity and it was competition with Apple’s own OS.
Back then, the industry expected that the IBM would be the technical direction .However, 1987 when IBM made a risky business decision that chose to introduce their PS/2 line which would be licensed to anyone who could afford the royalty, however it failed to maintain the open AT bus.8 PS/2 line made the IBM machines were not IBM-compatible anymore. Because of that, many PC manufactures hold off accepting the PS/2 licenses and worked together on a new open bus type to all manufactures, which lead to that IBM no longer the leader and standard of the industry.
Around the same time, at the beginning of the 1990s, 9 Microsoft developed a brand new OS –Windows, which turned out being very popular. At the same time, IBM would prefer to replace DOS with its vastly superior OS/2, but Microsoft insisted on pushing the industry standard with Windows.With lower price and high technically superior performance, Windows became the de-facto standard with more than 2 million selling of copies of Windows version 3.0 in 1992.
After then, Windows 95 made a revolutionary change to the user interface and also used preemptive multitasking. During that time, the early adopters of computer tended to use the internet to communicate the strengths and weaknesses of Windows 95 and programming more software. Windows XP was released and becoming the largest usage OS ever. In 2009, a new edition –windows 7 focused on new features with more compatible applications and hardware. Moreover, in 2011, a preannouncement of Windows 8 has been made that will be released in 2 years later in order to affect the choices of potential customers.
In fact, Windows OS would be an open format with all the computers shipped with Windows is capable of using extensive compatible software. Moreover, the historical record reflected that the key to the success of Windows OS lay in the fact that Windows can be licensed to PC manufacturers as much as possible.
3. The MAC OS Threat
Despite the extensive success of Windows OS in the past 20 years, industry competitor still is trying to change the market. Some preserved with the unique and technically superior system, like Mac OS by Apple. Apple’s Macintosh developed in 1984, which achieved a commercially successful in the beginning of 1980s. Macs are rapidly growing in popularity by its unique software/hardware market niche. They insisted on their unique standard with their proprietary system which is Mac OS that would run nothing anyone else programmed.7 In the case ofcomputer OS, Mac OS has very limited compatibility with other programme but on the other hand, is quite easy to use and requires relatively little maintenance, which is the reason why
It is undergoing a slightly growth in the usage market in comparison with previous performance.
4. How the proprietary regime would affect the diffusion
As we all know that the value of a specific computer system depends on availability of compatible software 11.User usually not care whether others use the same computer as me, but I benefit indirectly from the fact that there are many other users of the same product which means that there is a large market of software.
The historical record of Windows OS and Mac OS has shown that fact that Windows OS is a relatively open standard. Microsoft knowing that they would not dominate the market on their own without the cooperation to other computer manufacturing. Thus they licensed the Windows OS to other companies which at last achieved a monopoly on OS market with 90% share and all computers running their OS. Apple, by contrast, made its Mac OS closed standard. They has a high monopoly on Mac os with 100% of their computer
Kennedy, Randall C. (2008-04-14). “Fat, fatter, fattest: Microsoft’s kings of bloat | Applications”. InfoWorld. Retrieved 2010-01-12.
G.M.Peter Swann The Economics of Innovation An Introdution 2009