Two Baby Bills will rake in the readies even more than one big MS

Microsoft may be acting irrationally to the threat of a split-up because it is Bill Gates's baby, but two Microsofts should be...

Microsoft may be acting irrationally to the threat of a split-up because it is Bill Gates's baby, but two Microsofts should be able to do a better job of exploiting two monopolies than one.

Jack Schofield


Costs will rise as sales, marketing, human resources and other functions have to be duplicated, and economies of scale are lost.

But users will have to pay much more to use both the Windows operating systems and the Office applications, so the separated companies will come out ahead.

  • The Microsoft Windows company, MSW, will no longer have to forgo Windows profits to seed the ground for sales of more profitable applications. And, just in case real competition appears eventually, it will maximise profits as quickly as possible, as capitalism demands.

  • The Department of Justice's "fixed" prices will increase the average cost of Windows. The large companies, which ship tens of millions of PCs, will pay more because they'll lose their special deals. The small companies will pay a bit less, but that discount will reach fewer people, if any. (More likely they'll point out what hopeless margins they earn and pocket the difference.)

  • You can forget about free updates downloaded from the Web. Manufacturers will be able to pay less for Windows by leaving bits out.

    Unfortunate punters will have to download the extra bits from MSW (because their applications won't work otherwise), and why should they be free?

  • MSW will have every incentive to eliminate individual piracy, so it will log serial numbers and prevent users from installing a copy of Windows on more than one machine. This will be easy once users are dependent on paid-for downloads from the Web.

  • Logged and paid-for downloads will enable MSW to convert Windows into a rental software operation like IBM's.

    Users won't get CD-Roms, but will subscribe to a service that allows MSW to browse their hard drives and install and update components at will. The price will be attractive: less than $1 a week.

    MSW will, therefore, get $42-$44 per user per year for life, with no need to do any work adding features to encourage sales. That compares with the average one-off payment of about $42-$44 per copy for Windows, or $10 a year.

    Jack Schofield is computer editor of the Guardian

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