Microsoft Software Dominance: Good? Bad?

AS the computer industry's big trade show, Comdex, opens in Las Vegas today, Microsoft Corporation towers, more than ever, above the rest of the computer world.

The Windows software made by the Redmond, Wash., company controls more than 80 percent of personal computers sold today. And for the next few years at least, that dominance appears likelier to grow than shrink.

``For the next five years it looks like Microsoft is pretty firmly in the driver's seat,'' says Charles Ferguson, author of ``Computer Wars'' and an independent consultant in Cambridge, Mass.

Not that Microsoft lacks eager competitors. Apple Computer Inc. in Cupertino, Calif., and IBM Corporation in Armonk, N.Y. are at Comdex promoting their plans for making personal computers that can run either Apple or IBM software, giving users a choice even after they've bought a PC.

Meanwhile, Apple and IBM are airing television advertisements that imply Windows is inferior. A pitch for Apple's Macintosh software shows a frustrated Windows user whose son walks out on him as he struggles to load a disk about dinosaurs. In another ad, savvy young people ooh and aah about OS/2, IBM's software.

Windows users

But these otherwise-viable alternatives to Windows face one gargantuan problem: Developers of software applications - from games to accounting products - are focused on the market with the most customers, Windows. These applications determine a computer's usefulness. Although Mac- and OS/2-based machines can run current programs designed for Windows, there is no guarantee that this will remain true as new versions of Windows are released every two years, starting in the middle of next year with a version called Windows 95.

``More and more people are coming to regard Microsoft as the standard builder, the company that lays the tracks into the new territory,'' says Jesse Berst, editorial director of Windows Watcher, an industry newsletter.

This is bad news for companies such as Apple and IBM, that have tried to set their own standards, laying parallel tracks into computing's Wild West.

But for smaller companies, Microsoft's dominance is not necessarily a bad thing. They may not like the giant, but its clout simplifies their efforts; they can reach huge markets by writing software for Windows users only.

In turn, the abundance of applications for Windows makes it the simple choice for many computer buyers, too. ``Maybe it's even best if there's only one, or at least a dominant one,'' provider of software platforms, Mr. Ferguson says. But he says he believes that ``Microsoft has become a little bit too powerful.''

A central issue, already visited at length by the Justice Department's antitrust division, is whether the company uses Windows as a wedge to get an unfair advantage in other markets. Microsoft makes most of its money on applications, including office-productivity software such as spreadsheets. Now the firm is moving aggressively into other areas, such as entertainment and education.

Windows 95 will include promotion of Microsoft's new on-line service for sharing messages and information. ``You can't install Windows without getting asked if you want to join Microsoft Network,'' Mr. Berst says.

Financial software

Antitrust scrutiny has been revived in the wake of Microsoft's recent $1.5 billion plan to purchase Intuit Corporation, whose Quicken product is the leader in personal-finance software. Competitors worry that Microsoft could dominate the budding market for on-line financial transactions - using computers and telecommunications to bank or shop from home.

Last week Microsoft announced a partnership with Visa International to pursue this.

Regulatory approval of the Intuit purchase ``may not be a rubber stamp,'' Berst says.

It is unclear whether any major antitrust charges will stick. In the 14 years since the then-tiny company was hired to provide the basic software on IBM's first desktop computer, Microsoft has risen as much by competitors' bungled opportunities as by its own aggressive style.

Still, Microsoft's armor may have unforeseen chinks. One arena for change is the much-expected convergence of computers with televisions or mobile telephones. Some analysts say a ``third age'' of computing, following mainframe computers and PCs, is near. Another shift could come with ``object oriented'' software, which makes it easier to create new programs by using building blocks known as objects.

Berst says Microsoft's very success could become a disadvantage. ``The more dominant it gets the more pressure'' there is for new Windows versions to be ``backwards compatible'' - able to run software designed for previous versions. This can cause compromises in adopting new technology.

For now, though, Microsoft remains ascendant. Windows 95 promises to close gaps in performance and ease-of-use that have attracted people to Apple or IBM software. And today Microsoft launches its own $100 million advertising campaign to raise awareness of the brand and of the software's capabilities.