Billions and Billions...

By Lewis A. Mettler, Esq.

(No Carl Sagan has not come back from the dead, but, the title is catchy enough to deserve reuse.)

It seems that Microsoft has estimated the expected sales of 98 for us. A recent article in ZDNet...

http://www.zdnet.com/zdnn/stories/zdnn_display/0,3440,2114145,00.html

...estimates 5.5 million sales of 98 this year and possibly 10 million sales next year for the 98 upgrade product.

From this sales projection (from Microsoft) the amount of financial harm to be caused to Microsoft customers can be estimated due to the bundling of the OS and IE.

Recently MSNBC has posted their opinion that my 30/70 ratio of the R&D expenditures for the OS and IE was getting old and tired and boring. It has been cited a lot. Almost as often as "98" itself. Both have become a bit redundant but the topics keep coming up again and again.

So. I have decided to expand the discussion a bit.

Let's take the 15.5 million expected sales for 98 (MS numbers) and assume that 54% of the Microsoft customers prefer an alternate browser to IE. The 54% is the most recent figure I

have seen regarding the current use of Netscape browsers on the internet. Therefore it is fair to assume that of the 15.5 million Microsoft customers, 8.37 million of them prefer the Netscape browser. From this number we can estimate the harm caused to Microsoft customers by being forced to buy a product they do not prefer.

But, let us not use only the 30/70 ratio. After all, the 30/70 is only an estimate and MSNBC has already told us that they prefer a different number.

So here are the numbers:

10/90 1.395 billion

20/80 1.240 billion

30/70 1.085 billion

40/60 930 million

50/50 775 million

60/40 620 million

70/30 465 million

80/20 310 million

90/10 155 million

(Sorry MSNBC staff, I did include the 30/70 number in the table so that those who like numerical progressions will not complain.)

Now these numbers only apply to upgrades to 98.

But, what about new computers?

IDC has estimated new computer sales at about 10,000,000 per quarter over the next two years. Almost all of these systems will come with the OS and IE bundle. But, here since a new license

is included the retail value of the OS and IE bundled is more like $190. But, here too we can estimate that 54% of the customers would prefer the Netscape browser. That would be 43,200,000 machines sold over the next two years where the customer would prefer not to buy IE.

Again, we can use the ratio to estimate financial harm to the consumer.

10/90 7.387 billion

20/80 6.566 billion

30/70 5.745 billion

40/60 4.924 billion

50/50 4,104 billion

60/40 3.283 billion

70/30 2.462 billion

80/20 1.642 billion

90/10 821 million

These figures are the monies paid by the retail customer. Of course Microsoft only gets part of it. But, we are measuring the harm to the consumer not the profit earned by Microsoft.

So. For those of you would like, you can add together the two figures for each possible ratio to come up with an estimate of the damage to Microsoft customers by bundling the OS and the browser from Microsoft. Depending upon your estimate of the ratio of the R&D between the OS and IE.

Now. You and MSNBC can each pick your favorite ratio.

It does not matter. And, I don't care which one you pick.

But, Microsoft has clearly spend hundreds of millions of dollars researching the developing IE just so they could force the sale on all Microsoft customers. (I think they also said it was a neat idea.) So. One of these ratios is certainly to be close to the actual numbers. Perhaps during the upcoming trial we will all find out the magic numbers.

Of course, we all know that Microsoft claims that IE is free and therefore everyone wins and no one should complain. Well. Unless you went to the moon over the last month or so you realize

that the bubblegum, jawbreakers, entertainment center and even a load of straw were all free too. It does not matter what Microsoft bundles with the OS. Microsoft customers must purchase the package whether they want it or not.

Any vendor can tell you which product in the bundle is the free one. But, that statement does not make it true. That statement is just advertising and not a statement of fact at all. Every consumer knows the truth when the store bundles two products and tells you that one of them is free. You are buying them both.

The fact is that Microsoft has spent an enormous amount of money developing a product and is bundling that product with another one in order to force the sale.

That is clear to everyone.

The only question is how much is the harm?

What are the damages?

The above numbers only try to estimate the harm.

Lewis A. Mettler, Esq.(Attorney and Software Developer)

P.S. MSNBC is more than welcome to participate in the discussion on this bbs. After all, it is their BBS.