"Windows" Alternatives Needed

”The most extensively read book worldwide is the Holy Bible and the most listened-to music is the sound of Microsoft’s Windows Operating System (OS) as the computer is turned on.”

This joke is often heard in explaining Microsoft’s (MS) monopolistic market dominance in the IT sector.

Korea is no exception where the company’s market share for OS is 98.8 percent.

Based on MS’ powerful market dominance, the company recently made an “oppressive announcement” to the U.S. Securities and Exchange Commission (SEC), saying, “If Korea’s Fair Trade Commission (FTC) asks for corrective measures regarding Windows, they can be withdrawn from the Korean market.”

With the U.S. administration in action, exercising its indirect power in KFTC’s rulings, even its possible tensions over trade with the Korean government are mentioned.

Would KFTC’s Investigations Result in Trade Conflicts? –

MS Korea explained on the announcement, saying, “It is a routine management activity of the U.S. headquarters to warn its investors of risks in advance.” However experts say, “It is pressure for KFTC to draw a justifiable ruling on MS’s ‘bundling sales.’”

When MS appealed on the charge of monopoly and oligopoly in the European Union, it mentioned nothing about business withdrawal.

Early this month, two officials from the U.S. Justice Department visited the KFTC. They said their visit was to explain the negotiation procedure between MS and the department, but many viewed it as “pressure from the U.S. administration.”

Can MS Leave Korea? -

It would be hard for MS to give up the Korean market.

That is because Korea IT Industry Promotion Agency estimated the domestic market size of the OS to be 3.79 trillion won for 2004, and out of this, the revenues for Windows constitute as much as 3.75 trillion won (about $3.7 billion).

In addition, MS has established cooperative relationships with domestic companies such as Samsung Electronics and LG Electronics, which cannot be easily ignored.

However, adverse effects from the Windows’ monopoly, as in the repercussions of the “Windows withdrawal” remark, are huge.

A case in point is that in September this year, MS announced, “From July 2006, customer service for Windows 98 will end.”

At that time, the Korean government had to beg the MS headquarters “to delay the service discontinuation for just one more year.”

According to the National Cyber Security Center, if customer service for Windows 98 ceases, 3.5 million personal computers which the Korean government owns will become vulnerable to external hacking. To prevent this, it has to buy Windows anew.

It costs tens of billions of won to change them. Plus, to go with the latest Windows, upgraded personal computers have to be purchased at the same time.

Alternatives Are Needed -

In order not to be affected by policy changes of MS, many argue alternatives needed to be found.

One option is to use an open operating system like Linux. Unlike MS Windows with a monopoly over source codes or programs’ main designs, Linux has its source codes revealed, so users may convert the OS according to needs.

Linux has already grown as a powerful competitor of Windows in the server OS market for corporations.

According to IDC, a market research firm, as of 2004, Linux has the market share in the server OS market at 25.3 percent, and the figure is expected to top 30 percent by 2007.

In Chi-bum, a promotion team director at Hangul and Computer Co. Ltd, said, “The presence of Linux alone dropped the prices of server OS,” adding, “As for PCs, Linux’s success would lower Windows prices, and it would be profitable comprehensively for all consumers.”

Sang-Hoon Kim sanhkim@donga.com