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A blast from the past - Microsoft accused of monopolistic practices

Bill Gates testifies that Microsoft Word beat WordPerfect fair and square

On November 21, Bill Gates testified in a lawsuit charging Microsoft of monopolistic behavior against WordPerfect. Microsoft is accused of altering Windows 95 to make it more difficult for WordPerfect to produce a product that functioned well under the operating system.

A simple Google search already shows over a thousand news stories covering the testimony.

There have been claims in the past that Microsoft altered Windows in a way that would hinder its competitors and help its own products by using "secret" APIs. In preparing for this article, I had the opportunity to speak to Professor Stan Liebowitz, probably the leading authority on the spreadsheet and word processor markets in the 1980s and 1990s. He shows that the evidence from actual market performance actually indicates that this is a complete myth, or at worst irrelevant.

Let's look at what happened with WordPerfect. WordPerfect actually lost the word processing market long before Windows 95 was released on August 24, 1995. In 1994, Word for Windows had over 60% of the market share and that share was rapidly increasing, while WordPerfect for Windows had 20%, with WordPerfect for DOS trailing at 5%. (The WordPerfect market share actually had been declining every year since 1990. Between 1993 and 1994, Word increased in market share from 45 to 62%, and from 62% to over 78% between 1994 and 1995.) As Windows 95 did not come out until the end of August 1995, the increase in Word's market share was just a continuation of an increase that began with Word for Windows' release in 1989. Figure 1 shows market share of the word processors.

Word Processor Market Share

In actuality, WordPerfect Corporation - although terrific at writing DOS-based word processors, was terrible at writing word processors for graphical operating systems. For example, a Macintosh-version of WordPerfect was released in 1988. Its initial market share was not that much below that of Word for Macintosh; but by 1993 Word was at over 80% of market share on the Mac, with WordPerfect an also-ran. Microsoft obviously had no special knowledge or inside information of the Macintosh operating system; yet product reviews for Word for Macintosh - as well as market share - indicated that the Microsoft product was vastly superior to the WordPerfect product.

In the Windows world, the reviews of the initial version of WordPerfect for Windows were equally if not more terrible than those reviews of WordPerfect for the Macintosh.

Further exacerbating WordPerfect's product failure was the fact that WordPerfect was late to the Windows market because the company decided to produce a version for OS/2 prior to producing one for Windows!

The mere continuation of Word's ascendance after the introduction of Windows 95, along with the compelling evidence of Word's performance in the Macintosh market, reveals that the introduction of Windows 95 had little if anything to do with Word's success. The current case therefore revolves around an irrelevancy.

NOTE: Word also part of a superior suite of products

Further cementing its leading position, Word was made part of the then-dominant Office suite on the Macintosh in 1990 and then on Windows in 1991. WordPerfect and Borland put together a joint suite in 1993, the Borland Office, eventually purchased by Novell. The Borland suite came out in 1993 with generally poor reviews because the products did not work together smoothly.

These statistics come from Stan Liebowitz, coauthor of Winners, Losers, and Microsoft (1999), who was kind enough to speak at length about this. Professor Liebowitz pointed out that some blogs have discussed Gates' testimony and used his data in drawing conclusions. Some of these blogs, he said, have not presented the results of his data accurately.

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