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The strategy is not at all irrational if you consider the various initiatives that provide or will provide profits for Microsoft.

They have subsidized ActiveState (for about a million bucks if my recollection is correct), as well as many others, to assist them in their adoption of .NET and Visual Studio. The idea was to provide as many tools as possible for the developer community to foster the adoption of .NET.

Of course, Microsoft's optimal strategy, in terms of profit-maximization, also includes promoting Visual Basic over Perl.

So while on the surface they appear to be subsidizing Perl, increasing the size of the Perl community and the effectiveness of Perl is not their intent. That simply wouldn't maximize their profits, which is their primary strategic concern.

At this point they have no intellectual property rights over Perl or Python or other open source alternatives to Visual Basic (one can argue whether they're direct competitors or not, but let's abstract that argument for now) whatsoever. However, if they provide a development environment that is used by most Perl programmers when they work on Windows (Visual Studio) and a library that forms the cornerstone of programming for Perl on Windows (.NET), then they have effectively inserted assets over which they have control of some sort into the language. It also provides developers easy access to tools that tie into other Microsoft profit-making initiatives, such as Passport.

So the subsidy of a million bucks or so is not irrational, even with a profit-maximization strategy and even considering Perl as a competitor of Visual Basic.

There are also associated indirect benefits the strategy provides them; for example, .NET will likely provide a shield against future anti-trust litigation. However, I won't get into that in this response.

In any case, Microsoft executives are almost wholly concerned with maximizing profits and nothing else. If you believe otherwise, you are incredibly naive. Thus, you can rest assured that whatever behavior you see, even that which may appear contradictory, is pretty much intended to maximize profits.

Finally, I don't mean to give the impression that a profit-maximizing strategy differs wholly from the strategy that would be the social optimum. In many cases, economically, a firm's profit-maximizing strategy also provides for the greatest social good, which is why capitalism seems to be on the whole more effective than other economic systems.

However, in the case where there are market distortions (e.g., monopoly, oligopoly, or other forms of market power, as would be the case when discussing Microsoft), the profit-maximizing strategy is very often *not* the socially optimal strategy. Why that is so would fill many pages.

I hope I haven't rambled too much ... the main point to remember is that whatever is happening, it could accurately be interpreted as an attempt at profit maximization.

In reply to Re: ActiveState Perl and Microsoft by Starky
in thread ActiveState Perl and Microsoft by rob_au

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