They merely take other peoples ideas and enhance them,

Could you please explain why you think a difference between IBM and MS in terms of their product creation methodology (invention vs. enhancement) should lead to a different assessment of the morality of their business practices?  E.g. if I require my resellers to sign an exclusivity agreement, why should it matter whether I invented the technology in question, or licensed it from a third party?

Have you ever tried to buy a x86 branded laptop that didn't have Microsoft Windows pre installed, even if you didn't want it?

Yes, as a matter of fact.  My current laptop is an ex-lease unit, bought with full warranty, and without any installed software including operating system (it now runs Ubuntu Linux).  If I wanted a new unit, I could buy a Mac preinstalled with YellowDog Linux.  There are options out there; it's the sign of a healthy market that Microsoft could not entirely suppress competition through contracts with resellers.

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Well Duncan at least we agree about Microsoft's attempts to manipulate the market. And I also agree that IBM attempted much the same thing. In most circumstances these manipulations would be considered laudable competitive strategies, just part of the cut and thrust of the business dynamic and in a truly competitive free market environment would result in products that benefit both the consumer and the manufacturer. My support for IBM in this case was only because IBM research and development has a long history of creation of genuine technological advances in computer engineering. IBM personnel invented much of the fundamental infrastructure of the computer systems we take for granted. Microsoft has invented nothing. They merely take other peoples ideas and enhance them, while actively trying to suppress all competitive response. That is why I believe Microsoft founders would not qualify for the status necessary to be considered a worthy entrant to Ayn Rands enclave of heroes as celebrated by John Galt in Atlas Shrugged. They are not the leaders and innovators of industry that the computer buying public perceives they are. IBM in the form of many of its illustrious entrepreneurial staffers and scientists definitely is.

Microsoft has demonstrated a long history of anti competitive manipulation of the marketplace. Their massive financial resources enable them to control elements which in the normal market environment would never occur. Have you ever tried to buy a x86 branded laptop that didn't have Microsoft Windows pre installed, even if you didn't want it?

The real problem in resolving this issue for those of us with an objectivist view is that we try to take sides that appear to be contradictory in this debate. I think that Eric Raymond, a well know open source advocate and Libertarian commentator has it right and certainly explains it much better than I can when he says;

Quote.

"One camp holds that Bill Gates is a big enough devil to justify the government in coercively putting him down. Another camp (largely, and predictably, composed of Randites) canonizes Gates, casting him in the Roarkian role of hero-entrepreneur beset by statist little men.

The argument of the devil-Gates crowd is that the Microsoft monopoly is a classic case of market failure, requiring government intervention to set it right. These people need a remedial course in economic history; the antitrust laws have a very bad record, having been used mainly as a tool with which to reward the well-connected and injure the politically disfavored. Thus, it would not be a sufficient defense of antitrust law to establish that it happens to be whacking a real villain this time. We have to look at its accumulated record over time.

After all, even legislation as wrongheaded as the anti-drug and anti-gun laws catches a real villain occasionally. As libertarians we judge the cost in lost freedom too high for the good they occasionally do. So too we should judge antitrust law.

Market failure is only solved by freer markets. Historically, monopolies are unstable with a half-life of around fifteen years unless propped up by government-created barriers to market entry. Any public-choice economist will tell you that government intervention is chronically subject to political failure, a cure worse than the disease. In fact, not only does government intervention fail to be a reliable cure for `market failure', it is the primary cause of market failure -- as Theodor Vail, the founder of the government-sanctioned Bell Telephone monopoly, knew full well.

The devil-Gates crowd is making a bad mistake, copying statist rhetoric and statist arguments in a way that will end up benefiting only statists. But the hero-Gates crowd is doing something much worse. They are teaching non-libertarians that libertarians cannot be relied upon to condemn behavior that is clearly wrong."

Unquote.

Of course in the real world most people couldn't care less about these machinations over the politics of software systems. Despite all the talk about "computer literacy" and "computers in schools" most of the buying public have no idea of the technical merits or liabilities of different software platforms. And of course there is no reason why they should when all they want is a tool to do the job. It is a pity that the tool they often get is poorly designed, unstable and vulnerable to all the malicious intervention that its flawed file system makes it susceptible. Which just goes to prove that like 'man made global warming", you can fool most of the people most of the time if you manipulate the science and tell them lies often enough.

IBM participated in exactly the same market manipulation as Microsoft, right down to the use of vaporware to harm competitors to their System/360.  It was for these actions amongst others that the DOJ brought suit against them in 1975 (see IBM Antitrust Suit Records 1950-1982 for details).  If they are helping the EU to harm Microsoft because they think they have been wronged by Microsoft's business practices, they would be guilty of the most contemptible hypocrisy.

More importantly, Microsoft originally had no intention of 'competing' in politics, when they could compete in industry instead.  They only changed their position after being reamed by the DOJ at the behest of their competitors who, while failures in the IT market, were members of the 'aristocracy of pull'.  As Fortune magazine explains:

"For a couple of embarrassing years in the mid-'90s, Microsoft's primary lobbying presence in D.C. was "Jack and his Jeep." As the software giant's sole in-house lobbyist, Jack Krumholtz, then 33, had to battle endless traffic jams to get from Microsoft's suburban sales office to Capitol Hill. "Early on I spent most of the day in my Jeep Grand Cherokee on my cellphone," Krumholtz says. "I hit an all-time low on the day I was parked on a Capitol Hill side street reading through my mail with the laptop on the steering wheel."

No longer. After the Justice Department filed its antitrust suit in 1998, Microsoft--a company famous for its disdain of government--undertook the largest government affairs makeover in corporate history. The company now boasts one of the most dominating, multifaceted, and sophisticated influence machines around, one that spends tens of millions a year."

Sure, Microsoft have built a few lousy software products in their time.  But anyone who was too unhappy was quite free to buy a machine running MacOS, NeXT, BeOS, Amiga OS, Linux, *BSD ... and yet they didn't, and for the most part still haven't.  Why?  Convenience, and value for money ... the same values that attract people in their millions to buy food from under the Golden Arches every day, when they could go out of their way to buy a hamburger from the local deli for triple the price, or cook one themselves in the evening.

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A basic premise of Atlas Shrugged was the rising up of the "men of the mind", specifically engineers who withdrew their intellectual contribution to society because of their disgust at the political manipulation of their business ventures by the looters and the moochers. Engineers were predominantly the heroes of the novel. Software development would certainly fall in the modern context into the engineering domain. However would Rand have readily included Bill Gates, Paul Allen and Steve Ballmer in the assembly of heroes welcomed at Galt's Gulch?

In a book entitled The Revolt of the Engineers, Edwin T. Layton described the ideology of the engineer as a kind of "philosophy of engineering" grafted atop the ethics of Herbert Spencer,(a prominent classic-liberal political theorist) resulting in a creed that values professional excellence, practical rationality, rugged individualism, and laissez-faire capitalism. Without doubt Microsofts' founders would certainly be welcomed at Galt's Gulch for their approach to capitalism but I would argue that they would fail miserably to meet Rands standards in some other elements of Laytons description.

Lets think about professional excellence for example. In my limited experience of about twenty five years involvement in the IT industry I would guess that at most 5% of computer system users have any interest in or broad knowledge of the history and structure of software development. The majority use computer systems because they have to if they are to survive in the modern business world. They use Microsoft systems mainly because that is what comes installed on the computers they get to use at work. Most accept that they must periodically restart their computer to ensure it continues to work properly and almost all have learned the hard way that it pays to save your document regularly if you are to be sure of having anything left of your effort when the application program stops working. Most users think that this scenario of operation is normal. The perception of the users is that computers are flaky and unreliable things and are not to be trusted if you value your information store. Those of us who choose not to use Microsoft systems know that this is not the case, but we are in the minority. We also know how difficult it is to get people to change away from a technology that they have grown to know very well and don't want to even contemplate relearning.

So much for the free market concept of the best value product rising to market dominance. In reality Microsoft has contributed virtually no innovative intellectual value to computer technology. They have invented nothing, but through skillful marketing have managed to secure the majority of market share on the desktop where the users are generally naive. The server market has been much more difficult for them because the users are not so naive and that is where they have been especially reluctant in recent years to allow the publication of the Application Programming Interface documentation which is the subject of the EU directive.

I wonder what the citizens of the world would say if Toyota, the worlds largest car maker was to decide to go into the trailer business but the only vehicles that Toyota trailers would be able to be towed by were those that had a proprietary tow ball mechanism designed and manufactured by Toyota, the details of which were not to be released to any other vendor of trailers or other vehicles? Objectivists might say good luck to them, but if Toyota already had a large enough market share would the citizens of the towing world stand on principle and refuse to buy the proprietary product? Would the world of free enterprise and unbridled automotive capitalism be better off?

The role of IBM in the history of computer technology exemplifies the excellence that Rand would have seen as representative of the heroes of Galt's Gulch. The technology innovations that IBM created form the basis of much of the infrastructure that Microsoft systems rely on for their operation today. Who can blame IBM for being part of the latest EU assault on Microsoft when IBM itself was treated by the EU in exactly the same way in 1984.
See: http://www.cptech.org/at/ibm/ibm1984ec.html . Who came to IBM's defence then?

All objectivists know the stupidity inherent in the EU member countries when it comes to supporting issues like man made global warming and their preference for socialism and state control despite all their experience and knowledge of its evils. I certainly don't condone the long prosecution of Microsoft in the US or in Europe for supposed violations of anti trust legislation which should not exist but in my opinion based on their history of attempting to suppress independence and individual achievement of other developers in the industry not all of whom are directly their competitors the founders of Microsoft are more representative of the "Looters and Moochers" of Atlas Shrugged than they are the heroes of Ayn Rands magnificent tribute to independent and rational thought. I have no doubt at all that if the roles were reversed that Microsoft would do exactly the same thing as IBM, Sun and Oracle are doing to them in Europe.