Microsoft: Love and Hate on the College Campus

Matrix: The Magazine for Leaders in Education, June, 2000 by Stephanie Brenowitz

Microsoft's intimate relationship with the college campus may be the only great competitive strategy for which Bill Gates is not under federal scrutiny.

College campuses account for about 3 percent of Microsoft's business, a paltry amount compared to the home and office market. But higher education wields a greater influence over Microsoft than can be measured in mere dollars. And you don't need to be told about Microsoft's significance to your college campus. Look to your left and look to your right--you are bound to see a Microsoft product on almost every computer on your campus.

For years, Microsoft has ensured its dominance of the higher-education market by discounting and giving away its products to college users, and it's not just out of a sense of community spirit. Most of those using Windows or Explorer don't stay on campus--they graduate and get jobs and get promoted and become decision-makers. When it comes time to choose an operating system or office software, they choose what they know. That tendency to choose Microsoft products is no accidental product of human nature. Schools have limited resources and Microsoft wants access to their captive audience.

"Clearly, we see the products of higher education being key contributors to the knowledge economy," Toby Richards, director of Microsoft's higher-education marketing group, said. "Heck, we love it when they run our applications out into the workforce."

But that neat symbiosis may soon be thrown off kilter.

Following an anti-trust lawsuit by the U.S. Department of Justice and 19 states, Judge Thomas Penfield Jackson determined that Microsoft had maintained an illegal monopoly on the software market through unfair and anti-competitive practices. In early June, Jackson ordered that Microsoft be split into two separate companies--one that would market the popular Windows operating system and another that would sell its Office software such as Word and Excel.

Microsoft executives have always maintained that having their products on the vast majority of personal computers is just a testament to the quality of their software. They say they can't help it if everyone wants to use Windows and they certainly shouldn't be prosecuted for it.

"While we respect the government's concerns, we believe the courts ultimately will reaffirm that Microsoft has competed aggressively but fairly and that our actions have benefited consumers and advanced innovation in the software industry," Mark Murray, director of public affairs, said. Company officials have said they will fight the plan to break-up the company, now and on appeal.

Meanwhile, consumers everywhere already are wondering what the impact of a break-up will be. No one knows exactly how a new incarnation of Microsoft might affect higher education. More competition could mean lower prices--or it could mean fewer benefits for the educational market. New players in the field could lead to innovations that streamline clunky products--or they could just lead to a confusing market with lots of incompatible software.

Most college administrators and information technology professionals are adopting a wait-and-see attitude but they are not without concern.

Administrations have been scrambling for years to find the money and technological brainpower to keep up with the expectations of the savvy 18-year-olds who enroll every year.

And the technology has been changing fast enough as it is, without a potential revolution at one of the most stable elements of campus computing--Microsoft.

No one disputes that Microsoft dominates the higher-education market. Windows is the operating system, or internal software, used by more than 75 percent of the higher-education market, according to a 1998 survey by Student Monitor. Many students using other operating systems, such as Macintosh, are using Microsoft software for their word processing or Internet work.

"Frankly, the commercial software is where we make most of our revenue," Richards said.

"But higher education is a very competitive marketplace. There are 15 million students and about 2 million faculty and staff. We need to have dedicated resources focused on higher education."

The dominance of Microsoft in higher education actually began when it looked as if Apple was leading in the personal computing race. College students everywhere were buying relatively inexpensive (less than $2,000) Apples called Macintoshes that fit snugly on their dormroom desks. In fact, it was the Macintosh OS that introduced consumers to the idea of "windows," an environment where they could point and click to move around the desktop. It didn't require knowledge of any "pseudocode," as did the more cryptic and awkward Microsoft operating system of the time, MS-DOS.

While Microsoft had already made Word the standard in word processing, it seemed as though Apple was winning the operating-system contest. But then Microsoft developed Windows, an operating system that looked like the Macintosh but was designed for the less expensive Intel-based PCs. Those who had grown so fond of the Macintosh system began to look over at their neighbors' PCs. They looked like the Macintosh, only they seemed faster, and cheaper, and networked better. PCs became the norm, and Microsoft along with them.