Linux vs. Windows Case Study

The Linux vs. Windows case study presented Windows as the incumbent platform with a first mover advantage and Linux as the challenger. I would like to take a different approach to analyzing these two platforms and see what we can learn. If we assume that the history of Linux starts in 1991, Linux is following in the footsteps of Windows. But if we consider the hereditary connection between Linux and Unix, the story of Linux now starts in 1969, and Windows becomes the challenger following in the footsteps of Unix.

When you look at the history of AT&T and Microsoft you start to see a lot of parallels. AT&T and Microsoft both managed Unix and Windows as a proprietary platforms. AT&T and Microsoft both faced major regulatory challenges with AT&T’s forced breakup in 1982 and Microsoft’s antitrust ruling in 1998. Viewed in this context, Microsoft has been following in AT&T’s footsteps. This begs the question, is Microsoft doomed to repeat with Windows the same mistakes AT&T made with Unix?

My research into this question provided an answer that I didn’t expect. The histories of AT&T and Microsoft are very similar with their management of Unix and Windows, but they have one critical difference. That is their relationship with Apple. This opens an opportunity to look at the first mover and second mover advantages these companies have employed managing their products.

Introduction
When discussing Linux it is impossible to ignore Unix. When discussing Unix it is impossible to ignore Bell Labs. And when discussing Bell Labs it is impossible to ignore the breakup of AT&T and the Telecommunications Act of 1996. When we consider the hereditary connection between Linux and Unix, and the long history of this platform, Linux becomes the incumbent platform and Windows becomes the challenger platform. The Case Study and Class Discussion

The Case Study focused largely on Linux as an Open Source application, and asked us to analyze if an Open Source shared platform had advantages over the Windows proprietary platform. The case study also focused largely on the economics of competing against Free and the difference between shared and proprietary platforms. The case study presented Windows as the incumbent platform and Linux as the challenger, and did not go into First Mover or Second Mover advantages. The class discussion was interesting, not only because of the insight provided into the case study and the diversity of opinions, but also because the distinction between Linux and Unix was not very well defined. Several people identified Apple’s OS X and FreeBSD as variants of Linux. The statement that OS X is a variant of Linux is incorrect, but has some elements of truth . Are Linux and Unix the same thing? The answer is Yes and No. (Aamond 2008). OS X, FreeBSD, and Linux do have a shared heritage with Unix (See Figure 1). This slight mistake saying that OS X was a version of Linux sparked my interest in researching the longer history of Unix. Most frameworks for analyzing a product don’t account for the long lived products like Unix. This lead me to the next point of research with The Long Tail.

The Long Tail
Chris Anderson of WIRED magazine describes four inflection points in the life of a product (Anderson 2007). These inflection points are 1) when a product reaches a critical price, 2) when a product reaches a critical mass, 3) when one product displaces another, and 4) when a product becomes a commodity (when it enters The Long Tail). These concepts were explored in detail in many of the other case studies presented in class. Linux and Windows are on two different sections of this Long Tail. Much of the Long Tail analysis deals with The Long Tail itself when a product becomes a commodity. Linux is a commodity and clearly exists in The Long Tail. When a product is free, the platform providers make their money from secondary revenue streams like support and services.

When we look at the long timeline of Unix, Windows began displacing Unix around the time of the Browser wars in the late 1990s. Unix was the dominant operating system for Web Servers and Windows started to displace Unix around this same time. Soon after that, Unix became a commodity with the proliferation of Linux. Parallel Histories

As you start to lay out the histories of Unix, Linux, and Windows in the timeline of The Long Tail, you start to see a number of parallels. Both Microsoft and AT&T faced competitive challenges, regulatory challenges, and their own missteps. Sometimes these companies addressed the challenges in similar ways, sometimes they didn’t. The ultimate fate of AT&T has already been written, but the ultimate fate of Microsoft has not. The ultimate fate of AT&T is a bit confusing though. The AT&T that exists today is very different than the AT&T that invented Unix. I will explore the recent history of AT&T to clarify what actually happened to the company. That is an important step to understanding if Microsoft is headed in that direction.

I expected my research would lead me to the conclusion that Microsoft was in fact headed for the same fate, and that was the direction my research was taking me at first. The important difference between AT&T and Microsoft is not in the difference in their primary industries nor in the time in which they were dominant. The most important difference between these two companies is in how they exploit First Mover or Second Mover advantage in their markets. This realization sent me in a new direction.

The key to understanding Microsoft’s Second Mover advantage requires understanding Microsoft’s relationship with Apple. I will review the history of the relationship between Apple and Microsoft, and how the lawsuits between the companies shaped both their paths.

I will also discuss the current patent lawsuit Apple has filed with Samsung. This lawsuit is important for two reasons. First, it has an interesting parallel with the copyright infringement lawsuit Apple filed with Microsoft. And Second, this current lawsuit opens an interesting opportunity for Microsoft to rebuild itself and continue to avoid the problems of AT&T.

The irony of Apple’s relationship with Microsoft is that Apple is building their products using a variant of Unix (See Figure 1). This completes the circle and brings us back to our discussion about Windows, Linux, and Unix. This ties back to my original assertion that Windows has been the challenger platform while Unix and all its descendants are the incumbent platform.

History of Unix and Linux
Invention of Unix at Bell Labs.
Unix was invented at Bell Laboratories in 1969 by Dennis Ritchie and Ken Thompson. Bell Labs was working on a time sharing system known as Multics. UNIX was developed as an alternative operating system that ran on a DEC PDP-7. Unix was originally developed in Assembly Language. Then in 1971, Ritchie and Thompson’s second great invention, the C programming language, was used to rewrite Unix. This allowed Unix to be more portable to other systems.

Licensing of Unix to other companies.
In 1975 Unix was made available outside Bell Labs with a collaboration with Berkeley University known as BSD. This collaboration helped improve the Unix product but also created conflict between AT&T and BSD.

The breakup of AT&T and the licensing fees for Unix.
Shortly after the PBX wars, the US government forced the breakup of AT&T. Bell Labs was given the freedom to try to make money from Unix. Unix became fragmented because each implementation of Unix was optimized by the hardware vendor (See Figure 1). There were very few standards for hardware at the time so there was very little interoperability between hardware vendors.

In 1989, AT&T formed a group called AT&T UNIX Software Operations in preparation for spinning the unit off into a separate company. In 1991, UNIX Systems Laboratories (USL) became a separate company.

Telecommunications act of 1996
In 1996, AT&T spun off Bell Laboratories into a new company, Lucent Technologies. The inventors of Unix, Ritchie and Thompson, stayed with Lucent Technologies but they primarily focused on telecommunications hardware.

The correlation between the Telecom act of 1996 and the creation of Lucent Technologies is hard to overlook. AT&T stated that they spun off Lucent so that they could profit by selling their technologies to other long distance companies that were gaining prominence. However, Sec. 272(f)1 of the Telecom act restricts long distance providers from engaging in the manufacture of telecom hardware. AT&T could have applied for an extension, but instead chose to divest itself of Bell Labs. The primary significance of this for this paper is that this marked the complete separation of AT&T from Unix. AT&T had already spun off USL to manage Unix, and now it was spinning off Bell Labs. AT&T let Unix go.

History of Windows and Microsoft
DOS, OS/2, and the early days of Windows.
Microsoft got its start in the golden age of microprocessors. They originally developed the BASIC programming language for many of the new microcomputers. IBM began development of the PC and contracted with Microsoft to supply BASIC for the new PC. IBM was unable to contact Gary Kidal to license the CP/M operating system, so the contacted Microsoft to write what became DOS.

Microsoft and Xenix.
In 1980, before the contract with IBM to create DOS, Microsoft developed their own Unix like operating system known as Xenix. Microsoft purchased a license for Unix from AT&T but they did not purchase a license to use the Unix name. They therefore created the name Xenix. Microsoft created a version of Xenix for the DEC PDP-11 and then ported it to the Zilog Z8000 microprocessor. They then contracted a company named The Santa Cruz Operation to port Xenix to the Intel 8086 microprocessor. As Microsoft focused more on DOS and their relationship with IBM, they allowed SCO to take over Xenix.

Windows Begins
Pablo Picasso famously said that Good artists borrow, Great artists steal (Cringely 1992). Thus began the famous battle between Microsoft and Apple as to who could best steal the secrets from Xerox PARC. Steve Jobs visited Xerox PARC in exchange for giving Xerox stock in Apple before their IPO. Xerox was not interested in marketing all of the innovations being developed at PARC. Adobe Systems was formed from PARC to market the PostScript language which helped promote Xerox printers (Gladwell 2011) but innovations like the Graphical User Interface (GUI) were left for Apple to market. Microsoft had been selling a Spreadsheet named Multiplan for the CP/M operating system, but had fallen far behind Lotus 1-2-3 on the PC. They saw the new Apple Macintosh as an opportunity to explore a new market so they created the Excel spreadsheet for the Mac in September 1985. In November 1985 Microsoft released the first version of Windows. This lead to the famous conflict between Bill Gates and Steve Jobs where Jobs accused Gates of stealing Windows from Apple, and Gates reminding Jobs that he was stealing the Mac from Xerox PARC (Cringely 1992).

Microsoft was promoting Windows through the 1990s but they were still dealing with the system limitations of DOS. This changed with the development of Windows NT. Windows NT borrowed many concepts from Unix to create a new whole new operating system.

The Browser Wars (or we should say the Web Server Wars)
On May 26, 1995, Bill Gates wrote a memo titled, “The Internet Tidal Wave.” (Gates 1995) In this memo, Gates identified how Netscape posed a new threat to Microsoft and Windows. Gates laid out a strategy to move Microsoft aggressively into the internet market.

While this memo is known as the start of the Browser Wars, the first item Gates identified in his memo for Microsoft to address was the Web
capabilities of Windows NT. Netscape was employing a strategy of subsidizing their browsers so that they could control the standards that would be used by the Web Servers. Netscape would then have an easier job selling their servers to less elastic customers. Gates recognized this too.

Microsoft successfully defended itself from Netscape’s envelopment attack, but Netscape retaliated in court. The US Justice department filed an antitrust lawsuit against Microsoft. The courts ruled that Microsoft was using predatory marketing to defeat Netscape and caused consumer harm by exercising a monopoly. After the antitrust judgement was handed down in 1998, Microsoft was forced to unbundle elements of their web browser from the operating system. This is very similar to the unbundling requirements of the Telecom Act of 1996.

The judge in the antitrust case originally ruled that Microsoft should be broken-up like AT&T was in 1982. Microsoft appealed this judgement and so the litigation continued for another five years. The consent decree Microsoft finally agreed to required them to unbundle middleware applications (like email and web browsers) from the Windows operating system, and be more open with the Windows API.

Window market share peaked around this same time (Gruener 2008). In 2004, Microsoft started losing market share to Apple and Linux. Microsoft responded by filing patent lawsuits against Linux distributors (Parloff 2007) but has been losing market share for nearly ten years.

Is Microsoft headed for failure?
Some are questioning if Microsoft is headed for a lost decade (Eichenwald 2012). Microsoft has recently posted its first quarterly loss since the company’s IPO in 1986 (King 2012) and the majority of these losses came from Windows.

A primary problem with Microsoft is that they do not have a strong presence in mobile. New platforms like smartphones and tablet devices have been growing rapidly since the introduction of the iPhone in 2007.

The mobile tablet and smartphone OS market is currently dominated by a duopoly between two of Unix’s grandchildren, Android and iOS. This duopoly is making it very difficult for Microsoft to enter the mobile market. Microsoft only has about 4% of the mobile phone market and that market share is going down (comScore 2012). Two problems Microsoft has always had with mobile devices are Design and Power Consumption. Microsoft tried to exploit a first-mover advantage with mobile phones with Windows CE. Windows CE 3.0 which was released in 2000 was released well before Apple or Google started developing a mobile phone operating system. Microsoft was not able to exploit their first mover advantage in this market because the market itself wasn’t ready. Windows CE was largely a scaled down version of the desktop Windows and so the user interface did not translate to the mobile phone. Windows CE had additional problems with power consumption, only providing a few hours of standby before requiring a recharge.

There were several technical limitations for Windows CE devices in 2000 through 2005. The Windows CE platform had a very complicated and unfriendly process for installing and distributing applications. Apple later solved this problem with the iTunes App store. Microsoft also had poor quality control over third party developed applications. The biggest problem with the Windows CE devices at the time was the lack of wireless data transfer capabilities. Early Windows CE devices did not have WiFi, so the only way to get data to the phone was through ActiveSync while the device was tethered to a Windows PC. Cellular data-plans were still several years away, so 3G and 4G technologies were not available either. Again, Apple solved these problems with the iPhone by working closely with AT&T to establish data plans and create the ecosystem needed to support these phones.

Microsoft’s failure with Windows CE could be comparable to Unix’s failure to popularize the GUI. There were several GUIs available for Unix. The Xerox Alto that inspired Steve Jobs was running a version of Unix, and X-Windows was available at the same time that Microsoft was launching Windows. Again, the problem was the lack of a ecosystem to support computers running a GUI. Video graphics were primitive compared to today, and even something as simple as a mouse wasn’t commercially available. The original computer mouse cost roughly $300 to produce. Apple worked with IDEO to create a simpler, less expensive mouse to ship with the Lisa and Macintosh (Gladwell 2011). Again, Apple solved a problem that the first mover couldn’t. The Apple Factor

One major difference between AT&T and Microsoft is that AT&T’s success is largely based on its first-mover advantage while Microsoft has largely enjoyed a second-mover advantage. The second mover advantage Microsoft enjoyed has largely been built on enveloping technology popularized by Apple. AT&T built a first-mover advantage with UNIX, and now that first-mover advantage has been handed down to Linux as it explores the Long Tail of the market. Microsoft on the other hand has built a second-mover advantage by embracing technologies that have largely been established. And in most cases, established by Apple. Apple paved the way for Windows with the GUI of the Mac. Apple maintained its first mover advantage is several markets through the years, but Microsoft captured the majority of the market as a second-mover. This second-mover advantage is Microsoft’s key to avoiding the fate of AT&T.

Apple and Microsoft battle in court
Apple sued Microsoft in court over what it considered Copyright infringement. Apple claimed that Microsoft copied the GUI of Windows from Apple (Andrews 1993). The lawsuit was based on the similarity of the visual elements between Microsoft Windows and the Apple Macintosh and Lisa operating systems. This lawsuit was complicated by an additional lawsuit filed by Xerox against Apple for similar infringements. This lawsuit was damaging to both companies. Bill Gates estimated that Microsoft’s legal costs at $10 million encompassing “30 man-years of lawyers.” (Andrews 1993) The lawsuit was finally settled in 1993, but the damage to Apple was significant.

Apple ran into financial difficulty and was finally saved in 1997 by Microsoft (Abell 2009). Apple saw Microsoft’s Windows as a direct envelopment attack. Apple was the first mover in the GUI market (since Xerox chose not to market the Alto), but they were having problems adapting to the economies of scale with their tight control of the Macintosh platform. Microsoft, on the other hand, followed the model of controlling the technology but letting other companies deliver the platform. This gave Microsoft a cost advantage over Apple and helped Microsoft adapt better to the economies of scale. The strategy Apple chose to combat this attack was to fight Microsoft in court. This is a viable strategy, but the lawsuit took too long to settle. The suit was first filed in 1988 and wasn’t settled until 1993. Five years is a significant amount of time in the technology industry. Apple’s strategy may have worked better if they settled more quickly. But instead they continued to lose market share to Windows.

The mistakes Apple was making during this period between 1988 and 1993 have already been discussed in our class, there were several Apple mistakes listed in the Linux vs. Windows case study itself. Apple executed very tight control over the technology and was the exclusive provider of the hardware. Apple also made the mistake of charging $10,000 for the development kit. Microsoft on the other hand gave the Windows SDK away for free.

While this has been discussed before, we did not discuss this in terms of Apple’s first mover disadvantage. The high price Apple was charging for the development kit was in line with the cost of a Unix license, so they likely did not see that as a problem. This is a classic first mover disadvantage. Microsoft capitalized on this with Windows by learning from Apple’s mistakes, a classic second mover advantage.

Is Apple creating a new opportunity for Microsoft?
Apple is repeating the same mistakes it made in the early 1990s in its fight with Microsoft over the GUI of Windows. This time its fighting with Samsung, HTC, and other Google Android phone manufacturers (Sydell 2012). This time the conflict is over Patent Infringement. This could give Microsoft the opening it needs to promote Windows 8. Apple is claiming that it holds patents on the look and feel of the iPhone that were copied by Samsung. This includes the rectangular shape, the rounded corners, and the home button in the middle on the bottom of the phone.

What is significant to Microsoft about this case is that the Nokia Lumina does not follow this design pattern. The Nokia phone uses square edges with multiple navigation buttons and a curved face. To further depart from the iPhone layout, Microsoft Windows Phone uses a Metro interface with large interactive applets in place of the smaller icons used in the iPhone and Android. This interface is gaining praise from critics and Windows 8 is being seen as a positive move for Microsoft (Wingfield 2012). The relative benefits of the user interface of Windows 8 versus Android and iOS is not as important as the fact that this keeps Microsoft out of the conflict between Apple and Samsung. Regardless of who wins this lawsuit, Microsoft will have the opportunity to promote a user interface that is different than the interface of the litigating players. Apple is addressing the direct envelopment attack of of Android the same way they addressed Windows. If this can be resolved quickly, this may work in Apple’s favor. However, if this litigation drags on for five years like it did with Windows, Microsoft will have the opportunity to exploit their second mover advantage again.

Conclusions
My research into this paper has been evolving throughout the course. I was originally interested in exploring the subject of Incumbent and Challenger platforms. The Linux vs. Windows case study presents Windows as the Incumbent platform, and I hoped to find qualitative information to prove that it was in fact acting like a challenger. If you consider the historical connection between Unix and Linux, then that supports this claim. This lead me to compare the histories of AT&T with Unix and Microsoft with Windows. I found what I thought were some interesting parallels. Both companies managed their platforms as a proprietary platform with shared platform providers. Both companies encountered envelopment attacks that they successfully defeated, but their actions in defeating these attackers drew the attention of regulators. The attention of the regulators forced both companies to change their business practices and they both experienced a market decline. I saw what I thought was an interesting correlation between the Telecomm act of 1996 and the development of Linux. This correlation became weaker and weaker the more I researched. The Telecomm act of 1996 was significant to the inventors of Unix, but I concluded that it did not have any effect on Unix itself.

As I studied the histories of Unix, Linux, and Windows, I kept seeing Apple, and that changed the direction of my research again. This was also when we started studying the concepts of first mover disadvantages and second mover advantages in class. This added another dimension to my research.

I also started looking at the legal challenges that Apple and Microsoft have been using to defend against envelopment attacks. Apple has been the first mover and has had to rely on litigation to defend against envelopment attacks more. Apple employed this strategy against Microsoft with the GUI, and now it is employing the same strategy against Android phone makers.

I was ready to conclude that Microsoft was headed for trouble, and I wanted to compare that to how AT&T headed for trouble. I included some of this research in the appendixes because I found it interesting, but it was no longer the focus of this paper. The critical difference between Linux, Unix, and Windows is that Microsoft has been building its success on a second mover advantage. I think that this supports my original assertion that Linux and Unix are in-fact the incumbent platform and Windows is the challenger. Windows is dominant in the desktop environment, but they gained this dominance as the challenger employing a second mover advantage over Apple. The question I set out to answer was, ”Is Microsoft doomed to repeat with Windows the same mistakes AT&T made with Unix?” and I think I found my answer. Microsoft employed a second mover advantage to establish Windows as the dominant platform on the desktop, and they may be getting the same opportunity on the mobile phone and tablet platform too.

The current litigation between Apple and Samsung have some interesting parallels to the litigation between Apple and Microsoft. One area I would like to research further is how these patent and copyright laws are affecting the adoption of new technologies. It is clear that companies like Apple will use these laws to protect themselves against envelopment attacks, but it is not clear to me from my research that this is an effective defense. I think that this is an area for more research.

I was ready to count Microsoft out, but that changed with my research. As long as Microsoft is able to employ a second mover advantage, they will be competitive in the market. One possible explanation for Windows market decline after 2003 could be that when they became the leader, there was no more second mover advantage for them to use. This is another area where more research could be interesting. The question facing Microsoft today is in the mobile market. They have not been successful in this market yet, but they are moving in the right direction. It will be interesting to see how the litigation between Apple and Samsung is settled, and how Microsoft takes advantage of this.

Figures

Figure 1: Unix History
Source: Wikipedia, public domain image (http://en.wikipedia.org/wiki/File:Unix_history.svg)

Appendix:
The original focus of my research was to compare the parallel histories of AT&T and Microsoft. In the process I learned a lot of factors that helped support my assertion that Microsoft was following a parallel path that was laid out by AT&T, and that Microsoft was headed for a similar fate. This information is no longer important for the focus of the paper, but I still think it is interesting. I have included this information as appendixes, Appendix A: Other Parallels

There were a number of interesting parallels between Microsoft and AT&T’s histories. The Browser wars and the PBX wars
We’ve studied the Browser wars for years, but I was surprised to learn that AT&T found itself in its own technology war much earlier than the time we’ve been studying. The 1970s saw what was known as the PBX wars (Walsh 1983). AT&T was caught off guard by digital PBX (private branch exchange) manufacturers that were exploiting a new market.

Large Hardware Partners IBM and DEC

Microsoft and Bell Labs both had large hardware partners that indirectly drove the development of Unix and Windows. Microsoft famously partnered with IBM to create DOS and the two had been working together to develop OS/2. Microsoft and IBM encountered several corporate culture conflicts over the development of OS/2 and they split ways.

Bell Labs also had a contentious relationship with the hardware partner Digital Equipment Corporation (DEC). Much of the incentive to create Unix was to create a less expensive time sharing operating system for the DEC PDP-7.

Space Travel and Flight Simulator
A fun and interesting parallel is how Thompson and Gates pushed their platforms so that they could play games. Thompson was a fan of a game called Space Travel (Ritchie 1984) but the game cost $75 of CPU time to run on the big timeshare computers that were available then. Thompson rewrote Space

Travel to run on the PDP-7 running Unix so that he could indulge his amusement without spending a prohibitive amount of money.

Bill Gates similarly enjoyed flying but never obtained a pilot’s license (Cringely 1992). To indulge his amusement Microsoft developed Flight Simulator. Flight Simulator predates Windows by several years, but it eventually became a Windows Game. This allowed Microsoft to explore computer graphics in a way that were not being explored by DOS based applications. This helped promote network externalities like color displays and non-keyboard input devices. Without these externalities, Microsoft would not have been ready to promote Windows.

Viruses and Worms
Much has been made of the vulnerability of Windows to viruses, but Unix was famously exploited on November 2, 1988 by the first Internet Worm (Denning 1989). The Worm exploited weak default passwords in the standard Unix installation, replicated itself on an infected computer, and then copied itself to other networked computers with similar vulnerabilities. This is the same process used by many Windows viruses including the SQL Slammer.

Appendix B: What ever happened to AT&T?
To understand if Microsoft is headed in the same direction as AT&T, it is important to understand what happened to AT&T. The AT&T that exists today is very different than the AT&T that built Unix.

The Baby Bells got big
The breakup of AT&T created the RBOCs or Baby Bells. These RBOCs were Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell, and US West. These companies maintained their local monopolies because the Justice Department felt that local communities were well served by local monopolies, but more competition was needed in the more lucrative long distance sector. These companies did not stay static and the long distance sector turned out not to be the most profitable.

NYNEX was purchased by Bell Atlantic in 1997 and then merged with GTE in 2000. The new merged company was known as Verizon. Verizon continued purchasing companies that helped form the backbone of the internet. It purchased MCI in 2005. GTE had already acquired BBN in 1997. This brought together two of the driving forces that helped form the internet in the early days of the ARPANET.

Southwestern Bell changed its name to SBC and acquired BellSouth. The merger between BellSouth and SBC become known as Cingular. Cingular then purchased the remaining long distance assets of AT&T and became the new AT&T. This history is important to understand because the AT&T that exists today is not the AT&T that created Unix. The purpose of analyzing how the RBOCs became bigger than the parent AT&T is important to understanding if the same thing could happen to Microsoft.

Appendix C: Does Microsoft have any RBOCs?
We saw how the RBOC or Baby Bells took over ownership of AT&T. There have been several companies built or run by Microsoft alumni that could be considered Microsoft Baby Bells. There are several that have been successful enough to potentially take ownership of Microsoft in the future.

VMware was not built by a Microsoft alumni, but it is being run by Paul Maritz. VMware pioneered the Hypervisor platform and Microsoft countered this challenge by creating Hyper-V. VMware has already been purchased by EMC, so VMware will likely remain focused on its core business. VMware is not likely to grow big enough to take over Microsoft.

RealNetworks was built by former Microsoft employees and got into a major technology battle with Microsoft. RealNetworks RealPlayer was the defacto standard for streaming media until Microsoft embedded Windows Media Service with Windows 2000. This forced RealNetworks to reevaluate its business model and then create Rhapsody. Rhapsody has since been spun off into a separate company and RealNetworks is now focusing on developing new technologies.

SCO Group, formerly the Santa Cruz Operation, took over Xenix after Microsoft abandoned that platform. SCO did very well distributing Xenix for DEC minicomputers, but they did not make the transition to marketing Xenix to microcomputers in the mass market. SCO filed for bankruptcy in 2007 and was purchased by UnXis.

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