Monopolists and interoperability?

Here's an economist's take on Microsoft's new file formats. From the article: `While Microsoft could have kept the traditional ``.doc'' as its default format for MS Word, this would not have served its purpose: eventually, after enough of the world pays for Office 2007, holdouts will be dragged along, kicking and screaming. Then, in four or five years, Microsoft will begin our agony all over again.'

I'm not sure I understand what this means. After all, wouldn't it be in Microsoft's best interests as a monopolist to have everyone use its own established file formats? Why introduce new ones and create confusion in the marketplace? A later paragraph makes things a bit clearer: `So, by creating incompatibilities, some subtle and some obvious, that make its old software obsolete, Microsoft can sell its operating systems at high profit margins without fear that people will wait until the price drops. The price will never drop, because Microsoft will just roll out a new system, again at high profit margins.'

Of course, he's trying to find a purely economic explanation for Microsoft's new file formats, which is fine but it's not the whole picture. There's a growing movement in the world today that's pushing towards office document formats which are open and XML-based, to make it easier to process them and extract information from them. I myself hit on a similar idea--of serving XML-based Word documents ready-made in response to users' queries--a couple of years ago while doing time (my internship in a bank :-).

Anyway, Microsoft can't be left behind with its older, closed file formats, plus it too sees how useful XML-based formats can be, so it develops XML versions of its formats. The problem with that is there is already a growing XML-based office document standard--Open Document Format. Microsoft wants its own standard--it says ODF can't support all the features of Microsoft Office.

It's kind of sad reading about the kind of troubles ordinary, non-technical people have been going through adjusting to the new Office, file formats, and Vista: `The first person at my company to use Vista was our Executive Vice-President. He was furious. Vista and Office 2007 came with his new Dell computer by default. Dell didn't ask: ``Would you prefer the old versions of the operating system and MS Office that you know how to use?'' So our VP got a shiny new computer that he didn't know how to use: functions were rearranged, and keyboard shortcuts were different.' Especially because we have something like OpenOffice.org, which offers a familiar interface and the ODF standard file formats, for free.