Tuesday, January 29, 2013

Technology's advancement requires competition.

I'm 100% in favor of a company starting out small with an innovative idea and then expanding. If this happens in a way so that little competition happens for the innovative company it's something magical to behold. Everyone benefits from competition however.

Without competition a company can set prices to whatever they want. If an innovative company has a new product and no other companies step up to compete, it could be because other companies lack funding, the knowledge, or they may see no benefit in competing at all (for a product they do not believe will be successful).

More and more in this day and age companies aren't getting ahead because they have more superior products or because the people buying the products have a heightened sense of brand awareness, but rather because a company benefits from information or services illegally or they pay other companies not to use the competition.

When a person knowingly supports a company that has ill-gotten gains, this helps and endorses the company to keep doing what they were doing. By having an unfair advantage a company can put all competition out of business and then set prices to control a market. If the item in question is technology, they can control all prices globally. Also without competition, technological advancement is in the hands of the only company left standing. If the company decides not to advance because it's not in the best financial interest of shareholders, then the results could be detrimental to a product line, a piece of technology, even society itself (just think if one company controlled the water supply... see Wikipedia for Water Privatization).

AMD Advanced Micro Devices and why you should not buy Nvidia or Intel (at the moment)
Many companies benefit when they hire a disgruntled employee from a competitor. They receive inside knowledge of the inner workings of the competition. They also benefit from any project the employee might have had knowledge about, not to a degree that the company can copy the technology entirely or beat the original company to a patent (unethical), but they can prepare for the competing technology, software, or product to be on the market and find ways to innovate and compete ethically and legally. This is the reason that companies have employees hire a non-compete and also clauses that state that anything you work on during employment with the company is the property of the company done as "work for hire." I myself feel non-compete clauses should be illegal themselves, but in most cases a company will be hard pressed to keep an ex-employee from obtaining gainful employment in their field of expertise. Work for hire is something that should be allowed if the company is funding the research, but if the company can show no receipts for the time the employee came up with the idea, then it should belong to the employee.

Sometimes however companies don't receive information legally, but instead pay recruiters to tempt employees of the competition into selling inside information before the employees have left the company. Insider theft and espionage not only cost companies billions, it can put a company out of business and even hurt everyone involved.

AMD Advanced Micro Devices stock values 1/28/2013.

Two cases have come to light in the past years involving AMD and unfair practices against their business. In a lawsuit filed 1/14/2013 - AMD vs. Feldstein, Desai, Kociuk, and Hagen - AMD is seeking damages and injunctions against the 4 people involved who allegedly sold inside information and collected data from the AMD database to AMD's main competitor in the graphics card market, NVidia. If only one person had sold the information to NVidia, or attempted to sell the information, then there might be the case that NVidia had nothing to do with the case and the person selling the information might have been opportunistic. Since four people sold information, it looks more like NVidia might be paying these people (and recruiting) information for ill-gotten gains.

The second case that comes to mind is an Antitrust issue between Intel and AMD. There was a "complaint" filed for NY vs. Intel where they go into detail about Intel suggesting to their clients that they stop using AMD chips. In the EU there was an Antitrust case filed against Intel in 2009 where the courts ruled in favor of payment to AMD. Intel's counter "Intel takes strong exception to this decision. We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace..."

In short, No, it is not innovative to pay off the market and keep companies from purchasing from your competitors products.

Is it okay to buy anything Apple branded?
While I definitely like the road Apple has taken with their machines recently in terms of speed, I give second, third, and even tenth thoughts to buying Apple products. Apple has become a company that ignores human rights when it comes to building their portable devices. Another reason is that Apple exclusively uses Intel chips in their machines and do not allow installation of their operating system on any other platform (including AMD). From Apple's EULA for Snow Leopard:

"You agree not to install, use or run the Apple Software on any non-Apple-branded computer, or to enable others to do so."

When companies (Psystar and PearC) selling hardware of their own branding with the Mac OS operating system installed were sued by Apple, the supreme court found that the use of the Apple Operating System on Non-Apple hardware was a violation of the DCMA. Meaning it's illegal. This makes me wonder if the Librarian at the Library of Congress has received any compensation for helping Apple to become a monopoly in this regard since the Library of Congress controls the DCMA (Digital Copyright Millenium Act). Because of this I have only purchased low-end Macs for checking email, but maintain an AMD 12-core server as my primary workstation.

No comments:

Post a Comment

I'm going to read this before it goes live if you don't mind.