Oligopoly
An oligopoly is a market that is dominated by a few firms. In an oligopoly, the market is hard to enter due to existing technologies or resources that are needed in order to enter the industry. Since there are only so many large technology produces in the technology market, Microsoft is an oligopoly in many different parts of the market. For example Microsoft can be considered in an oligopoly with apple since they are the only two companies that produce operating systems used by most people. Also, since Microsoft has been in the home computer business since the beginning, it has expert knowledge over what it is producing. This characteristic of perfect knowledge is a trait of a firm in an oligopoly market. Due to CNNmoney, Microsoft is ranked number one in the computer software company next to Oracle and Symantec. If Microsoft did not have expert knowledge on creating software, this company would not be at the top. Also, in an oligopoly there is much interdependence between the firms. When Microsoft almost dominated the software market, a case was brought up named US vs. Microsoft. In this case it was argued that Microsoft was to doment are influential in the software industry. Just like an oligopoly, all of the top firms in the software market have products that are different. For example, Microsoft produces operating systems and programs like excel and word. Oracle produces a programming language platform called java and Symantec produces anti-virus programs like Norton. Because of this great differentiation between products, these firms can be price setters rather than price takers.
http://money.cnn.com/magazines/fortune/fortune500/2012/industries/189/
http://money.cnn.com/magazines/fortune/fortune500/2012/industries/189/