The Internet Has Been Good to Microsoft Office
Standards, and corresponding monopolies, can occur naturally
Believe it or not, there are times when I feel some empathy for Microsoft. After all, I myself was once a small-time monopolist.
My first company, Astrogamma, had a product called FENICS that provided foreign exchange (FX) options pricing and risk management functions for traders. FX options are a particular kind of financial contract that banks and corporations trade as a way of taking bets on the fluctuations in the exchange rates between currencies or to protect themselves from those fluctuations (if you want a full primer in FX options, feel free to write me :) ).
The important thing for this discussion is that trading FX options turned out to be much, much easier if the traders on both sides of the transaction were using the same software. Our system caught on initially because of our focus on the user experience, our aggressive pricing, and the fact that we were able to seed our product into the brokerage houses (who were important market influencers) early on. But once we started to see widespread adoption of our software, the FX options market started to realize the benefits of having everyone use a standard system, which in turn drove further sales of our product until we had cornered over 80% of the global market of banks, brokerage houses, and large corporations that traded actively in FX options. We became, in effect, a monopoly. There was nothing nefarious about it. We didn