BUSINESS WEEK ONLINE / COURTTV ONLINE:  MICROSOFT ON TRIAL
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Profiles
 
 
NOV. 17, 1998 8pm ET
 
OS/2 vs. Windows, All Over Again
This time, IBM tries to blame Microsoft's tight control of software developers for OS/2's failure

Many of the top names in high tech -- Apple, Netscape, and Intel -- have taken the stand as government witnesses in the case against Microsoft. Today was IBM's turn. John Soyring, IBM's director of Network Computing Software Services, testified that Microsoft unfairly cut off competitors to its Windows operating system -- products such as IBM's OS/2 -- by pressuring software developers not to write applications for non-Windows operating systems. Microsoft countered by citing IBM's own marketing and development decisions for the downward spiral of OS/2, which now holds only a 6% market share.

Before Soyring took the stand, Justice warmed up the audience with another glimpse of the Gates tapes. In today's episode, Microsoft's chairman was cross-examined about what seemed to be threats against Big Blue for its support of Java, the Sun Microsystems programming language that can run on operating systems other than Windows.

Gates answered questions about an Oct. 30, 1997 E-mail he sent to senior executives Paul Maritz and Steve Ballmer about relations with IBM, which he said would never be as close as those with Compaq and other PC makers. Gates says in the E-mail that he would like to see IBM tone down its rhetoric on Java. "I could deal with this just fine if they weren't such rabid Java backers," Gates says. Although he refuses to answers why on tape, a Microsoft spokesman says the chairman was concerned that the product was being overhyped. The Justice Dept. contends, however, that Gates saw a successful Java as too attractive to software developers and wanted IBM to stop promoting it so heavily.

In the IBM testimony, Justice tried to show that Microsoft has consistently created barriers for competing software. In written testimony, Soyring, who was part of the development of OS/2, an operating system released by IBM in 1987, said Microsoft uses several ways to hamper the development of programs that can be used both on Windows and on competing operating systems. Specifically, Microsoft doesn't let developers who use tools it provides for writing Windows programs to also develop software for OS/2. And Microsoft doesn't let so-called redistributable code that it provides and that can be included in a developer's applications to be used when creating other applications, such as programs for OS/2, Sorying said.

"VICIOUS CIRCLE"? In effect, that meant fewer and fewer developers would write applications for OS/2 -- creating a "vicious circle" of decline for the IBM program, Soyring said. And, in an ironic twist, he added that Microsoft employed what computer industry rivals often accused IBM of using -- FUD, for fear, uncertainty, and doubt. An example of FUD is announcing a new product well before it's ready so that customers will stop buying competing products until the new product is out. Soyring said Microsoft began hyping Windows 95 as early as 1992 to head off OS/2, which then had some technical advantages over Windows.

In its cross-examination of Soyring, Microsoft tried to show that IBM itself was responsible for OS/2's lack of success. Microsoft said IBM pursued a strategy where it customized OS/2 for IBM PCs, rather than attempting to work with other PC makers to make the product more broadly popular. Microsoft also tried to show that OS/2 continued to get key applications, including software from Lotus and Adobe. Microsoft tried undermining IBM by showing that to remain competitive with Microsoft, Big Blue had cloned certain software used in Windows 95, rather than developing its own or licensing it.

Earlier in the day, Microsoft ended its questioning of the government's technical witness, Glenn Weadock, and Justice poured on testimony from companies including Gateway and Packard Bell to underscore the software consultant's point that many big companies didn't like the so-called bundling of Microsoft's Web browser and its operating system. Microsoft attempted to undermine Weadock, a sofware consultant based in Golden, Colo., by showing that he relied on a small number of interviews with corporations that had been chosen by Justice. Weadock's role in the case was to help prove Justice's point that companies want choice in the software -- including browsers -- they install on their computers.

Microsoft trotted out a smoking gun at the end of Weadock's testimony -- a fax the consultant had sent to Justice last November. In it, Weadock spoke of three ways that Microsoft's operating system and browser could be uninstalled. The method he felt was least practical was the one Justice asked the court to enact, when it sought an injunction last November against Microsoft's bundling of the OS and the browser. That injunction was denied.

By Heather Green in Washington

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1998


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