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June 5, 1998 -- If Bill Gates hadn't dropped out of Harvard University, Microsoft Corp. might have avoided the antitrust problems it's facing today, Scott McNealy, Sun Microsystems' chairman and president, told reporters during a recent visit to Caracas, Venezuela.
"You see, Bill Gates dropped out of Harvard. I finished. So I learned what a monopoly is. Apparently, it would have helped (Gates) to stay a couple of extra years and learn the definition of monopoly. We were there at the same time. He would have heard the same classes, had he stuck with it," McNealy said. "My mistake, obviously, (is) he got a head start on me."
Had Microsoft's chairman and chief executive officer stayed in school, he would have learned why monopolistic practices that limit customer choice -- like predatory pricing, bundling, and exclusionary contracts -- are illegal, McNealy said.
"There is no question Microsoft is a monopoly. That is not debatable. The first chapter of an Economics 101 (textbook) will tell you that 95 percent marketshare is a monopoly. It's indisputable," McNealy added.
Microsoft, he said, is the only company in the world that thinks that compatibility and cross-platform interoperability are bad for its customers. "And I haven't met a customer who said 'I hate when my computers talk to each other,'" McNealy said.
He also explained that Sun is suing Microsoft for the same reasons that Coca-Cola Co. would sue a bottler that put three drops of poison in every Coke bottle they made: breach of contract.
"If Coca-Cola were to make you an authorized bottler, they would say you must ship Coca-Cola with the following formula and put the proper logo on it. Well, what Microsoft did was to use part of the Java formula and put three drops of poison in it. When you mix Java and poison, you get Windows," he said.
Sun argues that Microsoft has a Windows virtual machine, not a Java virtual machine, so Microsoft can't use the Java logo on its virtual machine.
"If you want to write an application using Java code, you don't need a license. There are a million programmers out there using Java who haven't paid us a penny and we haven't sued them," McNealy said.
Sun does charge a license fee to those people who want to build a platform -- be it an operating system, a browser, a consumer electronics product or a phone -- that will run Java applications, and demands certain requirements and responsibilities of them. Microsoft violated their licensing agreement, McNealy said.
McNealy also predicted that five years from now, most people will be amazed they ever owned a PC. The need for full-fledged PCs with lots of local storage will continue to decrease as phone companies and other service providers begin hosting data for users in their servers, according to McNealy. Already, there are companies that provide this service, he said.
"It's like in the old days -- everybody had an answering machine at home. Now, most people use a centralized phone answering environment managed by the phone company," McNealy said.