News and New Product Briefs (12/2/98)

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Maritz then made what could be considered a veiled threat pertaining to something that would certainly affect typical users: He noted that the Java license does not require that Microsoft continue to include Java in any of its products.

Economist testifies 'yes' on Microsoft monopoly

On Wednesday, November 18, 1998, the Justice Department enlisted the testimony (an 89-page report) of Frederick R. Warren-Boulton, the chief federal antitrust economist under the Reagan regime, to bolster its case against Microsoft.

Warren-Boulton testified that Microsoft has a monopoly in the desktop PC operating system market, and that maintenance of that monopoly (as well as the likely establishment of a new monopoly in Internet browsers, established through what he describes as "exclusionary" practices) would cost consumers.

He said, "Consumers will be significantly harmed if Microsoft succeeds in crushing the cross-platform threat that independent browsers pose to the Windows operating system monopoly. There is no guarantee, of course, that independent browsers will bring these benefits or reduce the monopoly power of Microsoft in the operating system market, even if Microsoft did not engage in exclusionary conduct. That is a matter for the market -- not monopolists or engineers or economists -- to decide."

Warren-Boulton added, "The important point is that the market should not be prevented by Microsoft's anticompetitive practices from making that decision." Warren-Boulton cited an IDC study that placed Microsoft's OS marketshare at 92 percent, and increasing, since 1991.

Warren-Boulton also noted that there are substantial barriers to market entry (one of the contentious points). He used testimony from IBM about OS/2 to demonstrate how difficult it is to break into that market.

Warren-Boulton also commented that Microsoft's integration of Internet Explorer with Windows 98 cannot be justified on the grounds that it is more efficient, since he claims they are two different products. He added that in his opinion Microsoft's decision to give the browser away for free (regardless of the cost to the company) constitutes "predatory" behavior.

A statement issued by Microsoft characterized Warren-Boulton's testimony as "clearly that of an ivory tower consultant with little or no direct experience in the day-to-day business and competitiveness of the US software industry." It continues: "It is well established as a matter of both law and economics that high market share does not necessarily establish the existence of monopoly power."

Microsoft is expected to call the testimony of economist Richard Schmalansee, the interim dean of the Sloan School of Management at MIT and a member of the Council of Economic Advisers during the Bush presidency.

(For expediency's sake, the judge has asked witnesses to submit direct testimony in written form.)

Novell, Cisco demo NDS Java agent

Novell recently demonstrated at Comdex Java-based agent technology designed to configure routers and switches that use Novell Directory Services (NDS). Such routers include those from Lucent, Nortel, and Cisco Systems.

This is the first time NDS technology has been applied to Cisco's network hardware; until now, Cisco had been supporting only the Microsoft Active Directory technology in NT/2000. It should work with all current routers and with Cisco's embedded network operating system. The agents are designed to allow administrators to set router/switch priorities by application, user, groups of users, and to configure them through NDS from a single console.

Cisco is going a step further by assuring that NDS and its Assure, User Registration and Tracking, and Network registrar products will seamlessly interoperate.

Judge grants injunction motion against Microsoft

On Tuesday, November 17, 1998, US District Court Judge Ronald Whyte granted Sun's motion for a preliminary injunction against Microsoft, which would cause Microsoft to make changes in Windows 98, Internet Explorer 4.0, and its Java toolkit products, SDK for Java 2.0 and 3.0, and Visual J++ 6.0.

Whyte's order found that Sun is likely to win the case based on its merit, and goes on to order Microsoft to change its products to include a version of Java that will pass Sun's compatibility test suite within 90 days. This is not the final word, but it does force Microsoft to alter the products during the remainder of the trial. The order does not require Microsoft to recall any products -- that would be a decision left for the trial. The judge also left the order open so Microsoft can extend the 90-day deadline if it can show just cause.

Java Software Division President Alan Baratz called this decision a "win for Java, for Java licensees, and for consumers."

Boeing employee testifies

On Tuesday, November 17, 1998, the Justice Department played excerpts of Boeing Windows Product Manager Scott Vesey's videotaped testimony to back up earlier testimony of Glenn Weadock, a computer consultant and author.

Weadock had argued that corporations want to choose the browser technology they use. He said, "Companies do want to be able to choose what sort of software they want to put on their machines." In fact, Boeing had decided to standardize on a version of Windows 95 that didn't include Internet Explorer.

Vesey testified that Boeing standardized on Netscape 2.02 because it ran across more platforms than Internet Explorer. He also said it provides a common user experience when viewing documents. "In the same way that we would want to be able to choose what graphics editor, or what HTML editing product, or what word processor we're using, we would want to be able to choose what Web browser we're using." An internal Boeing memo also quoted Vesey as commenting that Boeing did "not have a choice. Internet Explorer will be installed as a component of our next-generation desktop operating system."

Vesey also admitted that an integrated browser, such as IE, could deliver advantages.

On Monday, November 16, 1998, Microsoft attorney Robert Pepperman questioned witness Glenn Weadock, president of Independent Software, as to his qualifications as an expert witness. Weadock, who has authored several books in the IDG "Dummies" series (including Windows 98 Registry for Dummies), admitted that he had no programming experience and acknowledged that the 13 companies he interviewed before testifying could have had a bias.

Gates the comedian

On Monday, November 16, 1998, US District Court Judge Thomas Penfield Jackson got a chuckle from watching portions of Bill Gates's videotaped testimony, introduced by the Justice Department.

The excerpts were of questioning sessions with DOJ lead attorney David Boies. Boies was attempting to question the elusive Gates over the allegation that Microsoft was conducting a holy war against Netscape.

In short, Gates refused to concede that Microsoft focused its efforts on Netscape in a "jihad" over browser marketshare.

Boies introduced a January 5, 1996 e-mail from Gates to a subordinate that said, "Winning Internet browser share is a very, very important goal for us." Gates's counter: He didn't remember writing that specifically. Boies asked what companies Gates would include in the term "browser share." Gates's response: "There's no companies included in that."

Boies then asked, "Well, if you're winning browser share, that must mean that some other company is producing browsers and you're comparing your share of browsers with somebody else's share of browsers. Is that not so, sir?"

Gates's dodge: "You asked me if there are any companies included in that and now --- I'm very confused about what you're asking. It doesn't appear I'm talking about any other companies in that sentence."

When confronted with a document sent to him by VP Brad Chase that said, "We need to continue our jihad next year. Browser share needs to remain a key priority for our field and marketing efforts," Gates said, "It doesn't say Microsoft." Boies then asked, "Well, when it says 'we' there, do you understand that means something other than Microsoft sir?" Gates eluded, "It could mean Brad Chase's group."

And as for the definition of the word jihad, well Gates is no better at defining terms than President Clinton. His reply, "I think he is referring to our vigorous efforts to make a superior product and to market that product."

Several further exchanges involved Gates forgetting the question, and sometimes forgetting the meaning of common English words.

A sign of distress? Microsoft hires a legal spokesperson

After the laughable Gates deposition episode (see "Gates the comedian" in this section), Microsoft spokesperson Mark Murray called the replay of those sections of the deposition a government attempt to embarrass Gates.

Murray said, "Virtually none of that hour-long videotape had any relevance in this case. Mr Gates early in the segment said he viewed Netscape as a competitor. And that the company sought to improve its browser technology to compete head-to-head." He added, "The remainder of that tape was word games."

As to why Gates was being so evasive, Murray replied that Gates was being precise, and was "not going to allow the government to put words in his mouth."

And just to prove to the press that this deposition was not unusual, that the combative and evasive nature was typical, Microsoft hired former US Attorney Joseph di Genova, now a media legal pundit. His take, "A deposition is fundamentally a very ugly thing. This is not a work of art."

Sun demos Java chips at Comdex

Sun Microsystems, IBM, NEC, Fujitsu, and LG Semiconductor demonstrated the first ICs that contain Java bytecode burned into the silicon at Comdex.

Up for show were such consumer devices as set-top Web boxes, Web phones, and other handhelds, including a thin client, that all contain picoJava-core chips. The companies expect the first commercially available prototypes of the devices to hit the market early in 1999, to be followed by factory-floor versions (robot control, communication devices, specialized thin clients).

Siemens also announced plans to license the picoJava core to build a derivative chip to use in smart cards, due to Java's relatively large number of functions able to execute in such a small space.

Sun has no plans, beyond production of validation chips, to produce these chips.

Judge thinks Gates not "responsive"

After DOJ attorney David Boies showed the "confused" excerpts from Bill Gates videotaped deposition, US District Court Judge Thomas Penfield Jackson invited the lawyers into a closed-door session to comment on Gates' deposition. (For more on the deposition, see "Gates the comedian" in this section.)

Jackson said, "I think it's evident to every spectator that, for whatever reasons, in many respects Mr. Gates has not been particularly responsive to his deposition interrogation."

Microsoft lead attorney John Warden earlier complained about the Justice Department's tactics of playing several short segments of the deposition -- segments that show Gates' denying that he remembered writing or sending potentially damaging email and arguing over definitions of routine terms. Warden said that there was "no legitimate purpose vis-a-vis the trial in playing this deposition in bits and pieces," and that Boies had done this "for the purpose of creating news stories day after day after day."

Boies response was that Gates' deposition showed an "astonishing lack of recall limited to issues of critical relevance to this case."

In an Associated Press interview, Gates stood behind the truthfulness and accuracy in his answers to the prosecutor's questions, alleging that the disjointed design of the tape segments were "more about government PR than the substance of the case.''

Warden sought a motion to limit the play of the segment tape, but the judge denied it, saying, "If anything, I think the problem is with your witness, not with the way in which his testimony is being presented." (The DOJ attorneys have been showing portions of Gates' deposition before witnesses took the stand, presumably to compare and contrast Gates' testimony with that of the individual witnesses.)

MS sees Linux and Netscape as threats

In Microsoft attorney Michael Lacovara's cross-examination on Thursday, November 19, 1998, he attempted to counter the testimony of the government's expert witness and economist Frederick R. Warren-Boulton by showing that he was not in touch with the software industry. (For more on his testimony, see "Economist testifies 'yes' on Microsoft monopoly" in this section.)

Lacovara tested Warren-Boulton's knowledge of Linux. Warren-Boulton responded by describing Linux as an operating system generally used for server applications, to which Lacovara countered by citing Corel's recent Linux port of WordPerfect, as well as Red Hat's Linux applications. Lacovara said, "You haven't really looked into the evolution of Linux desktop products?"

Warren-Boulton replied by simply stating that Linux was not a constraint to Microsoft's monopoly. He answered, when asked, that even though the growth rate of Linux-equipped PCs had exploded in the last year, only a small number of PCs were shipping with Linux currently. The reason for the explosive growth rate was because the number of Linux-installed PCs was zero a year ago: "When you go from zero to a small number, the growth rate is high," he noted.

When Lacovara attempted to build a parallel case between Linux and Netscape, Warren-Boulton commented that he didn't know if he could have determined whether Netscape's browser was a threat to Microsoft's monopoly if asked that question in January 1995. And when Lacovara asked him to predict Linux's status six months or two years from now, he said it depended on financial market forces.

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