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Comes 5257-->1991 MS policies email. Page 2 worth a glance | 111 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Comes 5257-->1991 MS policies email. Page 2 worth a glance
Authored by: foulis on Friday, May 03 2013 @ 06:34 PM EDT
<p align=right><b>Plaintiff's
Exhibit<br><u><big>5257</big></u></b><br&
gt;Comes V. Microsoft</p>
From w-collin Tue Mar 26 10:22:17 1991<br>
To: jonl martyta w-clairl w-connib w-pamed<br>
Subject: Church vs. state text (LONG EMAIL)<br>
Cc: w-collin<br>
Date: Tue Mar 26 10:05:11 1991</p>
Microsoft's Applications and Systems Division: A Separation of
Necessity</p>
Microsoft has a policy of running its applications and systems divisions as
separate businesses. We have often used the phrase "church and state"
to indicate this idea: that while both groups share the same cultural
assumptions and corporate beliefs and certainly engage in a constant dialogue
and interchange of ideas -- the two groups also have a fundamentally different
missions. The charter of the applications group is to develop a world-class
family of applications on the major PC platforms: DOS/Windows, OS/2, and the
Macintosh. The charter of the systems group is to recruit a critical mass of
software developers for DOS/Windows and OS/2 to make those platforms a success.
This means wooing the support of outside parties, hardware and software vendors
alike and working with these parties in a fair and open manners. These are
compatible but not identical goals for Microsoft's two divisions.</p>
The policy is not a legal requirement, nor is it self-proclaimed righteousness
on the company's part, some kind of altruism with no further motivation than to
help "the industry." Microsoft states, for the record, that this
policy is nothing more and nothing less than a sensible and rational business
policy that generates large amounts of revenue for Microsoft and for other
companies in the industry. That is why the policy exists and why it will
continue. It is good sound, honest business.</p>
The systems group could, in fact, succeed by providing significant advantages to
the company's applications group and effectively "locking out" other
competitors. Then the applications group would get all, or most, of a small
business pie, for at least some period of time. In fifteen years of business,
Microsoft has rejected this approach. Its fundamental business strategy has
always been, and remains, the opposite. The company believes it will make much
more money by keeping its systems business open and growing a mass market - one
that is orders of magnitude larger than the world has known before - and having
its applications group share in this huge pie along with others.</p>
Microsoft has succeeded as a systems vendor because it recognizes the inherent
trap of proprietary solutions. Proprietary systems will work for some time, but
ultimately customers will desert them for platforms with many vendors. This has
happened repeatedly in the industry, and Microsoft sees no reason to repeat the
mistake. The most open platform in history - DOS/Windows on Intel hardware, with
hundreds of hardware vendors and thousands of software vendors - is the result
of a conscious business strategy.</p>
Thus, what is at issue is not whether Microsoft will be fair because it is the
right thing to do, but whether the company has an easier moral task - to show
enough common sense to keep executing a pragmatic business philosophy of
fairness</p>
<p align=right>MS 0155496<br>CONFIDENTIAL</p>
<hr>
<br>
that has been successful beyond anyone's wildest dreams, not only for Microsoft
but for all companies selling into a market of more than 60 million customers
and rising at 12 to 15 million per year.</p>
Systems Mission and Business Policies</p>
What Microsoft has said is that we do not seek competitive advantage for our
applications by hiding system capabilities from other applications vendors.
Microsoft's systems division has a number of goals to support independent
software developers (ISVs) in an open and honest manner, and a number of
specific programs to carry out the goals. In the broadest terms, the policies
are:<br>
<ul><li>Early disclosure of specifications of systems code to major
ISVs, and broad dissemination of technical data to the overall ISV community as
early as practical. This includes printed specifications, release of early
systems code, and technical review sessions with individual
companies.</li></p>
<li>Intensive work with major developers - including Microsoft's own
applications division - on systems specifications. Openness to input from all
ISVs about future technical directions and new product features. Such input has
been significant in the development of features for Windows 3.0, in the upcoming
Windows 3.1, in OLE, in Open Tools, and in Windows 32 among other systems
software.</li></p>
<li>Open, published specifications for systems products. No secret
"hooks" in systems products used by Microsoft applications products. *
(*footnote: Beta versions of systems software often contain private interfaces
for debugging purposes. There are also private interfaces within groups of
related system modules. These are not used by applications and often change from
version to version of the system product.)</li></p>
<li>Major programs to recruit, evangelize and support ISVs. These include
several major technical conferences each year, design reviews with individual
companies, joint marketing programs of various kinds, and MSU training
programs.</li></ul></p>
What requires Microsoft to continue these policies? Customer pressure - for the
systems division, this means software developers and hardware manufacturers. If
software developers cannot make a business case for supporting Microsoft
platforms, either because the market is too small, or because Microsoft plays
unfairly and therefore the business risk is too great, then those developers
will desert Microsoft platforms for the many competitive alternatives available
- alternatives that are languishing today because developers believe their best
opportunities are on Microsoft platforms. Microsoft might win in the short term,
but over time Microsoft platforms would be abandoned as just one more closed
solution.</p>
And, because Microsoft is not the leading software vendor in most categories -
including the major areas of word processing, spreadsheets, and networking - a
huge installed base of others people's customers make up the bulk of PC
purchasers. Consider the pressure that major hardware</p>
<p align=right>MS 0155497<br>CONFIDENTIAL</p>
<hr>
<br>
manufacturers could bring to bear on Microsoft if they became convinced that
Microsoft was closing its systems platform and costing them millions of
potential customers.</p>
Microsoft's systems division is under constant pressure from software and
hardware vendors to be fair, and under constant scrutiny for any hint that it is
not.</p>
[Do we need a section "proving" we're not taking advantage of the
situation? The following is a shot at this.]</p>
If We've Got An Advantage, We Sure Are Lousy at Exploiting It</p>
If any proof is required that Microsoft has not used its systems division for
the particular gain of its applications division, a simple reality-check is in
order:</p>
<ul><li>Microsoft is not the market leader in any of its overall
major application areas in which it competes. Its success has been in the
breadth and integration of its line, not on domination of a
category.</li></p>
<li>The only system for which Microsoft is the dominant supplier is on the
Macintosh, where Microsoft does not supply the underlying systems
software.</li></p>
<li>On the Mac and in other areas in which Microsoft is the leader -
notably, major application areas in international markets such as Germany and
France - it has nothing to do with systems code but with Microsoft's willingness
to take early risks when other companies held back. Microsoft developed Mac
applications when other PC vendors declined, and gambled on international
products two years before other American PC companies decided
to.</li></p>
<li>Microsoft was not the first company to release major Windows
applications, [detail on other companies/products]. In fact, until recently the
general industry view was that Microsoft was late in bringing its own products
to Windows.</li></p>
<li>Microsoft currently leads in the Windows segment (about 10 percent of
the overall PC market and rising) because its key competitors in spreadsheets
and word-processing declined to do Windows products despite significant
Microsoft evangelism; yet with both key competitors promising Windows products
in the next year, Microsoft leadership in these categories is in no way
guaranteed.</li></ul></p>
No Wall With Anyone, Not Even Ourselves</p>
A recent article on Microsoft referred to a "Chinese wall" between
Microsoft systems and applications; because the reporter's phrase was in quotes,
some people have assumed "Chinese wall" is a Microsoft term. The
company has not used it, and would never imply that its systems and applications
divisions do not communicate with each other. There is no wall between them.
They do have fundamentally different missions, and Microsoft's business strategy
is to keep them separate. Microsoft's situation is the opposite of the Great
Wall of China - instead of trying to keep anyone out, Microsoft tries to let
everyone in. Every ISV, including Microsoft's own applications group, gets
to</p>
<p align=right>MS 0155498<br>CONFIDENTIAL</p>
<hr>
<br>
provide feedback on design and testing of systems products. Several different
ISVs have provided code that has ended up in a variety of Microsoft systems
products; the only consideration is that the ISV be willing to let the
information become public.</p>
If the accusation, then, is that Microsoft systems division talks with the
applications division or exchanges ideas with its personnel, the plea in nolo
contendere - no contest. Microsoft has never pretended that the two divisions
never communicated, Obviously, they do. But the mission of the systems division
is to get as many applications available on Microsoft platforms at the earliest
possible time, and that mission compels the systems side to talk as often and as
earnestly with other ISVs as possible, and to provide them with early design
specifications, early code, and intensive technical support. The systems
division is competing with other major systems providers - the Macintosh,
various Unix solutions, DOS clones on the low end - and it cannot afford to
withhold information from the ISV community. It is business necessity that
compels Microsoft to treat its systems customers fairly, and nothing
else.</p>
Consider adding addendums or sections on:</p>
X. Stuff in Windows, OLE for example, from Microsoft applications group and
others.</p>
X1. Stuff in Windows 3.0/3.1 or OS/2 requested/developed by other
ISVs.</p>
X2. Stuff in Windows 3.0/3.1 or OS/2 from corporate developers.</p>
<p align=right>MS 0155499<br>CONFIDENTIAL</p>



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