MS's Netscape envy
revealed
By Alex Lash
October 23, 1997, 6:25 p.m. PT
In making its antitrust case against Microsoft
(MSFT) a matter of public record, the Justice
Department has released
internal Microsoft documents
that confirm what everyone has
known for some time: The
software giant quickly and
aggressively turned its focus to browser rival
Netscape Communications (NSCP) and the
budding Java movement in the months after CEO
Bill Gates warned his executives that the company
was in danger of losing in the Internet game.
Gates's now-famous "Internet tidal wave" memo
went out in May 1995. By early 1996, Netscape
was squarely in Microsoft's sights, and Redmond
was wielding Internet Explorer as its weapon of
choice.
In February 1996, Microsoft group vice president
Paul Maritz distributed a detailed strategic analysis
of the Internet browser space. Slides obtained by
the Justice Department show that the company had
already drawn a bead on Netscape and frankly
assessed the fledging company's strengths and
weaknesses.
In Maritz's estimation, Netscape was doing
"excellent work" on browsers, but only fair to
middling work on its servers. Its aggressiveness,
flexibility, and obsession with matching and beating
Microsoft--as well as its significant lead in browser
market share--were listed as reasons to worry, the
documents show.
The assessments also size up key Netscape
personnel: "[Jim] Clark, [James] Barksdale, [John]
Doer [sic]--know how to work 'system'; [Marc]
Andreessen--giving good direction on browser;
[Eric] Hahn [Collabra] will drive good workgroup
direction; [Richard] Schell, [James] Sha--good
technical managers."
The evaluations have proved prescient, especially
concerning Hahn, who had just joined Netscape
after it bought his company, Collabra Software.
Two weeks ago, Hahn was named chief technology
officer and has indeed helped the company make
major steps in shifting its revenue base to servers
and groupware products, as evidenced by its latest
earnings report.
In April '96, Brad Chase, now a Microsoft vice
president in the application and Internet client
group, sent out a fiscal year '97 plan entitled,
"Winning the Internet platform battle." Chase
outlined the areas of confrontation in establishing
browser share; his stated goal by end of the fiscal
year was a 35 percent share in the United States.
Included in the battle plan were massive public
relations campaigns, developer partnerships for the
adoption of ActiveX, and licensing agreements with
original equipment makers and Internet service
providers. "You should be able to break most of
Netscape's licensing deals and return them to our
advantage because our browsers are free," Chase
wrote.
"Netscape is already entrenched in our markets all
over the world," he added. "The situation today is
scary. We have not taken the lead over Netscape
in any market yet."
U.S. District Judge Thomas Jackson's upcoming
decision will largely be based on his interpretation
of the consent decree phrase "integrated product,"
as he decides if Internet Explorer is separate from
Windows or a component of it. Jackson will likely
inspect the internal Microsoft documents for
instances of those key words.
For example, at one point in his "Internet battle"
missive, Chase refers to IE as a "no-revenue
product," but he also specifically refers to
integration plans: "The integration of the browser
into the Windows shell makes it very easy for users
to use the Net."
Microsoft made some conciliatory public statements
about Java during that time period and announced
at its December 1995 Internet strategy day that it
would license the programming language from Sun
Microsystems. But in Maritz's February 1996
document, it's clear that the company immediately
saw Java--and Netscape's adoption of it--as a
threat to the Windows franchise.
In a slide that lists reasons why browser share is
important, Maritz made the following points:
"[Web] pages become applications."
"Netscape/Java is using the browser to create a
'virtual operating system.'"
"Windows will become devalued, eventually
replaceable?"
He went on to assess Microsoft's weaknesses,
including the fact that the company had "no control
over Java." The first item listed under "product
strategy" reads, "Catch Netscape 2.0, neutralize
Java." To do so, Maritz proposed using IE 3.0 and
its ActiveX component architecture, as well as the
Java support and tools the company would produce
in the coming months. "Java cannot be an advantage
for Netscape," he wrote.
Netscape at that stage was developing its own
version of Java-class libraries because the graphics
capability of Sun's version was considered too
basic. The two companies averted a Java
fragmentation by merging their versions earlier this
year into the Java Foundation Classes (JFCs).
Microsoft, meanwhile, has pressed ahead with its
own version, called Application Foundation Classes
(AFCs).
Sun alleged in its recent lawsuit against Microsoft
that Microsoft has altered core Java libraries it had
licensed in order to trick developers into creating
Windows-only Java programs. The lawsuit,
however, has nothing to do with the AFC-JFC
split. |
