JUSTICE VS. MICROSOFT: THE CASE OF THE MISSING PC MAKERS businessweek.com
I have to direct this one back to the ever polite rudedog, though it applies more to a message in the other thread, where we were discussing Compaq vs. Microsoft in the sacred icon war. rudedog wrote:
As far as the "They have to ship the machines the way we build them" quote, this is the famous 'windows experience' requirement. CPQ told them to pound salt. Buy a CPQ machine and check it out. When you power up, the first screen is a big CPQ splash screen, and the next is a CPQ screen with a variety of options, some of which lead to the standard MSFT stuff. Likewise, Dell, GTW, HP and others have now gone more to this model, after CPQ lead the way. Netscape installation is a choice on all but the Dell machines. ( from siliconinvestor.com
That may be the current situation, but as I replied at the time, I didn't think Compaq told Microsoft to "pound salt" until after it got some cover from the antitrust action. Or, until Microsoft backed off, again due more to antitrust than to Compaq's leverage. Anyway, back to the Business Week article:
But just when they need computer execs to come forward with stories to bolster their case, the feds aren't getting much cooperation. Justice's witness list for the upcoming trial, released on Sept. 4, contains a cross-section of high-tech corporate icons. But conspicuously absent are the most obvious victims of alleged Microsoft coercion--PC makers who are the most important vehicle for Microsoft products to consumers. Microsoft's efforts to prevent manufacturers from shipping rival products have been a cornerstone of the antitrust action against Microsoft, but the only PC maker to take the stand--Compaq Computer Corp. (CPQ)--is testifying for Microsoft. ''That's the big hole,'' says Rich Gray, an antitrust attorney with Bergeson, Eliopoulos, Grady & Gray in San Jose, Calif.
So does that mean the Justice case is weak--or that PC manufacturers have no complaints? Not necessarily. Some industry insiders contend it is the very power Justice seeks to curb that has left it without certain key witnesses. ''Nobody in the PC business wants to be near this,'' says one former PC company CEO. What it means, adds Gray, is that ''they couldn't find anyone brave enough to come forward and risk the wrath of Microsoft.''
Even giant Compaq is careful not to offend. A source close to the No.1 PC maker says that two years ago Microsoft pressured it to undo a deal with America Online Inc. (AOL) that would have featured AOL's opening screen before Windows. Microsoft threatened, and Compaq backed down, the Compaq source says. Then, Compaq marketing execs argued that a fight with Microsoft was not worth it. The PC maker has also attested in depositions to Justice that Microsoft applied pressure when Compaq attempted to put Netscape Communications Corp.'s (NSCP) Web browser on its desktop with Windows. Now, however, Compaq is on Microsoft's witness list and not Justice's.
CROSSFIRE. Privately, government officials confirm that because Justice could offer no real protection, PC makers were reluctant. No company wanted to be singled out, and attempts to band together fizzled. In May, Compaq, Gateway (GTW), Hewlett-Packard (HWP), Sony (SNE), and Packard Bell had scheduled a meeting with Justice. One by one, they dropped out, each concluding that the group was not big enough to protect against retaliation. The meeting was canceled.
I don't know, I think I'm back to my original interpretation on this. Compaq may be the biggest OEM, but near as I can tell, they learned a lesson, when Bill says "jump" the correct answer is "How High". They were happy to go back to the situation that existed before the "integrity and uniformity" requirement was imposed, but they couldn't do that until Microsoft gave permission. And there's no guarantee that that permission will remain in place. Here's a bit of NYT coverage from May, when the Sherman suit was filed. Recall that there were last minute negotiations, initiated when Microsoft offered new "flexibility".
Little more than an hour after the Friday talks began, the two sides encountered a major obstacle, which indicated that a negotiated settlement was out of reach.
The issue under discussion was the control of what appears on a PC user's main screen, often generically called "the desktop." Today, Microsoft exercises a powerful control over that main screen because its Windows operating system is installed on more than 90 percent of new personal computer's sold. An operating system is the software equivalent of the computer's central nervous system.
Microsoft allows PC makers to put some other software on top of Windows, but the company, through its contracts with PC makers, firmly controls the essential look and consumer experience of the Windows desktop.
Government officials said that it was an expressed willingness by Microsoft to negotiate the issue of the desktop -- sometimes called the "first screen" -- that encouraged the Justice Department to invite the company to Washington for talks Friday. (from nytimes.com )
Again, Microsoft may be willing to give OEMs this new "flexibility" for now, under antitrust pressure. But it wasn't willing to commit to that legally. I guess in this case, they're just supposed to "trust Microsoft". As Dirty Harry would say, there's just one question the OEMs should ask themselves: Do they feel lucky? As far as the outcome of the current suit goes, apparently not.
Cheers, Dan. |
