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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Cory Gault who wrote (12203)	11/13/1998 12:40:00 AM
From: ToySoldier	Respond to of 74651

Hi folks!!! With friends like Microsoft, do OEMs needs enemies? By Mary Jo Foley, Sm@rt Reseller November 12, 1998 9:32 AM PT Whether you've found the DOJ antitrust trial to date more compelling than Oprah or a real snoozer, things are about to get really interesting. Among the next few witnesses slated to be called first by the DOJ and later by Microsoft are individuals with inside knowledge of Microsoft's deals with its OEMs (original equipment manufacturers), a.k.a., hardware vendors. The DOJ is slated to summon before the end of the year IBM network computing executive and former leader of the OS/2 OEM program, John Soyring. And Microsoft will bring up its head of OEM sales and marketing Joachim Kempin, as well as other executives who are expected to detail the particulars of the licensing terms that Microsoft has managed to exact from IBM and other OEMs. (It's worth noting that both Soyring and Kempin were key players in the antitrust investigation which resulted in the 1995 Consent Decree forged between the government and Microsoft.) Microsoft continues to claim that the current DOJ suit is little more than a last-ditch attempt by its software competitors to derail the Microsoft marketing machine. In the face of this repeated rhetoric, it's easy for forget that complaints by OEMs of Microsoft's alleged bullying practices are truly at the heart of this case. OEMs aren't railing merely against Microsoft's OS license price hikes which soon will result in operating systems becoming by far and away the most expensive component of a PC. OEMs also have complained about Microsoft's marketing tactics, such as Microsoft's steadfast refusal to allow OEMs to modify first-boot screens, Active Desktop channels or other pieces of software real estate. In the coming weeks, the DOJ will make public a number of new exhibits which consist of email, deposition excerpts and copies of Windows and Internet Explorer licensing contracts it collected from these OEMs. But until the DOJ makes this OEM-related evidence public, these OEM complaints will continue to be seen as little more than vague charges brought by primarily nameless, faceless individuals. OEMs have been quite reticent to speak out against the OS kingpin, and after the past couple of weeks, it's easy to see why. Apple was the first OEM to take the stand in this antitrust case. Senior vice president Avie Tevanian's testimony regarding the shadier side of Microsoft's dealings with Apple left plenty of trial watchers scratching their heads, wondering where Apple's relationship with Microsoft will go from here -- regardless of how much damage-control Gates' close personal friend Steve Jobs can manage to do. Tevanian wasn't the first OEM executive cut down by Microsoft. Earlier this year, an Acer exec who had decided to retire from the industry levied charges that Microsoft had engaged in foul play to nix a deal between Lotus Development Corp. and Acer in a potential OEM partnership involving SmartSuite. At that time, Microsoft officials -- not to mention whistle blower Ricardo Correra's former boss -- attempted to question Correra's credibility by calling him a disgruntled employee. Sound familiar? Isn't that how Microsoft officials attempted to discredit the testimony of Intel vice president Steven McGeady this past week? McGeady's boss even allegedly joined in the bashing, one can only presume, to attempt to salvage Intel's ties with Microsoft. OEMs live and die by Microsoft's sword -- or at least the pen that signs the licensing deals. And Microsoft seemingly knows how to wield its weapon, as nearly one-third of Microsoft's $14.5 billion in revenues in fiscal 1998 was attributable directly to its operating-system license deals with its OEMs. Are OEMs just a bunch of whiners? Or do you believe some of the OEM complaints are serious enough to merit remedies? Talk back below and let me know.