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To: Lizzie Tudor who wrote (21815)	11/28/1998 10:49:00 AM
From: rudedog	Read Replies (1) \| Respond to of 24154

Michelle - BTW I believe rudedog also thinks highly of msft but wonders about the practices of the OEM team, correct? Absolutely right. In the many years that I have worked with MSFT they have grown from a loose confederation of hackers into a relatively well-organized large software organization without losing many of the cultural highlights which I admired when the company was small. I agree with those who say that MSFT has not been particularly innovative, that has not been their model. Despite what the senior MSFT executives say in public. in private they would also agree. One can hardly expect them to get in front of a public forum and say 'yea, it's true that we don't really try to innovate, we pretty much look at what is winning in the market place and then go like hell to make a similar product, or we just buy the technology that's already winning, it makes us a lot more money and it's way easier'. But as a shareholder of MSFT I am glad that they take that approach. Although I don't look to MSFT for deep innovation, I do expect that they should help foster an environment where such innovation can take place. Several of the senior people at MSFT understand this - Maritz in particular has argued for the need for MSFT to 'incubate' small software companies in some way, arguing that this is the least expensive research investment that MSFT can make. Ballmer has talked about this also, pointing out that if MSFT takes all of the downstream revenue opportunity from these small startups, they will have little incentive to design for MSFT. Ballmer has been a strong internal supporter of almost every program to help small software vendors grow and make money. Kempin is another story. His goals are simple - he owns the OEM business and he wants that business to be as profitable as possible. No one has ever accused him of having any strategic vision. As far as I can tell he is almost single-handedly responsible for the general negative perception of MSFT business practices among the OEMs. I have heard from various mid-level MSFT people that Ballmer and Kempin have had long-standing disagreements on this issue, but no senior MSFT executive has ever talked about this with me. But the mid-level people, who have been with MSFT for a long time, have given a pretty consistent story. They tell me that Ballmer and Kempin don't get along at all, to the point where Kempin and Ballmer don't even show up at the same meetings, even though Kempin nominally works for Ballmer. They also tell me that the product side guys, notably Maritz and Allchin, have argued for a long time that Kempin's policies are bad long-term strategy. I have been developing the hypothesis that these people are using the current DOJ fracas as an opportunity to highlight Kempin's shortcomings, not just in the court of public opinion but also with Gates, who has always supported Kempin. I will be watching the testimony of the key MSFT executives closely, with the working assumption that the product side guys will push Kempin out on a limb and cut it off, if they can. If this happens, it will be a very good thing for MSFT IMO. No matter what happens MSFT will have to change their OEM practices but I would be much happier if this came from inside the company, using the DOJ action as a pivot, rather than having it enforced externally.