This is a great article, copied from another thread.
Silicon Valley rivals decry Microsoft's tough tactics—yet many of them are guilty of the same thing.
Slay your rival
By Daniel Lyons
THE SECRET E-MAIL MEMO, revealed in court papers, urges lethal tactics: "We should ship our [product] without waiting for Netscape... They deserve to at least have this shotgun pointed at them."
But this E-mail wasn't written at Microsoft, and it didn't emerge in the U.S. antitrust suit against it. It came from a Netscape ally—Sun Microsystems Inc.—and arose in an unrelated lawsuit.
Now Sun has agreed to take a role in America Online Inc.'s plan to acquire Netscape for $4.2 billion, aiming to market Netscape software for its server business. Netscape, victim in the Microsoft trial, could all but disappear.
The "shotgun" E-mail underscores a fact of life in high tech: Everybody plays rough in Silicon Valley. They bundle weak products with bestsellers, give away freebies, bad-mouth rivals and use standards and alliances to favor friends and punish foes.
Those moves got Microsoft hauled into court, but rivals say they don't have to live by the same rules. "We don't have a monopoly. We're not on trial," says Gary Bloom, executive vice president at Oracle Corp.
That double standard rankles even some industry insiders. "Totally hypocritical," says T.J. Rodgers, president of chipmaker Cypress Semiconductor Corp. "Seeing these guys give up their free-market principles to get a short-term edge over Bill Gates—it's very disappointing."
It doesn't happen in other businesses? Yes, but not with the same élan. "I've never seen the kind of venom that gets vented here," says Michael Cusumano of MIT's Sloan School of Management, who has studied the auto industry and co-wrote a new book on Microsoft and Netscape, "Competing on Internet Time." He attributes the endemic nastiness to the frenetic pace of high tech and the high testosterone levels of its power players. "There are some really aggressive personalities."
Internal documents show Sun plotted to use its Java software to "attack the franchises" of Lotus, Novell and Oracle—even as it wooed them to support it. (Sun says it never followed through on the threat.) Sun also offers an operating system with a free Web browser, à la Microsoft. How can Sun do it? "We're not a monopoly," Sun's Lisa Poulson says.
Similarly, Netscape trashed Microsoft for giving away browser software—yet Netscape did the same thing, crushing a dozen or more tiny rivals. Netscape also bundled free groupware and E-mail products into its Navigator browser.
Apple Computer Inc. charged that Microsoft made changes in Windows that hurt Apple's QuickTime video software. Yet Apple created QuickTime to crush a rival product, MacroMedia, Inc.'s Director, says Director's creator, Marc Canter.
"Apple's whole story to customers was, 'You can get QuickTime for free, so why buy Director?' " Canter says. "All the things Microsoft is doing, they learned from Apple." Apple declines to comment.
Oracle, too, has been a vocal critic of Microsoft. "Oh, please. We've all experienced Microsoft's bully behavior—but Oracle plays dirty, too," says a manager at Sybase Inc.
When Oracle is at risk of losing a big contract, some critics say it retaliates by offering some software free of charge or slashing prices so sharply that competitors can't turn a profit. "It cuts off their oxygen," says Michael Stonebraker, chief technology officer at rival Informix Inc.
"Even if you don't get the deal, you at least make your competition lower the price so they can't make any profit. Oracle has widely used that tactic for the past ten years."
Oracle denies that assertion but confirms another: Last year it "warned" customers about Informix's DataBlades product, saying it had a feature that destroys data if used the wrong way.
"All we were doing is educating customers about other products in the market," says Oracle's Bloom. Stonebraker says Oracle exaggerated the risks to slow Informix's sales. "Their mudslinging has an impact."
IBM, no stranger to antitrust prosecution, testified against Microsoft—yet it offers freebies, too. Losing customers of its old E-mail program to Microsoft, IBM has a new offer that will let cc:Mail users upgrade to IBM's Lotus Notes, gratis. Previously they had to pay. IBM also leverages its presence in PCs to push software, bundling a free set of Lotus SmartSuite applications to preempt Microsoft wares.
When that doesn't work, IBM has a weapon Microsoft lacks: free hardware. To reward M&I Data Services in Brown Deer, Wis. for picking Lotus Notes over Microsoft Exchange, IBM let M&I have a snazzy four-processor mainframe for the price of a two-unit model, saving $500,000 on the $1.2 million setup.
Neither are Microsoft's accusers above a little collusion. Bring in da NOISE—for Netscape, Oracle, IBM, Sun and Everyone else. This alliance aims to topple Microsoft. "The entire industry must behave like a single focused competitor," IBM urged in a memo last summer.
In essence, all these bare-knuckled brawlers say that because Microsoft succeeded where they faltered, it must play by a more polite set of rules. Should they prevail, Microsoft will have to pull its punches while others can still fight dirty.
Even if they don't, might Microsoft's workers, wary of government scrutiny, ease up? Such concerns all but crippled IBM during the 13-year antitrust suit against it that was dropped in 1982. Microsoft says rivals hope for much the same here.
"That's totally their strategy. It's very cynical," Jeff Raikes, group vice president at Microsoft, says of the antagonists. The risk that Microsoft might lose its genetic tendency toward rough play prompted a recent E-mail from President Steve Ballmer to his 27,000 employees, urging them to keep up the pressure.
Few in Silicon Valley see any chance that Microsoft will suddenly turn into a powderpuff. Still, in a market where ruthless tactics are standard procedure, even a flinch could be costly, maybe fatal.
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