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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: J Fieb who wrote (41045)	5/14/1999 9:44:00 AM
From: J Fieb	Read Replies (1) \| Respond to of 50808

upside.com Microsoft's Tangled Web Inside Upside May 13, 1999 Craig Mundie is senior vice president, consumer strategy at Microsoft Corp. Upside Today was in Seattle on May 6, the day the deal with AT&T was announced, to talk with Mundie about other matters. We took the opportunity to ask him for some perspective on what the deal means. Mundie: One of the first focuses of my group was on interactive television. Our expanded relationship with AT&T is all around interactive television. The fact is that AT&T is expanding the use of our software, not only by unit count but in terms of the range and depth of the products that we've got. We're very pleased about that. Upside Today: Does this primarily involve settop boxes? Mundie: Settops are the primary devices that the cable industry focuses on and that was the centerpiece of the relationship that was expanded this morning. But of course, AT&T shares our vision that you really want to provide an integrated set of services, so it doesn't matter if you're on a cable line or a wireless connection or what have you. Armstrong pointed out this [deal with Media One] will give them cable access to 25 percent to 35 percent of American households. But AT&T wants to service everybody. So they'll use other means than cable and other devices than settops to ultimately try to have a relationship with those customers. Microsoft has a similar objective. We want to sell our technology to people who make devices and to people who use devices, in as many categories as possible. Upside Today: Will you also play a role in DSL Internet connections with AT&T? Mundie: To the extent that AT&T did anything with DSL, we'd be happy to help provision that. The settop box area is the focal point. AT&T is using not only Windows CE technology, but our Web TV technologies and our Windows NT and Back Office technologies, in order to provide more of an end-to-end solution for their television environments. Their interest extends to video, voice and data services. We've been involved for some time with AT&T and other companies in provisioning IT telephony. We provide some technology to @Home. Through the Media One acquisition, [AT&T has] acquired an operational interest in Road Runner, an alternative to @Home. Microsoft is very involved with Road Runner as a major technology provider to that service. And of course, those things all end up providing data services to PCs. We will find a number of ways to work with AT&T, [but] not directly, as a result of today's announcement, because we've already been making investments around these spaces for quite some period of time. Today what we announced was a fairly broad relationship between the companies to accelerate broadband services, broadly defined, into the consumer homes in America. We made an equity investment in AT&T to help cement that relationship. We actually have agreed we would buy some of the Media One assets they said they wanted to divest--in this case, the TeleWest activities. As part of this, we announced they are expanding and accelerating the deployment of their advanced settop box-based services to include more purchases of the base CE operating system, which is an extension of the agreement we already had. We had a 5 million-unit commitment from two years ago, and that's been progressing quite nicely. In fact, it's been our success in doing our part of that job that has been the basis of expanding this relationship. We will not only up the number of units to the range of 7.5 [million] to 10 million units, but for the first time, they also said they will be buying both client and server software to actually provision the services--interactive television, electronic mail--and yet-to-come applications. That wasn't part of our relationship in the past. So set tops are a major focus of the AT&T deals. MSFT wants WindowsCE on MediaOne. CUBE, you better get that AViA to do windows!