Below are four articles from the Washington Post this past week
which convey significant information about trends in information
technology, and as it happens, the role of Microsoft.

Jamal

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 11/16/97 -- Copyright (C) 1997 The Washington Post [Article 298624, 113 lines]

                       Rivals Unite To Combat Microsoft
            Five Companies Plan Common `Platform' For the Internet
                             By Elizabeth Corcoran
                         Washington Post Staff Writer

      Microsoft Corp. is facing an unusual alliance of five powerful companies
that are working together on new technologies that could topple the software
giant from its perch atop the high-tech world.
      The five competitors -- International Business Machines Corp., Netscape
Communications Corp., Novell Corp., Oracle Corp. and Sun Microsystems Corp. --
have been driven together by two forces: a cold fear of Microsoft's continued
hegemony and a shared vision of a new Internet-based "platform" that would be
open to all. To plan strategy, executives of the five companies said they and
their colleagues have been meeting, sometimes as often as weekly, to share
ideas and technology.
     The collaboration has gone on quietly for months but is being discussed
more widely now, at a time when Microsoft's business practices are coming
under attack from both the Justice Department and longtime consumer advocate
Ralph Nader. The government last month charged that Microsoft is using the
dominance of its Windows software to boost its share of the market for
Internet-browsing software. And this past week, Nader led a two-day conference
in which competitors and critics railed about Microsoft's business practices.
   Such an alliance -- spearheaded by the five prominent companies but also
drawing support from others in the industry -- might once have raised
antitrust issues of its own, according to lawyers familiar with the business.
     "Every time you get competitors together in a room, it makes antitrust
lawyers very, very nervous," said Mark A. Lemley, a professor at the
University of Texas School of Law in Austin. But, he said, "there's an
increasing recognition in antitrust scholarship and law that sometimes
cooperative arrangements among competitors is a good thing," particularly if
the companies let others use the standards they jointly develop.
     The vision shared by Microsoft's challengers is simple: The new
cornerstone of the information age should be the Internet, which is
essentially a collection of standards owned by no single company. The old
stand-alone PC, with its Microsoft software and Intel chips, should gradually
give way to newer, cheaper alternatives connected to the Net.
     To make this happen, the executives are throwing their efforts into three
new areas of technology -- a computer language known as Java, which was
developed by Sun for writing software that can be transmitted easily on
networks and run on any computing device; a low-cost kind of computer known as
an NC, or network computer, being pushed by Oracle and other companies; and a
programming technique known as Corba for building Lego-like blocks of software.
    This cooperation in building a common platform "is a lot more like a
single company's efforts," said Jon Kannegaard, a vice president at JavaSoft,
a division of Sun. "We put someone in charge and define pretty carefully what
we're going to do." In some cases, engineers from different companies are
meeting on a weekly basis to hash out technical issues.
      "There's a very strong incentive for us to push as hard and as fast as
possible toward a world where operating systems are commoditized, chips are
commoditized, and the Net becomes the platform," said Marc Andreessen, chief
technology officer at Netscape Communications in Mountain View, Calif. "We all
see an opportunity to make a tremendous amount of money as that world unfolds
-- as opposed to world where everything is Microsoft and Intel. That's the big
issue for all of these companies."
     Microsoft Chairman Bill Gates said that by working together, his
competitors "end up creating a fairly powerful message that we have to be
aware of."
     "That's an intense competition at a level beyond what we've seen in the
past," he said at his company's annual shareholders meeting on Friday.
     The alternative technologies are a few years old. What's unusual is that
the five headstrong corporations are cooperating so intensely. "It's rare that
there's an opportunity where there's an alignment of interests that lasts for
more than a minute and a half," said Andreessen.
     But this time, they are working so closely together that "I could give a
speech at any of the companies [involved] and pass myself off as a member of
their executive committee," said Eric Schmidt, chief executive of Novell.
     "We see IBM playing with folks we've competed with down to the mat," said
Patricia Sueltz, vice president of Internet software at IBM. "We've all
realized that part of our lifeblood is making sure that we . . . have
standards."
     The battle between Microsoft and its five adversaries essentially focuses
on who should set those standards, and how open they should be.
     In the current, Microsoft-dominated world of desktop computers, the
underlying operating system translates commands into a language that the
machine can understand. Companies that want to build applications -- say,
spreadsheets or games -- have to make their programs fit tightly with the
operating system, like pieces of a puzzle.
     The alternative vision is of a world where the Internet, with its open
standards, can function easily with any type of operating system or hardware.
In this open environment, new programs will work everywhere. Much as different
brands of telephones work when plugged into the telephone network, "we've got
to be able to connect everywhere," Sueltz said.
     IBM, she said, profited handsomely in the past by pushing its own,
proprietary systems. "But like a reformed smoker . . . we've become
evangelical" about setting common standards, she said.
  Executives at the five companies say their engineers are working together on
specific projects in way that has never occurred before. The issues are
"extremely specific and are supported by an emotional and technical agreement
at the executive level," Schmidt said.
     Even so, there's no guarantee that such an unusual partnership will
succeed. For starters, past efforts to build an open platform have failed to
capture the market. An open operating system called UNIX, while common in
large, powerful workstations, splintered into many different versions and thus
lacked Microsoft's market power.
     The five companies in the partnership must also contend with Microsoft's
own plans for the future.
     Microsoft has pumped tremendous energy -- $2 billion and hundreds of
thousands of programmers' hours -- into making its Windows family of operating
systems the very best platforms for building applications. They are selling an
orderly, predictable world. Programs work. People know whom to call when
something breaks.
     Microsoft wants to extend that dominance into the 21st century, with new
Windows products that embrace new technologies: a planned Windows98 version
for the PC that will offer a seamless electronic desktop that combines the
operating system with an Internet browser; Windows CE, which will drive
smaller computers such as WebTV and hand-held devices; and Windows NT for
servers and other large computers.
     The rival companies say they're eager for all comers to use their new,
Internet-based platform -- even Microsoft.
      "We've invited Microsoft to participate in everything we've done but by
and large they've declined," Kannegaard said. "They don't share the vision.
What can I tell you? We're not ganging up on Microsoft -- they've chosen not
to come to the party."

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 11/18/97 -- Copyright (C) 1997 The Washington Post [Article 298817, 83 lines]

                        Small and `Dumb' Have Their Day
         At Comdex Trade Show, Interest Focuses on Hand-Held Devices,
                         Bare-Bones Network Computers
                               By Mark Leibovich
                         Washington Post Staff Writer

     Think of it as dumping "gee-whiz computing" for "grass-roots computing."
At this year's Comdex, the high-tech industry's Super Bowl of trade shows,
computers that are small, portable and simple have emerged as the stars.
     "Comdex used to be about companies trying to out-dazzle and out-cool each
other with their technology," said James Gonzalez, a Los Angeles software
developer who has attended the show most years since it began as a modest,
4,000-person gathering in 1979.
     But this year, above the din of multimedia demonstrations spread across
2,100 exhibit booths and an expected 200,000 visitors, the buzz is centering
on two relatively cheap and limited-application computing genres: the
hand-held, or pocket-size, system and the stripped-down, network-based version
of the personal computer.
     Hand-helds have a checkered history dating to the 1993 release of Apple
Computer Inc.'s Newton, a pen-based computer that to date has failed to
attract a significant following.
     But the hand-held market has found new vitality of late, largely through
the huge success of the Palm Pilot, a seven-ounce digital datebook, which
sells in different models for $249 and $369. It controls about 66 percent of
the market, according to Dataquest Inc., a San Jose-based market research firm.
     "This is a different computing paradigm," said Liz Brooking, director of
marketing communications for Palm Computing Inc., a division of 3Com Corp.,
which acquired the Palm Pilot's former maker, U.S. Robotics Inc., in June.
     The Palm Pilot is intended to complement the personal computer, said
Brooking, not replace it; it is designed with specific tasks in mind, such as
personal scheduling, e-mail and, in a new version developed with Motorola,
paging.
     Based on the big crowds around 3Com's Palm Computing exhibit, and a
five-deep line for demonstrations just minutes after the floor opened today,
the Palm Pilot has scored an early Comdex "mind-share" victory.
     "What we're seeing is sort of a fashion statement about computing,"
Brooking said. But just as fashion trends inevitably spawn imitation, Palm
Pilot has numerous competitors across the floor. Never to be outdone,
Microsoft Corp., which a year ago unveiled Windows CE, operating system
software for portables, recently released a 2.0 version of CE in an effort to
gain what has been an elusive market for the company.
       Several large PC makers -- including Compaq Computer Corp., Sharp Corp.
and Hewlett-Packard Co. -- now make paperback-size Windows CE machines, which
analysts say account for close to 20 percent of the portable market.
     "Even though consumers have rejected a series of hand-held versions in
the past, it's clear that they are craving smaller devices," said Cheryl
Currid, a technology analyst at Currid & Co. in Austin.
     Less certain is how consumers will respond to the advent of network
computers -- bare-bones PC boxes that don't have hard drives, instead storing
data on a centralized network.
      Known by some convention-goers as "dumb boxes," they have been
championed for close to two years -- most loudly by Oracle Corp. Chief
Executive Lawrence Ellison -- as a cheaper, easier-to-use alternative to a PC
market dominated by Microsoft software and Intel Corp. microprocessors.
      Finally, after much hype and a series of delays, this year's Comdex
offered the first opportunity to sample numerous network-based machines by a
variety of PC makers, from giant International Business Machines Corp., which
is gearing its systems to business clients, to smaller outfits such as
Mountain View, Calif.-based NCD Inc.
      Impressions were mixed. American Eagle Airlines, which six months ago
began using IBM "Network Stations" to process reservations and exhibited its
application at IBM's booth, said it expected to save $4.5 million in
maintenance costs over the next year.
     But conference-goer James McDonald, a Seattle-based software consultant,
said he would never trust his personal computing to a network-based machine.
      "The beauty of personal computing is control," McDonald said as he
surveyed NCD's hollow gray machines called "Thin Clients." When you give up
your hard drive, he said, you're at the mercy of numerous unpredictable
network factors. Another compromise, he fears, is privacy.
     Likewise, some analysts say the network computing phenomenon has lost
some of its luster with the sharp decrease in the price of PCs. Tim Bajarin,
president of Creative Strategies Consulting of San Jose, said he expects 40
percent of all retail PC sales this holiday season to be in the $1,000 range
-- just a few hundred dollars more than what most network-based machines cost.
     Also competing for the low-end customer is WebTV, a comparatively simple
box that connects people to the Internet via their TV sets. It's on display at
several halls around the show, amid breathless predictions from its developers
that it's bound for mass-market glory.
     McDonald said he tends to take Comdex buzz with a big grain of salt. In
the lightning-fast world of the computing industry, trends can last as long as
it takes for a crowd to disperse on the floor. "The market will decide," said
McDonald, a veteran of four Comdexes.
     "And next year we'll probably all be talking about something else."

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 11/21/97 -- Copyright (C) 1997 The Washington Post [Article 299000, 103 lines]

                             Software's Hard-Liner
              Microsoft's Gates Bristles at Monopoly Accusations
                             By Elizabeth Corcoran
                         Washington Post Staff Writer

     Bill Gates slouches on the sofa in his office and listens intently to the
question. There is silence. His brow furrows. He fidgets, he rocks. He scowls.
     "That's the most . . ." He catches himself, but according to a colleague
he was about to utter the classic Gates put-down: "That's the most random
thing I've ever heard."
     Gates, chairman of Microsoft Corp., may be one of the most powerful men
in the world. But he's not a contented chief executive. In a wide-ranging
interview at the company's Redmond corporate headquarters last week, Gates
railed against those who see Microsoft as anything but the guys in the white
hats.
     There are plenty of targets for Gates's anger these days. The Justice
Department is hauling his company into court. Ralph Nader, longtime
representative for consumers, is badgering Microsoft about its dominance of
the software market. His competitors in Silicon Valley continue to vex him,
like stinging no-see-ums. And in each case, Gates takes their gripes against
the company personally.
      "If you had to pick a part of the economy [about which you] could say,
hey, this part is working well, you'd have to pick software and the way
software prices have come down,"   Gates said, rocking back and forth on his
office sofa. "Name another place where the prices keep coming down while the
products improve. Just look at the amount of R&D you get for your software
dollar now versus three years ago, six years ago, nine years ago. It's wild."
      Gates was unwilling to discuss the Justice Department's complaints
directly in the hour-long interview, which had been arranged long before the
government's complaints. What came through, however, was his frustration. Why,
after all that Microsoft has done to help unleash the power of personal
computers, is his company under fire?
      "What is the most pro-competitive thing that's ever happened in the
economy?" he demanded. "Personal computers connected to the Internet, by far."
And Microsoft has helped that happen, Gates said. And if his competitors don't
like it, he suggested, then they should fight him in the marketplace. "It
turns out that in capitalism, firms actually pick what products they do and
what features to put in those products without the government helping them to
decide how to do that," he said.
      Since Gates and high school buddy Paul Allen founded Microsoft in 1975,
it has grown into one of the most influential companies in the world. More
than 12,000 people work at Microsoft's sprawling Redmond campus, scattered
throughout about three dozen buildings; the company has 22,000 employees
worldwide. Microsoft's string of 22 consecutive years of profits has swelled
Gates's own fortune to more than $35 billion.
     As computers do things as varied as delivering local news and managing
the lights in people's homes, Microsoft has found an entry to a great swath of
industries: interactive television, airline reservations and, in the future,
even real estate. Revenue for fiscal 1997 was $11.36 billion.
     But to Gates, Microsoft is still a feisty start-up, poised to do battle
against legions of giants. "The culture of this company is that it feels like
the competition is always on its tail," said Mike Murray, vice president for
human resources and administration. "Most of us refuse to admit we have size"
and market clout, he said. "We want to be [like] a small company."
      That attitude starts at the top. The key to Microsoft's success is no
secret, Gates asserted: "It's because we're focused on software. That's why
we're successful. Was there a software industry before we came along? No. Did
it make any sense that a company could independently write an operating system
when we did it? No. . . . And do we [still] think that there's quite a variety
of software that's useful to write? Yes."
     Last month, the Justice Department took legal action against Microsoft,
contending it has violated the terms of a 1995 consent decree by using its
market clout in operating-system software to boost the acceptance of its
Internet "browser" software. Microsoft has countered that it's simply
improving its products and giving consumers more value for their money.
     The two sides are scheduled to appear before a federal court judge Dec.
5.
     To Gates, Microsoft's mission is to remain a software company and to keep
improving its core product, the Windows operating system, by adding new
features such as the Internet browser. Every time it has done so, competitors
have complained. But that's the price of progress, he suggested. Remember when
Microsoft's operating system didn't use graphics? "Now you could say, why
don't I freeze the operating system and not ever put a graphical interface in?
Wouldn't that be more fun for the competitors?" Gates said. "And, yes, if the
goal is -- at the cost of innovation -- to help competitors, yes, there's lots
of ways to rig the game."
      Economists worry about monopolies for a simple reason. When a company
has a lock on a market, it usually turns lazy and complacent. Eventually, the
monopolist introduces fewer innovations and raises prices, largely because it
doesn't worry that such changes will cost it many customers.
      By that measure, Gates thunders, how can anyone imagine that Microsoft
is a monopolist?
      "Why do we keep the price of Windows as low as we do?" Gates asked
rhetorically. "If . . . an economist thought, `Oh, this is a product without
competition,' and computed what the price would be, they'd get a number five
to 10 times higher than what it actually is."
      "Because it is a competitive area," he answered, sounding like an Econ
101 professor lecturing a not-so-bright class. Referring to the concept of
"network economies," which suggests that once a product is used by a certain
number of people everyone else will feel compelled to use it as well, Gates
said: "Those phenomena were not assigned to Microsoft. They're just available
to any product that gets out there. So we're going to keep improving the
operating system."
      His competitors see it differently. At Nader's conference last week in
Washington, Scott McNealy, chief executive of Sun Microsystems Inc., contended
that the spreading influence of Microsoft's family of operating systems winds
up meaning there's less choice for consumers.
      Gates dismisses such criticisms. "Why don't I raise the price of
Windows? Are you really telling me I'm dumb?" Gates asked. Why not raise
prices? "Because it's competitive, in the long run Windows would be wiped out.
That's why. I'm either a bad businessperson or I'm right about the fact that
there's lots of competition that could wipe out Windows. Those are the only
two choices you have."

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 11/21/97 -- Copyright (C) 1997 The Washington Post [Article 299017, 60 lines]

                    Justice Dept. Counters Microsoft Claims
                            By Rajiv Chandrasekaran
                         Washington Post Staff Writer

     Firing back at Microsoft Corp., the Justice Department said yesterday
that the software giant is trying to "rewrite . . . history" by claiming that
it long intended for its Internet browsing software to be integrated with its
popular Windows 95 computer operating software.
     The department, which last month asked that Microsoft be held in contempt
of court for violating a 1995 agreement with the government, also urged the
federal judge deciding the matter to quickly issue a decision.
     Microsoft has said it wants a drawn-out proceeding, a request Justice
said yesterday would "work to Microsoft's commercial advantage and harm
consumers."
     The department has accused Microsoft of forcing its Internet Explorer
browser upon personal computer makers as a condition of getting Windows. The
department contends they are two separate products and Microsoft should not
use the market dominance of Windows to help sales of another product.
Microsoft claims the two products are integrated and should be distributed
together.
     In more than 200 pages of documents filed last night in U.S. District
Court here, the department's antitrust division sought to rebut Microsoft's
chief defense, namely that Microsoft has always viewed Windows and Internet
Explorer as a combined product.
     The department presented a June 1994 electronic mail memorandum from a
Microsoft executive discussing the development of Windows 95 that stated: "We
do not currently plan on [including] any other client software, especially
something like Mosaic." Mosaic was an early type of browser software that
Microsoft licensed in January 1995.
     The department also cited e-mail between two top executives in December
1996 that called Internet Explorer "just an add-on to Windows." The author of
the message, Jim Allchin, suggested that Microsoft should "leverage" its
Windows 95 market power to help Internet Explorer overtake rivals,
specifically Netscape Communications Corp.
     "Microsoft seeks to rewrite this history -- to disavow everything it has
told millions of consumers -- by attempting to characterize Internet Explorer
as an `integrated' component of Windows 95, rather than a separate product,"
the department wrote in its legal brief.
      "Internet Explorer was designed and intended to be released as a
separate application product, after the release of Windows 95, to work along
with or in conjunction with Windows 95. Consistent with this plan, Microsoft
did not distribute Internet Explorer with the version of Windows 95 initially
released for retail purchase."
     Microsoft officials were not immediately available for comment last night.
     In its court filing, the company called Justice's request for a contempt
ruling a "perverse" interference that will block the advance of computer
technology and hurt consumers. Microsoft also accused regulators of "taking
sides" with its competitors in an effort to prevent improvements in Windows.
     Microsoft contends that it planned to incorporate browsing technology
into Windows 95 as early as 1993 and that Justice knew of those plans when the
1995 agreement was signed.
  "The government was fully aware of Microsoft's plans to integrate into
Windows 95 oodles and oodles of features and functionality," William H.
Neukom, Microsoft's senior vice president for law and corporate affairs, said
at a news conference last week.
     In an interview last week, Neukom added that the company wants
"unfettered discretion" about what technologies it can integrate into Windows.
     U.S. District Judge Thomas Penfield Jackson will hold a hearing into the
matter on Dec. 5. Justice officials refused to comment publicly about their
filing last night.

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