By William Fellows
It’s going to come as no surprise to anyone that the testimonies of nine Microsoft Corp executives in its defense against antitrust charges by the US government and 19 states will focus on demonstrating that the competitive nature of the IT industry means no company, including Microsoft has a guaranteed position. Microsoft VP platforms and architecture Paul Maritz is the first of the nine to take the stand, and today will testify that the industry is characterized by dramatic shifts known as inflection point during which some companies will stumble and others enter the market and grow rapidly. Maritz says Microsoft has survived two – the GUI and shift to 32-bits – while two others, the internet and arrival of information appliances, are underway. He goes on to argue that Windows faces competition from many sources including Linux, Unix, Mac, Java, Netscape, even though the company’s own key witness, economics professor Richard Schmalensee declared that OEMs currently have no other viable choice but Windows. The decision not to charge separately for Internet Explorer, Maritz testifies is a reflection of the competitive nature of the software industry. It is in any case a set of enhancements to Windows, Maritz argues, not a separate product at all. He says Microsoft makes $3bn annually from Windows 98 sales and that to recover its annual investment of some $100m in IE it needs to license 3.5% more units of Windows 98 than would have been the case if it had not added IE to the operating system. IE will pay for itself many times over in that case, he argues, hardly meeting the government’s charge of below cost pricing. Moreover he says, in giving away IE Microsoft is only doing what the much of the industry – IBM, Sun, Apple, Novell – has done; making web browsing available at no extra cost. Maritz addresses Microsoft’s alleged coercing of Intel Corp to drop its native signal processing (NSP) development by arguing that Intel itself came to understand that releasing it would be bad for Intel because it was designed only to run on Windows 3.1, not on the forthcoming Windows 95 or the existing Windows NT platform. Maritz says Intel’s Steve McGeady’s testimony that Microsoft threatened to delay support for Intel’s new MMX technology in 1995 is untrue. On Microsoft’s cajoling of Intel not to support Java: there is no doubt in my mind that Sun regards Java technology as a way to take customers away from both Intel and Microsoft… thus in Microsoft’s view it did not make business sense for Intel to support Sun’s plan regarding Java, and we communicated this view to Intel. More recently the testimony says Intel executives have told Microsoft that they share out concern that Sun’s rhetoric about the cross-platform nature of Java is merely a smokescreen to mask Sun’s efforts to advantage Sun’s own products.
