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Thursday, 22 June, 2000, 14:24 GMT 15:24 UK
Microsoft answers your questions
The computer software giant Microsoft is currently fighting tooth and nail to prevent the break-up of the company ordered by a US judge two weeks ago.
Judge Thomas Penfield Jackson ruled that Microsoft was abusing its monopoly powers in the software market. As a remedy, he decreed that Microsoft should be broken into two separate companies, one to market the ubiquitous Windows operating system, the other to provide the software programmes that run on Windows.
Microsoft claims this is an unfair and drastic ruling that will ultimately affect the millions of people around the world who use and trust Microsoft products. They have appealed, and the legal process continues.
Microsoft's head of corporate marketing in the UK, Shaun Orpen, answered questions from BBC News Online readers about the court case, the future for Microsoft and the impact this long process has had on the company.
Dominic Hayzelden, London, UK: Would Microsoft be able to avoid a break up if the company relocated to a different country e.g. Canada? And if the company did relocate would the United Kingdom be a strong contender?
Shaun Orpen: Although we are grateful for all of the expressions of support we have received from people inside Canada, this country and in other countries, Microsoft has no plans to relocate its HQ.
Microsoft is confident that the current ruling will be overturned through the appeals process. At the end of the legal day we believe that the American legal system will rule in our favour and recognize that Microsoft's actions have been procompetitive and brought tremendous benefits for consumers and the entire high tech industry.
Andy Murdoch, Edinburgh, UK: How do you think the current legal action will affect Microsoft's long term behaviour even assuming an appeal win?
Shaun Orpen: Whatever the legal outcome, it is clear that some people have had some concerns over the way Microsoft conducts its business. We need to learn from this and do a better job at communicating with our customers, partners and the industry about our plans and actions to avoid misunderstandings.
Indeed, we have already voluntarily made some changes to the marketing contracts we have with some of our partners. The terms of these contracts were standard for our industry - however people could choose to misconstrue some of the intentions - hence we volunteered to make these changes.
We genuinely do not believe we have broken the law. We have been highly competitive - which is the name of the game in our industry - but this is very different from doing something illegal.
Ben Tullis, Norwich, UK: We are unquestionably entering a new age of computing with the availability of technologies such as Bluetooth, WAP, Broadband access for all etc. Could you possibly outline for me, some sectors of the market which Microsoft will definitely NOT be targeting with all its might.
Shaun Orpen: This is hard. The rise of the Internet and the development of information appliances, intelligent TVs and small handheld devices mean the computer industry will look very different tomorrow. Any company that fails to innovate - including Microsoft -- will quickly be surpassed by other, more innovative companies.
Just look at what's happened in the last few months: AOL and Netscape are merging and forming an alliance with Sun, @Home is buying Excite for $6 billion, and Java and Linux are "hot." These are all examples of how quickly the technology industry changes. Microsoft will continue to research and develop cutting edge technologies and make investments where it makes business sense.
Fundamentally, MS is in the software business - we have a vision for enhancing the experience we all have as users of the internet. The world I have highlighted above means that we believe people will access the internet from a range of devices, in many aspects of our lives - at home, at work, in the street - wherever.
Lewis Westbury, Essex, UK: Why does the flagship operating system product of such a large, multinational, hi-tech company like Microsoft, keep falling over?
Shaun Orpen: I spend a lot of time listening to MS customers and they have been very enthusiastic about our operating system. The feedback we are getting on Windows 2000 is just very contrary to your view. It really does deliver on the customers' needs for a highly reliable and scalable operating system.
Don't just take this from me - if you read the reviews in PC Magazine, Computer Weekly, IT Week and Network News over the past year and a half, from people who have put as much stress-testing into the product as developers at Microsoft, they agree that the Professional (desktop) version of the product is hugely reliable, as is Windows 2000 Server. Added to this the cost of ownership of the systems to a business and the total solution provides incredible reliability at an exceptionally good cost.
With financial institutions, like Nomura, Credit Suisse First Boston, Abbey National, manufacturing companies, like Mitsubishi in the UK, utilities companies, like Enron, and healthcare companies, like PPP/Columbia healthcare, all running their solutions on Windows 2000, they expect and receive total reliability from their Windows 2000 solutions. This is why Microsoft Windows 2000 has sold more in the first three months of release than Windows NT Server 4.0 did in its first year of release.
Gary Grayson, Ipswich, UK: If the company is forced to split, what will be the role of Bill Gates. Will he be tempted retire? Looking ahead even further, what will happen to Microsoft when he does retire naturally?
Shaun Orpen: Microsoft remains confident that it will not be split up and that it will prevail through the appeals process. Bill has made it very clear that he intends to stay with Microsoft for a long time to come.
His current role is Chairman and Chief Software Architect - that enables him to focus 100% on developing great software. Steve Ballmer is Chief Executive Officer and President of Microsoft therefore the business of running the company is his responsibility. Working together, Bill and Steve are an incredible combination of technological vision and strategic execution.
We are incredibly fortunate to have Bill focus 100% of his time on helping Microsoft deliver against the vision I outlined earlier. This will be an incredible challenge for Microsoft and will need us to bring all our research and development efforts together to make this a reality
Yonatan Godefa, USA: Wouldn't the consumer be hurt if Microsoft split?
Shaun Orpen: Any break-up of Microsoft would impose enormous harm on consumers, by creating incompatible versions of software and fragmenting a platform that has served software developers and consumers extremely well.
A recent study conducted by Association for Competitive Technology projected that such a breakup would increase software costs to consumers by $30 billion in the first three years. Judge Jackson's ruling would make it extremely difficult to add new features to Windows and would fragment the standard platform that has been so valuable for consumers and software developers. Consumers would get fewer new products, more slowly and at higher prices. They would be confused by dozens of versions of Windows, all called Windows, but which may or may not work properly with Windows applications.
Two years ago, a similar ruling from this same District Court was overturned by the Court of Appeals for a simple reason consumers benefit most when software companies have the freedom to innovate new features and new technologies. Yes a split would hurt consumers but we don't believe that that will be the final outcome.
Bolingbroke, Switzerland: Does Microsoft acknowledge that it has broken US Anti-trust laws? What measures are Microsoft prepared to take to ensure that such infractions never re-occur?
Shaun Orpen: We believe that whichever court considers our case on appeal they will find that Microsoft's actions have been lawful and to the benefit of consumers. Both procedurally and substantively we anticipate that the appeals process will overturn the lower courts ruling. It is not at all uncommon for appeals courts to reverse district court decisions, particularly in complex anti-trust cases.
The court's legal conclusions are contrary to the long held precedents of the antitrust laws. This ruling marks the first time ever, a product design was found to violate the antitrust laws, even though the court found that Microsoft's product design does provide consumer benefit.
At the end of the day this case is not in anyone's best interest - not MS, not the govt, not the consumer. We have worked really hard to find a way to settle this. However, at the end of the day - we need to be able to improve our products on behalf of the customer.
Matthew, London, UK: I have been unable to buy a PC without a Microsoft operating system pre-installed. How can Microsoft say it is not abusing its monopoly position when from the majority of PC's vendors do not give any other option?
Shaun Orpen: I would suggest that the reason why the majority of PC manufacturers sell Windows with their PC's is that I) there are the more applications available for this platform than others today and 2) We have continued to improve the product and it sells on its merits as a product and finally 3) because customers ask for it.
The reality is that there are other operating systems out there - indeed some are free of charge. If we are competing against free software that should say something about just how competitive this market really is.
Sarah Sarre, Guernsey: How do you believe that the proposed break-up would affect your Windows package and to what extent if any would it slow down or halt any current designing on new products?
Shaun Orpen: The right to be able to create, produce and deliver products in response to consumer demand, the right to be able to innovate - these are incredibly important principles and Microsoft is defending those principles. They are important not just for us as a company, they are critical to the whole technology industry.
I'm confident about the outcome of this case in Microsoft's favour. Whilst this case progresses to the next stage, our legal team remain focused on the US appellate process - that could continue for months to come, possibly even years. For the great majority of us, it is business as usual - we are fully committed to producing great products that improve peoples' lives.
Microsoft is announcing its strategy for the future which is really exciting! Fifteen years ago, we committed ourselves to bringing the graphical user interface (GUI) to the PC through the Windows platform. We now have the opportunity to help create a totally new user experience -- the Internet User Experience -- that is every bit as important as GUI. It is about creating compelling, intimate, seamless and automatic connections for and between consumers, businesses and developers -- any time, any place and on any device. To bring this to fruition is going to need us to bring together all our research and development efforts in a really focused way.
Anonymous, Belgium: Is there any advantage that Microsoft can gain from the proposed split? For instance, would the proposed two companies combined have more value than the single company before split?
Shaun Orpen: As I think I've already answered - a split would prove detrimental not only to Microsoft but it would also harm consumers. This sort of speculation is of little real value. Microsoft has a great future as a single company - that's the way we want to keep it and we believe that ultimately the American judicial system will decide to keep it that way too.
Manoj B, Toronto Canada: Why doesn't Microsoft open up the source code to its programs if it is committed to innovation in the industry?
Shaun Orpen: The reason why so many customers choose Windows is that they can buy a single platform, in multiple languages across the world. If you compare this to the Unix world that has multiple different flavours, this creates huge challenges and costs for customer and developers in terms of creating, developing and supporting applications for multiple versions of the same operating system.
We get a very clear message from customers and developers that supports the benefit of a single platform, available in multiple languages.
That said, Microsoft already has source code licensing for specific engineering, research and educational purposes and we're always looking at new ways to meet customer and partner needs: However "Open Source" has many meanings in the IT industry, and there are many alternatives. OSS is not a panacea. It has pluses and minuses for the customer and the marketplace - Jamie Zawinski was one of the key people at Netscape to start the mozilla.org - he resigned from AOL/NSCP and has written a post-mortem case study that explains why open source is largely a fiction, not a fact.
Furthermore it's important to understand the negative impact on software innovation that I have outlined above, and capital investment that inappropriate Open Source programs could have - with the consumer being the ultimate loser.
Divakar Goswami, USA: 1) Wouldn't it be better for MS to implement a structural remedy rather than be hampered by the constant intrusion that a behavioural remedy would entail?
Shaun Orpen: We are pleased that the US District Court Judge Jackson has agreed that his order to impose business restrictions on Microsoft should be delayed until everything has been reviewed by the appeals process and we are confident that we have a strong case on appeal. This is a bit like choosing between execution and life imprisonment - either type of remedy would have an extreme and damaging effect on Microsoft, our partners and consumers.
2) When ATT was divested by Judge Green the company complained that this decision would harm consumers and constrain innovation in telecom. What happened subsequently couldn't be farther from the above scenario. Why do you believe that Judge Jackson's decision wouldn't bring similar benefits to consumer and the industry?
Shaun Orpen: Equating the break up of AT&T to the break up of Microsoft is like comparing chalk and cheese. AT&T was a private monopoly created by the federal and state governments in the early 20th century to promote telephone service throughout the country. It had clear geographic and business units that made a breakup more feasible. AT&T voluntarily agreed to a split to escape heavy government regulations that had built up over decades.
On the other hand, Microsoft has evolved as a single integrated company where teams of software engineers work in a collaborative environment to develop innovative new software. The government's proposal to break up Microsoft and impose heavy restrictions on the two post-breakup companies would make this kind of collaboration virtually impossible. AT&T was a government created and supported monopoly whereas Microsoft has never received any government support and has grown as a unitary operating company based on intellectual property.
The break-up of AT&T has been cited as an example of the government's ability to intervene in the marketplace in a considered and constructive manner. This was a far cry from the truth. The AT&T settlement was a big step toward deregulating an important industry. The government's proposal to sanction Microsoft is a big step toward regulating America's most competitive industry.
One lesson learnt from AT&T's history - it is impossible to predict the consequences of aggressive government regulation of the high-technology industry. Even after the voluntary divestiture of AT&T, the resulting companies spent 10 years and millions of dollars trying to untangle government regulations that inhibited innovation and customer service.
Al, England: Shaun - throughout the US court case, Microsoft has based its defence on its 'right to innovate'. Which of Microsoft's technological 'innovations' gives you the most pride, and how is it 'innovative'?
Shaun Orpen: Wow, this is a difficult one - there are many examples so it is difficult to chose just one. Personally I would probably indulge myself by pulling out three examples from my time at Microsoft - the first is Windows itself. Although not the first graphical user interface on the market - Microsoft made this available for the industry standard personal computer platform and worked with thousands of manufacturers to build the applications for this platform.
The second would be bringing "plug and play" and making this a reality. This makes such a difference to the usability of personal computers for the average person. Finally I would call out some of the accessibility features for people with disabilities that we build into our products as standard. Having just been on a regional roadshow with Leonard Cheshire and seeing first hand how our technology (straight out of the box) is making such a fundamental difference to peoples' lives - I feel a real sense of pride.
Interesting thing is that what we have seen over the last 10 years is only the beginning. Moore's law (which talks about a doubling of computing power and halving the price every 18 months) means this is the most fantastic environment for software developers to innovate.
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