Mr. Smith Goes to Washington
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News Analysis. What a difference a decade makes—and a couple of antitrust trials. |
The geeks at Microsoft were just that in the mid-1990s. Microsoft Chairman Bill Gates may be a shrewd businessman, but all told he's really just a developer at heart. Even his philanthropy is calculating in a way, as the Bill and Melinda Gates Foundation gives money for solving problems. It's the problem-solving character, at ground level, that has Bill fascinated by the game bridge, developing software or trying to cure diseases like AIDS.
Geeks speak their own language, like many of society's other subcultures. Their priorities, even lofty ones, tend to be very exact. I don't mean to generalize, because there is a bell curve that applies to all social groups. But some generalizations apply.
External appearance clearly isn't one of Bill's priorities. He likes to dress down, something I relate to. Perhaps "dress down" should be a euphemism for "being a geek." I've attended meetings at Microsoft where some product managers wore shorts. Confession: I've done the same.
I can't think of a subculture more unlike geeks than politicians. Appearance matters very much in politics, as does the craft of shrewd networking. Nothing is exact, because so many decisions are based on relationships—what voters want, favor-for-favor deal making or power positioning. So it's no wonder the geeks at Microsoft mixed little with the politicos in Washington during the 1990s.
Competition by Litigation
But some technologists from Silicon Valley made the Washington pilgrimage during the 1990s and realized the power of lobbying. Companies like Sun Microsystems started mixing with government through system integrators like Andersen Consulting or Deloitte & Touche. For example, Sun Starfire servers were favorites of government contracts during the mid- to late 1990s. The geeks were forced to mix with government types because of business and there learned the power that government yielded.
From these early interactions, between groups that might otherwise never mingle, Silicon Valley competitors started lobbying trustbusters against Microsoft, in Washington and Brussels. When I first covered Microsoft's U.S. antitrust problems in 1997, somebody already had coined the phrase "competition by litigation." It stuck for good reasons.
Court cases in 1997 and 1998 caught Microsoft unprepared. Surely, the company should have learned more from its earlier U.S. antitrust problem and made Washington lobbying a priority. But geeks don't think like politicians. Bill had a consent decree—something exact—to follow. But the 1994 U.S. government-Microsoft settlement (enacted in 1995) wasn't exact enough. Loose interpretation regarding feature integration led to a 1997 trial and in May 1998 the landmark case brought by the U.S. Justice Department and 20 states.
Microsoft could do nothing right with its Justice Department engagement. Bill treated the 1997 court proceeding like a business negotiation. There is an art of negotiation in Washington, but Microsoft hadn't mastered it. The company should have taken 10 whacks and allowed the Justice Department to claim victory in a settlement where Microsoft claimed no fault. At another end of the geek bell curve, Intel repeatedly skirted U.S. legal troubles by bowing before the great Washington machine. Microsoft should have learned from its earlier settlement and from Intel's maneuverings. Instead, Microsoft negotiated for its own terms as priority.
During the 1997 trial, Microsoft lawyers quibbled over the littlest things. The quibbling created mistrust. Most days, I sat in the courtroom simply dumbfounded. Microsoft's lead attorney seemed to punctuate every sentence said to U.S. District Judge Thomas Penfield Jackson with the implied but unsaid, "Your honor, you stupid so and so." The judge was rightly antagonized by the lawyer and some Microsoft actions, like providing a broken copy of Windows after the judge ordered Internet Explorer removed. The geeks wanted to make a point, something exact, about IE's deep integration into Windows, while the judge wanted a practical response.
The 1998 case was an inevitable outcome of the 1997 proceeding. Microsoft's courtroom antics, Silicon Valley lobbying and the burgeoning dot-com boom made the company an antitrust target—and a means for making political careers. Meanwhile, Microsoft still lacked the Washington lobbying presence to combat competition-by-litigation tactics.
Steve and Brad Conquer the World
I remember when, while the 1998 case neared its inevitable conclusion, Microsoft's PR agency, Waggener Edstrom, set up a Washington lobbying office. Around the same time, Bill Gates stepped down as CEO and Steve Ballmer took his place. Steve isn't a geek, he's a sales guy. Salesmen are a helluva lot closer in character to politicians than are geeks.
Nobody understands a politician better than a lawyer with Washington connections. In November 2001, Microsoft announced retirement of William Neukom as general counsel and his replacement by Brad Smith, deputy general counsel. Brad had worked as a lawyer in Washington before joining Microsoft in 1996. During those early years, he worked with sales teams from Microsoft subsidiaries in 81 countries and with BSA (Business Software Alliance) in Washington. Throughout his career before and at Microsoft, Brad worked closely with government entities. His tenure as general counsel would transform how Microsoft interacted with governments and usher in an era of negotiation, where legal problems were dispatched as quickly as possible.
Microsoft also stepped up its Washington lobbying efforts. My eWEEK colleague Roy Mark published some startling numbers yesterday: Microsoft is the lobbying spending leader, at $2.9 million in the first quarter. Technology companies are on track to spend $119 million in lobbying this year.
Microsoft spent $9 million lobbying in 2007 and is expected spend $10 million this year. Other projected 2008 big spenders: IBM ($7.5 million), Oracle ($4.7 million), EDS ($3.7 million) and Texas Instruments ($3.6 million).
But Microsoft's efforts, under the tenure of Steve and Brad, are much broader than boosting lobbying efforts. Major initiatives like the so-called Interoperability Principles have the salesman's and lawyer's touch. Programs like Unlimited Potential, local region anti-piracy initiatives or lower-cost and subscription-based Microsoft products are designed to win favor with politicians and local governments. What politician wouldn't want to be associated with a program to, say, bring low-cost software and PCs to schools?
Microsoft's government efforts will continue, and they're accelerating in some regions. Microsoft has taken quite the beating by the European Competition Commission. Europe is one region where Brad's best efforts couldn't hold back an antitrust storm. Last week, Microsoft appointed John Vassallo as vice president of EU Affairs, a new position. John has worked as a lawyer in Brussels, where Microsoft desperately needs some leverage. As a Maltese national and lawyer, he's more likely to understand European regulators well than the geeks in Redmond, Wash.
Before closing, Bill Gates made his own contribution, but not as aloof geek or monopolist chairman. His stature, as one of the world's richest men and successful businessmen, opens political doorways. More importantly, philanthropic work takes Microsoft's chairman all over the world. The impact of his high profile would be much less without the grunt work done by Microsoft's legal and lobbying teams.
Comments (18)
So, in the past, Microsoft made good products, even while perceptions of those products in some quarters (competitors, regulators) might have been less than good.
Now, Microsoft is more adept at managing perceptions. Trouble is, at the same time, it has let the actual quality of those products slide.
Posted by Lawrence D'Oliveiro | June 5, 2008 9:28 PM
Wow, Lawrence, what you said above seems to describe the USA Republican Party in America as well...
I guess Microsoft and Republican party are tied together somehow..........
Joe, one thing I'd like to see you write about is something like "How the decline of American Dollar has affected Microsoft". That article would be "really cool".
Posted by ZzarkLinux | June 5, 2008 10:23 PM
Actually, Micro$oft has always made bad products but has managed to dupe people into buying them. Now, Micro$oft is trying to manage perceptions but still makes bad products. What's worse, it is still trying to lock consumers into those products.
Posted by Maddog | June 6, 2008 3:22 AM
This idea that Gates is some kind of geek is ludicrous. If he was really in love with technology, he would make some sort of effort not to suck at it so bad.
Just remember he is the spawn of a lawyer, and how he (in)famously experimented with the meaning of "is" while on the stand. To this day, Microsoft uses it's arsenal of lawyers to much greater effect (damage) than it's programmers.
His lawyer heritage also explains his whole the-world-is-mine-all-mine mentality, his inability to share, and his refusal to play nice with anybody.
Don't confuse geeks with lawyers.
Posted by a true linux geek | June 6, 2008 11:09 AM
I find it humorous that you use the title from a Jimmy Stewart movie in which he plays the part of a totally honest politician on his trip to Washington. Surely anyone could not confuse Bill Gates with an honest hero in the Jimmy Stewart movie? Gates is all about everything that this movie is not. Gates may have written a basic compiler, and perhaps helped fixed QDos (Quick and Dirty Dos) after buying it before telling IBM that they actually had a working Dos already. Tell IBM you have the product, then buy the broken product, and then fix it. Just the first example where MS got its start, and an example of its honesty.
The small laptops and "nettops," as Joe like to call em, are going cut into Microsoft's profits soon, as they seem to be an expanding market for them, either with Linux or XP Home installed on them.
Small, Cheap Computer sales to soar as Intel boosts Atom supply
http://www.reghardware.co.uk/2008/06/05/computex_scc_redux/
Quote; "Computex Asus' President, Jerry Shen, has forecast sales of Small, Cheap Computers™ will top 10m units this year, presumably having been encouraged by Intel bigwig Sean Maloney's promise of "very, very high volumes" of Atom CPUs by September."
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I do not believe that Microsoft will be able to draw the line, and only limit XP Home to these types of Laptops with only LCD's smaller than 10.4". Someone will come out with the small laptop with a bigger screen and Linux on it, and it will be a seller.
Posted by chips | June 6, 2008 11:41 AM
@ a true linux geek:
NOW THAT's the truth. Microsoft's lawyers are the most important part of MSFT's business plan.
If Bill gates was a real "developer" Microsoft would have been shipping next generation capabilities 5 years ago when they pretended to have the technology instead of alway "next year" while everyone else is shipping next generation products NOW. Notice everyone is ahead of them even though MSFT spent BILLIONS to develop precisely what others are shipping.
The bare knuckled truth is Microsoft lied about having those technologies and the press bought it all the way.
What is it about the rich that turns every wannabee into a gullible, adle brained sycophant?
That's right, Joe. I'm talking about you as well as all the others who've run interference and cover for Bill Gates' rape of the advances in technology.
Posted by portuno | June 6, 2008 12:19 PM
Do you guys really believe the stuff you are writing? Really?
Are we living in the same universe here?
You guys need to check under your beds for pods, because things are getting downright weird out here!
Posted by WhatWhatWhat | June 6, 2008 1:41 PM
@Dhips
"I do not believe that Microsoft will be able to draw the line, and only limit XP Home to these types of Laptops with only LCD's smaller than 10.4". Someone will come out with the small laptop with a bigger screen and Linux on it, and it will be a seller."
Even if you gave it away, most people out here do not know, understand, or use Linux. There are those who might know of Linux and even Ubuntu. However they are under the impression that you have to be some sort of ubergeek to use it. Linux as been free for at least a decade, and still it is a minority of the operating systems. People want to play games on their PCs and laptops though they are the same ones that want to run Flight Sim X or a heavy graphics demanding application on these cheap laptops.
No, even if they gave these laptops away, they would find someone to load MS on them.
Posted by Douglas S. Taylor | June 6, 2008 6:11 PM
@Douglas S. Taylor :
"Even if you gave it away, most people out here do not know, understand, or use Linux. There are those who might know of Linux and even Ubuntu. However they are under the impression that you have to be some sort of ubergeek to use it."
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Your point is not without merit, but I think you have to ask yourself two things. One, what type of person will buy they ultra-lite laptops? Two, if these laptops are on display, in a store, will not people see that they are no harder, perhaps easier than windows?
After all, there must be a reason that Microsoft is so drastically cutting its price of XP home for these computers. Could it be that people will fall in love with these Linux computers, when they see no malware problems, no cost to buy software as they can just download free software, and have a far more stable OS than windows, while saving money?
Fear not, I knew it was a typo.
Posted by chips | June 6, 2008 11:41 PM
"Even if you gave it away, most people out here do not know, understand, or use Linux."
True enough. Except most of the people buying these budget ultralights don't even *know* they're running Linux. They're just an appliance that you can just switch on and immediately start doing cool Internetty stuff with. That's the disruptive thing about them--Linux is just a means to an end. The fact that Linux is a better means than Windows to that end is irrelevant to them.
Posted by Lawrence D'Oliveiro | June 7, 2008 1:19 AM
@Chips
Thanks for recognizing the typo that is exactly that.
The stigma of Linux is exactly what I've mentioned already -- Same as it is, that is akin to Vista being a "terrible OS" in the general public.
I agree, Ubuntu 8.x is a snap to install in basic and for me, easy to use since I come from a Unix backgroud of long ago.
The people that would buy a cheap laptop would be people in my humble opinion that knows very little about IT or can't afford a decent laptop. The keyword in this senerio which I think is valid, that these people are not knowledgeable about the Linux world -- Why else is Linux is so small in percentages used?
Linux has been out over a decade, and still it pales miserably in world domination of OS's used, even in the spite of what you and others are saying about free software and applications.
I for one enjoy Linux's Ubuntu 8.x (x64 especially) and I run Open Office in both the Linux and MS platforms as well. I support the endeavers of Open Source and as you might know I am far from a MS Shill since I own all three of the major platforms.
As I said (somewhere) before, I own a HP Blackbird 002 now running Vista x64, a MacPro Quad-Core with OS X and a Dou-Core HP Ubuntu machine. All three OS's have crashed but the least of these and the less problematic as been Ubuntu proving the most reliable but the least productive since I do most of my gaming and my Adobe Creative Master's work on my Vista machine.
Unfortunately, Apple has proven very unreliable, and at best, troublesome thanks to the OS X and the lack in true gaming. My ipod works better in both Ubuntu and in Vista far better than Mac -- Odd?
Getting back on track -- Lawrence says it best with the demographics of the people that would purchase this cheap laptop.
Now the question you've raised about Microsoft selling the XP license so cheaply on these "toys" is a significant one you brought up and I think you know the answer(s) to this.
1.) MS's world domination -- Two fold, one part is simply to get this demographic hooked on MS products and the way of life, second to attempt to edge out chances of those subscribing to the Linux way of life.
For me, there's no number 2!
I believe that Lawrence is exactly right, most people who even own a iPod know that Apple makes it, and would assume its some sort of Apple OS on it, but that would be as far as it goes and people would or could care less about it.
Can Linux run on the iPod? Yes of course and there is the Linux solutions out there -- But people in general can care less, why?
It does what they, the majority want it to do, it's the purpose they bought it for -- Same for these cheap laptops -- It does what it suppose to do, what they want it to do, and thus, are just sublime to the alternative possibilities.
Sucks in a major way to those of us who are enlightened by these wonderful alternatives, and again in my humble opinion.
Posted by Douglas S. Taylor | June 7, 2008 10:03 AM
The point here is: Why would people leave Ms for Linux? We’d be talking globally-and therefore there are many answers. Let’s go with the main ones.
(Speaking about people who are not technical).
1. The mass buy the product which is most publicised. That would be Windows. However, when they go to the store and buy a cheap Pc that just works (OS are getting to the point of ‘just working’) they’ll buy that one, notwithstanding which OS it has got.
2. In a $1000 PC, the cost of Windows is not noticeable. In one that’s worth $200, it is. That can make a difference (not my words, but rather those of Gianpiero Morbello Acer).
3. In a world that has got alternatives-not monopolies- to create a product which suits everyone is impossible. Thus, different products would be necessary. Just because of this, together with the creation of effective OSs, Ms would end up losing its monopoly.
There are many more reasons, like the fact that those who know about IT will be tired of Ms will be teaching those who are not as technical how to use alternative products. But let’s leave it at that.
Why doesn’t the world change to Linux? The answer is simple: the total number of factors has not been reunited yet. But everyday brings us closer to that happening. Ms has helped a lot with Vista. e.g. A year ago, certain things were unthinkable…are they now?
To Taylor:
I don’t like how derogatory your ‘humble’ opinion is.
Posted by Marco | June 7, 2008 2:47 PM
Acer bets big on Linux
ww.vnunet.com/vnunet/new
The company is already heavily promoting Linux for its low cost ultra-portable netbook range out later this year, but senior staff have said that Acer will also push Linux on its laptops.
Acer has already started selling Linux in its Media PC business but this should now spread, according to Gianpiero Morbello, vice president of marketing and brand at Acer.
"We have shifted towards Linux because of Microsoft," he said. "Microsoft has a lot of power and it is going to be difficult, but we will be working hard to develop the Linux market."
Acer sees two killer apps with Linux on computers: operation and cost. Its flavour of Linux will boot in 15 seconds compared to minutes for Windows, and the open source operating system can extend battery life from five to seven hours.
At the same time, the company expects that the price differential of Linux will make the offering attractive for consumers at the low-cost end of the market.
"Microsoft's operating system typically costs around £50 per unit," said David Drummond, UK managing director at Acer. "On a £1,000 PC that is peanuts, but on a £200 computer it is a major issue."
Posted by Marco | June 7, 2008 2:49 PM
"Why else is Linux is so small in percentages used?"
I beg to differ. everybody who uses Google is using Linux. Not on the desktop, that's true. But as the power behind the information they seek.
In fact, it might be fair to say that Linux that powers the #1 most popular on-line help facility for Microsoft's products.
And remember that Linux is only the kernel, while a complete distribution (such as Ubuntu) is composed of a relatively tiny (as compared to the entire distribution) Linux kernel with a huge wrapper of GNU FSF software and a liberal sprinkling of other open source--both GNU-licensed and non-GNU--software.
Replace the Linux kernel with the BSD kernel, and it's quite often that the entire round trip of request and response for someone requesting help with some Office 2007 problem on Vista would consist nearly entirely of open-source software with the Windows client representing only a tiny percentage of that round trip.
Windows is where the money is. Not necessarily where it will be (and I don't even claim to be able to debate the future on this). But it's not where the innovation is, and it's not what powers the Internet today.
If you ask Bill Gates why he produced such poorly constructed software and shrewdly licensed it to build a desktop monopoly, he might very well give you the same reply as a bank robber of olden days: "Because that's where the money is."
Posted by Philosopher | June 7, 2008 3:04 PM
@Douglas S. Taylor
I have to agree with your latter opinion. True, if Linux is so fantasic, why is it still the minority operating system? Granted, it has improved over the years and there is more support for it, but still, free doesn't make it the best and I know you didn't say it's the best as some sort of a Linux shill or something.
Yes, I've tried it, Ubuntu, though free and very stable as you mentioned, but I need to get things done and the Linux world can't get me there easy enough, not enough great apps, or the fact that I cannot find them which leads me to your next point: In basic, Linux is still a pain in the butt for me to learn and I give up like most people.
@Marco
"Sucks in a major way to those of us who are enlightened by these wonderful alternatives, and again in my humble opinion..." I think Taylor was talking in respects that it sucks that the average person doesn't know or care about other alternatives.
What's so derogatory about that?
Posted by Glenn | June 8, 2008 8:41 PM
@Glenn
@Douglas S. Taylor
"Why else is Linux is so small in percentages used?"
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Perhaps its called advertising. GNU Linux really has no advertising budget. Look at MS about to spend another 350 million on the failed Vi$ta advertising. On top of the 500 million at rollup. Also, think of it this way, if you belief the netstat figures, (and I don't, for one, as its much higher) then Linux has tripled its userbase since the advent of MS Vista. Mac has more than doubled its base. GNU Linux only advertising is by word of mouth.
Now, else you forget, why Linux is a better OS than windows, (especially including Vi$ta) let me remind you. Gnu/Linux community distros are mostly free, that compares well with $399 Vista Ultimate when it was released. Plus, all the other apps that come with these distros, are generally free as well. So the cost savings in software is substantial.
Now your happy with XP or Vista, thats fine. You tried Linux, but did not really want to take the time to learn it. Probably the OS itself was fairly easy to learn, but the apps that came with it, although easy to learn also, were different than the ones you were accustomed to in windows. So at this point, you said just go back to Vista or XP, as you already have the software. I have a close relative like this. He has moved to Linux about 50% of the time. And the reason is, no matter how hard he tries to protect his XP installation, at some point, it either crashes (unstable for the long term), some piece of malware gets through all the antivirus/antimalware, or its suffers from Win rott, as in too many 3rd party apps installed and finally the software conflicts and the registry crashes it. He gets about a year in his case. This is fairly common with a lot of folks out there that install a lot of software. Of course like 99% of windows users out there, he is running XP in administrator mode. Lets face it, NT was never setup for the average home user to run as a limited account and do everything as easy as can be done in a nix system.
So malware problems in Windows, including Vista, is a huge reason to switch to Linux. And if you own a business, and use windows to do your financial transaction online, with all the keyloggers out there, I pity you.
Web-based malware on legit sites soars
http://news.zdnet.co.uk/security/0,1000000189,39429909,00.htm?r=6
Quotes; "The amount of web-based malware on legitimate sites has increased by over 400 percent since last year, according to security vendor ScanSafe."
Posted by chips | June 9, 2008 3:17 PM
Hey Joe;
I find it humorous that you use the title from a Jimmy Stewart movie in which he plays the part of a totally honest politician on his trip to Washington. Surely anyone could not confuse Bill Gates with an honest hero in the Jimmy Stewart movie?
I suggest you would have done better user the title from the movie "The Carpetbaggers." Showing Billy showing up in Washington with a big Carpet bag of cash. That would have fit better. LOL
Posted by chips | June 9, 2008 10:55 PM
Joe;
I think Chips may have touched on something there with the Carpetbaggers thing.
It's a pitty that the United States Congress applauded a theif and a corperate mongering cheat as Bill Gates. Yes sir, they kissed his NTFS formatted backside as a hero.
Made me sick really, but then after settling down for a moment, I realized that the United States Government is a corperately facist federalisc "Whatta got in that there bag?" business -- after all, should this really be such a surprise to me?
Money -- The true God of the United States...
"Bill, we like to thank you for all the billions earned by screwing over the little guy. After all, this is the founding principles that our country has been founded upon..."
"Thank you, Senator (add name here). It's been my pleasure to develop software to entertain and keep America busy so they don't get carried away in the real matters of government."
"Bill we also like to thank you and your company for offering, or should I say, outsourcing many of your projects, labor, and talent overseas to the plight of third world countries..."
"Thank you again, Senator. It has been my personal goal and that of Microsoft to spread the knowledge to countries such as India where we eventually outsourced all of our customer service support and other call centers that not only adds to the enrichment of their lives, but the money my company saves, well, you know..."
"Yes, yes we do indeed, Bill..."
Posted by Douglas S. Taylor | June 9, 2008 11:09 PM