01.01.09

Gemini version available ♊︎

Microsoft History of Exploiting Free Labour Repeats Itself

Posted in Antitrust, Apple, Bill Gates, Courtroom, Deals, Deception, Finance, Free/Libre Software, IBM, Patents, Steve Ballmer, Windows at 11:06 am by Dr. Roy Schestowitz

Bruised face
Partners you can’t trust

WE have already warned Free software developers who are led to believe that Microsoft is genuinely interested in helping them, rather than exploiting them as usual. Those who are new to this debate are advised to read:

Microsoft is renowned (or notorious, depending one’s point of view) for only exploiting developers who help Microsoft increase sales, e.g. of Windows. If those developers make some money, then Microsoft copies them and undercuts them through pricing or bundling. But there is another form of exploitation, which a reader sent us a tip about. It’s about what Microsoft calls “getting IBMed.”

The definition of “getting IBMed,” says our reader, is “getting our ‘competitors/partners’ to work for us and getting our ‘partners/competitors’ to pay for it.”

And how nicely it is illustrated in this confidential message from Bill Gates to Steve Ballmer (dated August of 1989). We append the full text at the bottom and we have just made a permanent local copy of the original court exhibit [PDF] from Comes vs. Microsoft (Iowa antitrust). One part of it says:

Windows is still not as nice as the mac and it would be easy to be a lot better. Win 3 goes a long ways but we cant get IBMed on this one.

That’s from Bill Gates. He said that the Mac was better, but they needed IBM to help them reverse this, just like with Sony and Playstation. Two days ago, in the Wall Street Journal, the following article was published:

…in 2001 Sony partnered with Toshiba and IBM to create the so-called Cell processor — a chip so powerful that it would redefine PC-scale power…

[...]

In late 2002, Microsoft approached IBM about making the chip for Microsoft’s rival game console, the (as yet unnamed) Xbox 360. In 2003, IBM’s Adam Bennett showed Microsoft specs for the still-in-development Cell core [...] The result was that Sony’s R&D money was spent creating a component for Microsoft to use against it.

“According to this, Microsoft joined the party late and got IBM to show them the specs for the joint Sony/Toshiba CELL processor [...] only it was Sony that paid for it” says a reader.

The history that we present here is similar and the full text is below. Readers may spot repeated spelling mistakes like “basicly” and “agressive” (it’s not just a typo because it’s repeated separately). Here is a part about patents where Gates says:

First, we have to make sure windows isnt easy to clone for both technical
 and legal reasons. Who is smart that thinks about this – patents and
 such. I can do it at some point and I think we will be able to achieve ito
 DOS being fairly cloned has had a dramatic impact on our pricing for DOS.
 I wonder if we would have it around 30-40% higher if it wasnt cloned. I
 bet we would!

Another part talks about “software evangelization” (namely “We may need to do some more software evangelization in certain catergories”). By “evangelization”, does he refer to "the Slog"?

Concludes Bill Gates: “IBM never knew our plan and if they did they shouldnt like it – our old plan (DOS) which is the current financial success of the company- sell cheap to IBM and make money from everyone else.”


Aug 6 21:34 1989 MAIL Page 1

From billg Sun Aug 6 21:34:05 1989
To: steveb
Subject: OS strategy
Date: Sun Aug 6 21:34:03 1989

I have been thinking about this in a pure MS context to understand what
is important for us and then see how the IBM relationship helps with that.

ny worth $7B. Thats
doubling the current valuation. We would have to more than double our
profits. Let say systems has to bear the same proportion of that burden
in the future as it does now and that as a group (server, mouse, lang,
 and toolkits) do their share (small) with server making up for the
 fact that mouse, lang and tollkits cant bear their part. That leaves
 the Os part (dos, win, os/2) with a huge burden. Basicly last year
 (I may get the numbers wrong) it was around $180M worldwide PROFIT.
 Assuming 12m machines thats $15 PROFIT per machine or giving IBM
 1/3 of the market (a little high) $22.5 per non IBM machine. We have to
 drive that number up to around $45. Taking a 3 year time frame I think
 windows has a lot to do with it -I can see us lowering the price
 differential for “high end windows” (a nickname I have for what os/2
 has to be perceived as over time) because we want to get it bootstrapped
 to the point where it wont cost a lot more than windows does. This means
 the price we can charge for windows will drive a lot of our future.
 Now how can we get this doubling per system thing to take place.

First, we have to make sure windows isnt easy to clone for both technical
 and legal reasons. Who is smart that thinks about this – patents and
 such. I can do it at some point and I think we will be able to achieve it.
 DOS being fairly cloned has had a dramatic impact on our pricing for DOS.
 I wonder if we would have it around 30-40% higher if it wasnt cloned. I
 bet we would!

Second, we have to make windows really good – not in the ways we have assig
 to os/2 but in ease of use approaches and software environment richness
 approaches. We will need smart people to adavnce the product – smaller,
 faster for the kernel but smarter for all the interface pieces. Apple
 isnt dont what they should in this area and we can. I am not saying to
tilt back towards windows or even to keep particular people but rather to
 keep what we have and focus it on refinement of speed/size and interface
 stuff. We may need to do some more software evangelization in certain
 catergories.

WE have to make windows like DOS is today – basicly new applications all
are done for it and people assume it.

FInancially if we havent tied our hands we need to be able to double the
oem price or go after a VERY agressive retail strategy. The things we
cant afford are:

1. Not being able to improve the product freely. In other words getting
into the mess that Os/2 is in. Windows is still not as nice as the mac
and it would be easy to be a lot better. Win 3 goes a long ways but we
cant get IBMed on this one.
2. A cheap royalty to IBM that means if other oems refuse to per system
license we end up getting very little.


Aug 6 21:34 1989 MAIL Page 2

3. Transferring a lot of money to IBM.
4. Not positioning windows agressively.

If we hold windows back we wont double our oem revenues. I know os/2
is important and we need it to get UNIX apps ported and to fight the
high tech and server battles. But windows is DOS for twice the price
and we need it to be pervasive.

I am afraid of a structure with IBM where we are in partnership for the
following reasons:
 a) server businesses arent enough of a gold mine to be a huge part of
 our goal. With IBMs cost structure I would like you to explain to me
 how a server business can even break even.
 b) I am hard core about not putting DOS/win into the financial partnership
 If only IBM users buy their package or that % then a low roaylty is ok
 but how do we avoid IBM holding us back on windows. Maybe I am paranoid.
 c) Lan business is too fast moving to let them write all the code
 d) Once os.2 takes over I see our profit per machine actually dropping
 and never increasing again. This last point I meant to spend more time
 on. Os/2 will dominate eventually and it should allow us at some point
 to double again (is that asking too much? maybe) or at least grow per
 unit more than the UNIX machines cut into the desktop market so we
 grow with the market.

One question I have steve is:
 Shouldnt we let the slow pace of negotiation continue? I think that is
 in our best interest.
 Shouldnt we force them to explain how to make money in the server business
 since they are the ones who put so much into it?

IBM never knew our plan and if they did they shouldnt like it – our old
plan (DOS) which is the current financial success of the company- sell
cheap to IBM and make money from everyone else. I prefer an OS.2 deal like
that a lot more than a joint venture. OF course it makes us sensitive to
2 phenomena I worry a lot about: a) cross selling and b) IBM increases
market share. A is the worst since increases in royalties will force some
oems to rely on A. I dont know how to solve that. If you feel we have to
“joint venture” with IBM I think we give up growth opportunity.

SOmehow this discussion is the most important one for the companies busines
future and I guess I should think about it more. In any case there are
some thoughts. You can call them greedy. Its funny but I always thought
other people in the company would end up pushing me to think more about thi
financial upside stuff but it never happens. I was supposed to get to be
a product guy with people pushing me to charge enough but when It comes to
oses I feel more guilty than anyone that we dont have the clear plan to
make 2x as much in oses. Os profit is our past present and future so lets
you and I figure out how to double it without IBM problems. No easy job!


Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

8 Comments

  1. Diamond Wakizashi said,

    January 1, 2009 at 4:24 pm

    Gravatar

    Did Ballmer throw a chair at that woman in the picture?

  2. Roy Schestowitz said,

    January 1, 2009 at 4:26 pm

    Gravatar

    No, like most pictures used here, it’s taken from this royalty-free collection.

  3. Jose_X said,

    January 1, 2009 at 9:10 pm

    Gravatar

    This exchange gives the appearance of a clean intro to the real dirty bits discussed later on.

  4. David Gerard said,

    January 2, 2009 at 11:10 am

    Gravatar

    XP is a non-moving target and Wine is doing better and better. MUWAHAHAHA.

  5. Roy Schestowitz said,

    January 2, 2009 at 11:15 am

    Gravatar

    The Novell deal may complicate it somewhat.

  6. Jose_X said,

    January 2, 2009 at 4:57 pm

    Gravatar

    >> XP is a non-moving target

    I think it’s a much better target than Vista (much better), but I think wine offers an example that even old API are not what they seem.

    [Coders should keep in mind that XP may not be supported in any official way much longer.. perhaps a better related target would be wine itself.]

    Microsoft can add things to an installation (in the registry or invisibly) that would be needed in order to properly initialize the system libraries for the application. In some cases, this might be on a per app basis. In other cases, it might be on a per installation basis. The implication would be that applications might need to be hand tuned (reverse engineering) on a case by case basis when ported to any supposed clone of the winapi platform (eg, wine). The good news is that once you would get the app to work, it should continue working.

    On XP, during any moment in time when the machine is connected to the Internet (or even without connecting if there are other triggers of dormant code paths) the system library behavior might be changed from right under your nose.

  7. Jose_X said,

    January 2, 2009 at 5:20 pm

    Gravatar

    >> The implication would be that applications might need to be hand tuned (reverse engineering) on a case by case basis when ported to any supposed clone of the winapi platform (eg, wine).

    For closed source software, a more accurate statement would be that the clone platform (not the app) would have to be hand-tuned (in undocumented ways) for each app.

    I don’t have wine dev experience, btw; however, I expect that whatever tricks XP can pull off, Vista will do in greater quantity and with greater subtlety (at least once Vista gets ironed out).

  8. David Gerard said,

    January 3, 2009 at 11:43 am

    Gravatar

    Wine does support Vista apps as the demand comes up. The way Wine works is, rather than attempting to duplicate the entire sprawling Win32 API, they duplicate parts of it as actual applications turn up that need those bits. Surprisingly little of Win32 is actually used by anyone in practice!

    Microsoft frequently uses app-specific workarounds so that badly-behaved old apps will work on new versions of Windows (per Raymond Chen’s excellent blog). So such hacks are actually part of Win32! However, Wine is not indulging in such things until it absolutely has to, or with occasional variant behaviour of DLLs depending which version of Windows it’s set to claim to be.

    (I’m not a Wine developer, just a user and fan.)

DecorWhat Else is New


  1. Links 4/12/2021: Gedit Plans and More

    Links for the day



  2. Links 4/12/2021: Turnip Becomes Vulkan 1.1 Conformant

    Links for the day



  3. IRC Proceedings: Friday, December 03, 2021

    IRC logs for Friday, December 03, 2021



  4. Links 4/12/2021: EndeavourOS Atlantis, Krita 5.0.0 Beta 5, Istio 1.11.5, and Wine 6.23; International Day Against DRM (IDAD) on December 10th

    Links for the day



  5. Another Gemini Milestone: 1,500 Active Capsules

    This page from Balázs Botond plots a graph, based on these statistics that now (as of minutes ago) say: “We successfully connected recently to 1500 of them.” Less than a fortnight ago more than 1,800 capsules overall were registered by Lupa, almost quadrupling in a single year



  6. [Meme] António Campinos and Socialist Posturing

    Staff of the EPO isn’t as gullible as António Campinos needs it to be



  7. António Campinos as EPO President is Considered Worse Than Benoît Battistelli (in Some Regards) After 3.5 Years in Europe's Second-Largest Institution

    The EPO's demise at the hands of people who don't understand patents and don't care what the EPO exists for is a real crisis which European media is unwilling to even speak about; today we share some internal publications and comment on them



  8. Media Coverage for Sale

    Today we're highlighting a couple of new examples (there are many other examples which can be found any day of the year) demonstrating that the World Wide Web is like a corporate spamfarm in "news" clothing



  9. Links 3/12/2021: GNU Poke 1.4 and KDDockWidgets 1.5.0

    Links for the day



  10. IRC Proceedings: Thursday, December 02, 2021

    IRC logs for Thursday, December 02, 2021



  11. Links 3/12/2021: Nitrux 1.7.1 and Xen 4.16 Released

    Links for the day



  12. Links 2/12/2021: OpenSUSE Leap 15.4 Alpha, Qt Creator 6

    Links for the day



  13. The EPO's “Gender Awareness Report”

    There’s a new document with remarks by the EPO’s staff representatives and it concerns opportunities for women at the EPO — a longstanding issue



  14. IRC Proceedings: Wednesday, December 01, 2021

    IRC logs for Wednesday, December 01, 2021



  15. EPO Staff Committee Compares the Tactics of António Campinos to Benoît Battistelli's

    The Central Staff Committee (CSC) of the EPO talks about EPO President António Campinos, arguing that “he seems to subscribe to the Manichean view, introduced by Mr Battistelli…”



  16. Prof. Thomas Jaeger in GRUR: Unified Patent Court (UPC) “Incompatible With EU Law“

    The truth remains unquestionable and the law remains unchanged; Team UPC is living in another universe, unable to accept that what it is scheming will inevitably face high-level legal challenges (shall that become necessary) and it will lose because the facts are all still the same



  17. Links 1/12/2021: LibrePlanet CFS Extended to December 15th and DB Comparer for PostgreSQL Reaches 5.0

    Links for the day



  18. EPO Cannot and Will Not Self-Regulate

    The term financialisation helps describe some of the activities of the EPO in recent years; see Wikipedia on financialisation below



  19. [Meme] Germany's Licence to Break the Law

    Remember that the young Campinos asked dad for his immunity after he had gotten drunk and crashed the car; maybe the EPO should stop giving diplomatic immunity to people, seeing what criminals (e.g. Benoît Battistelli) this attracts; the German government is destroying its image (and the EU’s) by fostering such corruption, wrongly believing that it’s worth it because of Eurozone domination for patents/litigation



  20. EPO Dislikes Science and Scientists

    The EPO's management has become like a corrupt political party with blind faith in money and monopolies (or monopoly money); it has lost sight of its original goals and at this moment it serves to exacerbate an awful pandemic, as the video above explains



  21. Links 1/12/2021: LibreOffice 7.3 Beta, Krita 5.0, Julia 1.7

    Links for the day



  22. Links 1/12/2021: NixOS 21.11 Released

    Links for the day



  23. IRC Proceedings: Tuesday, November 30, 2021

    IRC logs for Tuesday, November 30, 2021



  24. Links 1/12/2021: Tux Paint 0.9.27 and WordPress 5.9 Beta

    Links for the day



  25. [Meme] EPO Administrative Council Believing EPO-Bribed 'Media' (IAM Still Shilling and Lying for Cash)

    IAM continues to do what brings money from EPO management and Team UPC, never mind if it is being disputed by the patent examiners themselves



  26. The EPO's Mythical “Gap” Has Been Found and It's Bonuses for People Who Use Pure Fiction to Steal From Patent Examiners

    The phony president who has the audacity to claim there's a budget gap is issuing millions of euros for his enablers to enjoy; weeks ahead of the next meeting of national delegates the Central Staff Committee (CSC) tells them: "Events show that the delegations’ concerns about functional allowances have materialised. The lack of transparency and inflation of the budget envelope gives rise to the suspicion that high management is pursuing a policy of self-service at the expense of EPO staff, which is difficult to reconcile with the Office’s claimed cost-saving policy, and to the detriment of the whole Organisation."



  27. Video: Making the Internet a Better Place for People, Not Megacorporations

    Following that earlier list of suggested improvements for a freedom-respecting Internet, here's a video and outline



  28. Links 30/11/2021: KDE Plasma 5.23.4, 4MLinux 38.0, Long GitHub Downtime, and Microsoft's CEO Selling Away Shares

    Links for the day



  29. A Concise Manifesto For Freedom-Respecting Internet

    An informal list of considerations to make when reshaping the Internet to better serve people, not a few corporations that are mostly military contractors subsidised by the American taxpayers



  30. Freenode.net Becomes a 'Reddit Clone' and Freenode IRC is Back to Old Configurations After Flushing Down Decades' Worth of User/Channel Data and Locking/Shutting Out Longtime Users

    Freenode is having another go; after “chits” and “jobs” (among many other ideas) have clearly failed, and following the change of daemon (resulting in massive loss of data and even security issues associated with impersonation) as well as pointless rebrand as “Joseon”, the domain Freenode.net becomes something completely different and the IRC network reopens to all


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts