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06.06.10

Microsoft: “Find a Way for [CompuAdd] to Recoup What They Have Paid to DRI, Then License with MS so That Not a Single DRI Machine Ever Ships”

Posted in Antitrust, GNU/Linux, Microsoft at 12:29 pm by Dr. Roy Schestowitz

DRI

Summary: What happened to DRI and to CompuAdd after a deal had been signed between this pair (another look at Microsoft’s anti-competitive history)

TODAY’s Comes vs Microsoft exhibit is Exhibit PX01010 (1991) [PDF]. It deals with what Microsoft did to DRI and it starts with a message from Tom to Brad Chase, the bully Brad Silverberg [1, 2, 3] (whom the brother of the world's largest patent troll writes to), and several other employees. To quote a portion from the beginning:

We are going to work this as though the Product Marketing were Authors writing a story, Program Management will be editors pointing part of the story they think the author missed and development and test being the background researchers.

Further down we see a message which was also sent to Joachim Kempin, the bully in charge of OEMs [1, 2]:

- Put me on their mailing list

2. Explore these possibilities:
- Find a way for them to recoup what they have paid to DRI, then license with MS so that not a single DRI machine ever ships

It’s probably Microsoft’s #1 innovation — blocking competition (at CompuAdd in this case). Microsoft does similar things against GNU/Linux, so this is very relevant and worth filing below.


Appendix: Comes vs. Microsoft – exhibit PX01010, as text


From tomle Fri Oct 4 12:49:13 1991
To: bradc bradsi ericst jimla marionj richf tomle
Subject: Warteam Notes
Date: Fri, 04 Oct 91 12:39:37 PDT

The new Dos warteam met today to discuss how to proceed in developing a story against DR for Comdex. We all agreed that we turned up lots of info in our previous test that offered a lot of insight and formed the basis of the story we want to tell but was disjoint. We need to go further now and verify problems we think are significant. Our primary goal in this meeting was to develop a way to use the development and test resources in a focused way such that their efforts have the highest probability of developing into a significant story against DR. This effort, and the work items associated with it are assumed to be everyone’s highest priority.

We are going to work this as though the Product Marketing were Authors writing a story, Program Management will be editors pointing part of the story they think the author missed and development and test being the background researchers. Developers/Testers will have two main tasks:

Verifying bugs/problems
Researching a feature

Product Marketing will

Take information at hand and information being developed and will prioritize what can be developed into a good story and what can’t.

The general focus areas for development will be:

Disk Compression
SuperPCQuick
DR’s A20 Handling
Novell/DR environment
Undelete

Work Items — Owner

Check with Legal on how Close developers can get to DR-DOS before we have to shoot them. — TomLe

Prioritize the problems found in our in-house testing and on the DR Compuserve forum — RichF

Scan the Dos Bug database looking for stuff we had to fix that DR probably didn’t — EricSt

We will meet again tomorrow to go over progress.

Thanks.
Tom

########################## 499
From bradc Fri Oct 4 12:49:41 1991

To: bradsi
Subject: FW: CompuAdd Meeting
Date: Fri Oct 04 12:51:23 PDT 1991

fyi

>From ronh Thu Oct 3 15:35:41 1991
To: oemman
Subject: FW: CompuAdd Meeting

Date: Thu Oct 3 15:34:26 1991
>From bradc Thu Oct 3 14:04:35 1991

To: jeffl richardf ronh
Subject: FW: CompuAdd Meeting
Date: Thu Oct 03 13:59:10 PDT 1991

i know this probably goes without saying so pardon me on this one but we really need to be in the face of our oems a lot over the next couple of months – lots of friendly visits

please let me know if there are some oems where a visit from someone on my team could help
thanks

>From susandi Thu Oct 3 09:12:24 1991
To bradc joachimk johnj richardf ronh
Subject CompuAdd Meeting

Date Thu Sep 26 09:11:14 PDT 1991

Johnj and I visited CompuAdd on Tuesday, 1 October Our objectives

  • Confirm whether the CompuAdd Express/DRI deal was inked (It is.)
  • Understand the decision process and why Microsoft was not informed of the opportunity. Express Microsoft’s concern (!!!!) about our partnership with CompuAdd
  • Identify next steps for regaining that business.

We had separate meetings with George Martin, Director of R&D (#2 man to CEO Bill Hayden), and Rick Krause, newly appointed President of CompuAdd Express. Rick negotiated the current agreement with Microsoft. What we discovered:

The Decision Process & Partnership

CompuAdd Express is a totally separate company from CompuAdd. The decision to go with DRI is final. We believe CompuAdd Express has committed to a 25k volume at around $9/unit. The decision was made in a very short time frame and solely by Rick Krause with approval by Bill Hayden. Rick went with DRI because it is cheap (under $10/unit), and it offers a way to differentiate (???) their systems from both their competitors and Compuadd. Rick didn’t contact Microsoft because he assumed he already knew what our best price was
based on the CompuAdd agreement negotiations, and he didn’t see any point in getting into a bidding war. During our meeting, it became clear that Rick made this decision with no thought to key issues such as CompuAdd’s existing pre-paid balance (over $800K and growing!!!), added support costs and customer acceptance of DRI -vs- MS DOS. He assumed that he could provide MS-DOS on special request by getting the MS-DOS via “distribution”. He seemed surprised and concerned to learn that MS-DOS is available only via an OEM license.

Our meeting with George Martin went well. We stated that MS has previously considered CompuAdd a strategic partner, and that the move to DRI makes us wonder whether there was a partnership at all. “Why would a ‘partner’ not give us the opportunity to do business?” We raised the issue of the pre-paid balance, and asked why CompuAdd did not use this opportunity to reduce their (non refundable) pre-paid balance.

We also brought to their attention that the market will not separate “CompuAdd” from “CompuAdd Express”; any negative response to DRI and/or the Compu/Add Express line will accrue to both parties –CompuAdd *and* CompuAdd Express.

George Martin had no immediate response to either issue; he stated that it had not been CompuAdd’s intention to jeapordize the relationship. He took notes.

Plans for Regaining the Business
1. Get Rick Krause’s commitment to do these things:
– Meet with me each time I visit CompuAdd (once per month or more).
- Inform me of any press releases coupling DRI and CompuAdd Express

- Put me on their mailing list

2. Explore these possibilities:
- Find a way for them to recoup what they have paid to DRI, then license with MS so that not a single DRI machine ever ships
- Get MS-DOS on the higher-end machines, relegating DRI to 286 and lower machines. Contain DRI in that “box.” This may be possible since their DRI agreement is based on a quantity rather than a quantity over time commitment
- Convert them on their next catalog drop (March 1992)

3. Ensure that they are not playing both sides in a gray-market or piracy manner. I will call their sales line at least twice per month to confirm their selling methods.

I ask for suggestions from OEM management and account managers for additional ideas on how Microsoft can regain this business.

The bottom line: Microsoft has its work cut out to reverse this poorly considered (stupid) decision.

################### 500
From cameronm Fri Oct 4 12:53:17 1991
To: bradsi
Subject: Re: Windows & OS/2 Conference
Date: Fri Oct 04 12:49:40 PDT 1991

Okay I will try and sign up Paul. From bradsi Fri Oct 4 11:21:26 1991
To: cameronm

Subject: Re: Windows & OS/2 Conference

Date: Fri, 04 Oct 91 11:19:23 PDT

it is most likely that windows will not be shipped by the end of january. so you are right. I would more likely be a target. while paul could shade more on win nt.

>From cameronm Fri Oct 4 10:54:45 1991

To: bradsi
Subject: Re: Windows & OS/2 Conference
Date: Fri Oct 04 10:51:04 PDT 1991

You are right that it should be one of the two of you. I think either of you would do a great job. Paul is not going to be any better than you are and you are more likable.

You are Mr. Windows!

If 3.1 is going to be later than this (very end of January) you might not want to present (as you may be more of a target) and maybe we want Paul to place a subtle emphasis on Windows NT (and off Win 3.1 delays), if we have shipped Windows 3.1 you should do it and be the “proud father.”

Cam

>From bradsi Fri Oct 4 10:38:14 1991
To: cameronm
Subject: Re: Windows & OS/2 Conference

either paulma or I should do it. which do you think would be preferable? paul is a more polished speaker than I am.

Credit: Groklaw

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