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Microsoft's “Talking Point” Memo and the Anti-GNU/Linux Studies

Marionette
Mechanic conversations



IN A PREVIOUS SERIES of posts, we showed that Microsoft had exploited analysts' lack of integrity to generate case studies and other material against GNU/Linux [1, 2, 3, 4, 5]. In the following antitrust exhibit, Exhibit PX08887 (September 2004) [PDF], we find evidence that relates to this. It arrived a couple of years after Microsoft had planned to produce some ammunition against GNU/Linux.

This set of documents contains "talking points" that relate to the "Get the Facts" campaign against GNU/Linux (see page 12). As we showed before, using another antitrust exhibit, “Fear Uncertainty Doubt (TALKING POINTS)” is part of the game at Microsoft.

Today's exhibit starts with an E-mail from Larry Cohen to Bill Gates and Steve Ballmer. He is writing or assembling talking points for them. Here is how it's titled:

Microsoft Company Meeting Draft Talking Points


It's a phony debate that they must be prepared for.

It starts with a lot of 'fluff' about "innovation". Bill Gates has people writing answers, such as:



What was the reason for cutting WinFS from the Longhom release? Are we abandoning the whole LH Wave concept?

  • Vision and commitment to LH has not changed


  • We are still on a path to deliver advances well beyond the magnitude of our prior innovation leaps.
  • Prioritizing and getting it right
  • Outline Customer & ISV benefit
  • Specifically highlight commitment to WinFS




In many of the answers, almost everything revolves around the theme of "innovation, innovation" or "R&D". It's funny how they get spoon-fed answers and all sorts of buzzwords that are intended to appeal to viewers or readers.

Then it moves on to Ballmer, who is being prepared to answer questions about the massive buybacks that will soon put the company in debt [1, 2, 3, 4, 5]. He is also asked about GNU/Linux, which they lump in with OSS (Open Source software). It's worth emphasising because Microsoft is now pretending that it's a friend of OSS.



4. How are we doing vs, Linux? Can you give us some specific comparables so we know where we are winning, holding our ground and still losing ground? Do you see a threat from Linux in the home PC market?

(Core question: Winning: Will we win in our competition with OSS?

  • We are hitting our stride in understanding how we meet the challenge


  • Competing with Unix through innovation, quality support execution, and facts-based customer education.


  • Confidence for our success- OSS evolution and the commercial model


  • Need for flawless execution


  • Getting traction- The facts are speaking for themselves


  • The home market threat- customer value, our investments and partner ecosystem




Later on in this document, answers are listed in greater depth.

4. How are we doing vs. Linux? Can you give us some specific comparables so we know where we are winning, holding our ground and still losing ground? Do you see a threat from Linux in the home PC market?

(Core question. Winning: Will we win in our competition with OSS?

  • Hitting our stride in understand how we meet the challenge
    • We know how to compete with Linux through innovation, quality support execution, and facts-based customer education.




  • Confidence and strategy
    • I have a for of confidence in how we stack up competitively with Linux in terms of strategy, sales and marketing, and our product offerings. As terms of Linux distribution model matures, we see vendors like IBM and RedHat adopting a commercial model around Linux, which, due to high services costs, is quickly putting to bed the notion that there is a cost advantage over Windows.


    • But we have to keep making sure we’re doing the right things:
      • Where we have a good story to tell vs. Linux are we telling it well?


      • Are we talking to customers and engaging on the right fronts?


      • Where Linux has traction, are we delivering the dght products forthe workloads?
    • With single-purpose server scenarios such as file/print/web server, it’s a battle, no question, but we are responding with very strong workload-specific SKUs such as Windows, Server 2003 Web Edition, Windows Server 2003 Storage Edition and an upcoming High-Performance Computing offering.


  • The facts are speaking for themselves

    • We now have independent studies from respected analyst firms like Forrester, IDC, Yankee Group and Beading Point underscore the advantages over Windows over Linux in key areas such as TCO, performance, reliability, interoperability, security, support, indemnification and a worldwide partner network. Our Get the Facts campaign is focused on educating customers about these facts
    • Customers are taking notice- we’re making significant strides. (invite employees to look at the site.)


  • Specifically, the home market
    • In the home market, OSS products simply do not provide meaningful customer value on the client compared with our offerings. Customers are demanding easy home networking, great integration with digital media, games, etc., and here, we and our partners are absolutely in a position of leadership. I am confident that will continue as long as we continue to execute well.




  • Most importantly, nobody is really making the investments to completely understand the customer in the home and also investing to make the PC experience easier and easier.






Ballmer is asked to say that they have "independent studies from respected analyst firms like Forrester, IDC, Yankee Group." But who paid for these studies? There were controversies before which involved "independent but Microsoft-commissioned studies." Those affected were rightly outraged.

We already know that Microsoft pays Forrester for slime on GNU/Linux. IDC and Gartner are the same [1, 2, 3, 4, 5, 6, 7], not to mention the Yankee Group [1, 2, 3].

This entire "Talking Point" routine is a cheap stunt, fueled by an expensive smear campaign against GNU/Linux.




Appendix: Comes vs. Microsoft - exhibit px08887, as text








From: Larry Cohen Sent: Friday, September 10, 2004 5:28 PM To: Bill Gates, Steve Ballmer Cc: Mich Mathews; Katy Hunter; Craig Beilinson; Kevin Johnson; David Siroky; Debbie Hill; Dorothy Veith; Christine Turner; Bob Belan (D.N.A. Inc) Subject: Company Meeting Outline Docs Attachments: 9.10.04 comeeeting outline.doc; 9.10.04 comeeeting q.2.doc

Bill and Steve --

I have enclosed both an outline version and more complete version of the script questions and messages for the company meeting.

As discussed, we expect that you will make a lot of this your own as well.

Additionally, Kevin is set (as appropriate) to go further on certain points, question you on points you may make, etc. We don’t want this to come off as over scripted. That said, these represent some of the messages we would like you to convey.

We’re still gathering some key facts on security progress. These will come on Monday and I will call them out for you

The speechwriters are following up with logistics information.

We’ll have time on Tuesday morning to work out any other synch issues on subjects you both want to talk to and also hash through interactions with Kevin.

7/14/2005 ~Plaintiff’s Exhibit~ 8887 Comes V. Microsoft

MS-CC-RN 000001217817 HIGHLY CONFIDENTIAL




Microsoft Company Meeting Draft Talking Points

Outline

Bill ______________________________________________________________

As Microsoft matures, how will you continue to ensure that it keeps trying to innovate, building the better mouse trap, recreating itself: continue to focus on the future and not just rest on past laurels and defend its existing portfolio? What are we doing that will change the world (again)?



I understand part of our strategy is to sustain our competitive advantage through integrated innovation, As we develop more complex products, and grow as a company (in number of employees), this entails increasingly complex integrated execution. How are we going to continue pulling this off? Do you see a limit as to how large and complex we can be as an organization?



What was the reason for cutting WinFS from the Longhom release? Are we abandoning the whole LH Wave concept?



What are the key strategies to deal with the security headaches we’ve had to address in the past year?



MS-CC-RN 000001217818 HIGHLY CONFIDENTIAL






Please help us better understand the vast sum of money we spend each year on research? Where does the money get spent? What do we get from our investment?



How much of your time are you spending in R&D area in MS, and what kind of activities are you doing?



Steve ________________________________________________

1. My question for the company meeting is, "How aggressively will we grow"? Are we moving to a model where compare ourselves with older or more conservative companies like Disney and Dell, with little interest in taking risks and offering new features and products, or are we going to stay the "Microsoft of the 90’s", and compare ourselves with companies like Google and Apple, and take more new risks and really focus on crating cool and interesting technologies that consumers "really, really want" to buy?

(Core question: Growth: How will we grow? Will we grow?)



2. If you were projecting our financial figures 5 years out, what would you be happy with in terms of an annual revenue and profit growth over those five years? What would be a stretch target?

(Core question: Growth. Be specific, what is your target, what level of growth should we be happy with?)



2a. Follow-on question from Kevin. "You mention the importance of improving our excellence in execution and how this is related to our success. Make this real for people, give an example of what you mean by driving greater excellence.



MS-CC-RN 000001217819 HIGHLY CONFIDENTIAL






3. I am feeling concerned with the announcement to give back $75 billion back to shareholders. It sounds as if we could not find better ways to invest the money in growing the company.

(Core question: Evolution and Innovation: Why did you do the dividend? What does it say about the company?



4. How are we doing vs, Linux? Can you give us some specific comparables so we know where we are winning, holding our ground and still losing ground? Do you see a threat from Linux in the home PC market?

(Core question: Winning: Will we win in our competition with OSS?



5. As MSFT is a maturing company, certain priorities have seemed to change - the cost cutting initiatives being one of them...what are your concerns about the type of message that things like cost cutting send to employees? Meaning, are we sending the message that working for MSFT is like working for GM - a big stodgy corporation?

(Core questions: Evolution is all the cost cutting evidence that we becoming a stodgy corporation?)



6. Cross group collaboration consistently rates as one of the lowest scoring areas within Microsoft on the Company poll, and one would assume that to keep organization structures eams out of our designs it would need to be one area where Microsoft must excel, What steps are we taking to make sure that Microsoft’s organization structure is also not showing through in the design of our products? Do you feel these steps are sufficient and how (Io you think we are doing?

MS-CC-RN 000001217820 HIGHLY CONFIDENTIAL






Joint Questions ___________________________________________________________

1. What are the 3 crucial things you want employees to focus on in FY05 for our collective success? What will you do to ensure that we can execute on those 3 crucial things?

1. innovation and Growth 2. Business Performance: 3. How we work: Excellence

2. You talk a lot about commitments. Do you have specific commitments? - Bill and Steve to talk to their commitments (from offsite) - Key commitments that other execs are responsible for.

3. What is your vision for the company in ten years, and what is it in 20 years? - Continuing to invest, making big, strategic bets and doing innovative work - Bringing in talent that ensures we have necessary abilities to seize opportunities - Maintaining the dynamic environment

MS-CC-RN 000001217821 HIGHLY CONFIDENTIAL




[skipping pages 6-11 (see PDF)]




[...]

4. How are we doing vs. Linux? Can you give us some specific comparables so we know where we are winning, holding our ground and still losing ground? Do you see a threat from Linux in the home PC market?

(Core question. Winning: Will we win in our competition with OSS?



MS-CC-RN 000001217828 HIGHLY CONFIDENTIAL






[skipping page 13 onwards (see PDF)]


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