Bonum Certa Men Certa

Why Microsoft Will Not Embrace GNU/Linux (to Replace Windows)

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Summary: The Bill Gates deposition shows that Gates was aware Windows had become a market monopoly and sought to leverage that to push whatever "killer app" he thought would shield Microsoft's monopoly; those tactics never changed (here's an example from two days ago: "Microsoft is foisting Office web apps on Edge users")

THE Bill Gates deposition was recently revisited here. As promised, it would be followed by scrutiny of what he had said. A lot of what's in the transcripts is still very much applicable to the present. “This anti-trust thing will blow over," he famously said. "We haven’t changed our business practices at all.”

"...we'd like to show why an embrace of Linux (except in the "Extinguish" as in E.E.E. sense) is very improbable; it's counterproductive to the "common carrier" strategy."In response to some recent nonsense from ESR and SJVN (which the corporate media was more than happy to spread widely), we'd like to show why an embrace of Linux (except in the "Extinguish" as in E.E.E. sense) is very improbable; it's counterproductive to the "common carrier" strategy.

Part one is shown above. We'll turn to the text version of it. Let's skip to the part where he says this (highlighted in yellow, with context included):

20 Q. Does Microsoft endeavor to track its
21 market share with respect to operating systems on
22 personal computers?
23 A. There's not some unified effort to do
24 that.
25 Q. Is there anybody in Microsoft

1 responsible for trying to determine what Microsoft's
2 market share is with respect to PC operating systems?
3 A. No.
4 Q. Have you seen any figures indicating
5 what Microsoft's market share is with respect to
6 operating systems on personal computers?
7 A. From time to time people doing
8 marketing analysis may pull together some figures
9 like that. And depending on, you know, what the
10 context is, they will be different numbers.
11 Q. Do you have any -- strike that.
12 MR. HOUCK: I'd like to mark as
13 Exhibit 338 a Fiscal Year 1996 Midyear Review dated
14 January 22, 1996.
15 (The document referred to was marked
16 by the court reporter as Government Exhibit 338 for
17 identification and is attached hereto.)
18 Q. BY MR. HOUCK: Is Exhibit 338 the type
19 of document you referred to that contains market
20 share information?
21 A. I don't know anything about 338.
22 Q. Have you ever seen it before?
23 A. No.
24 Q. Do you know what position Joachim
25 Kempin held in January, 1996?

1 A. Yes.
2 Q. What was his position at that time?
3 A. He is in charge of our relationships
4 with hardware manufacturers.
5 Q. Do you have any understanding that in
6 connection with that position he endeavored to
7 determine what Microsoft's market share was with
8 respect to operating systems sold to hardware
9 manufacturers?
10 A. I'm sorry, say that again.
11 Q. Do you have any understanding that one
12 of Mr. Kempin's job responsibilities in that
13 connection in 1996 was to try to determine what
14 Microsoft's market share was with respect to
15 operating systems sold to hardware manufacturers?
16 A. No.
17 Q. I'd like you to turn to the page of
18 this document that ends in 022. And the heading
19 reads "x86 OS Analysis for Fiscal Year '96."
20 A. Okay.
21 Q. On the page that is titled "x86 OS
22 Analysis for Fiscal Year '96" appears a statement,
23 "All other competitive licenses, less than 5%"
24 Do you have any understanding that in
25 or about early 1996 Microsoft's share of the market

1 with respect to operating systems sold for x86
2 computers was in the vicinity of 95 percent?
3 A. No.
4 Q. What is your understanding of what the
5 Microsoft market share was at that time?
6 A. I wouldn't know.
7 Q. Do you have any idea, as you sit here
8 today, what Microsoft's market share is with respect
9 to operating systems sold for x86 architecture
10 computers?
11 A. Well, piracy alone is greater than 5
12 percent. But no, I don't know the number.
13 Q. What other companies besides Microsoft
14 sell operating systems for x86 architecture
15 computers?
16 A. There's a great number.
17 Q. Can you identify them?
18 A. Santa Cruz. Red Brick. Caldera. IBM
19 in many different products. Sun Microsystems.
20 Microware. Wind River.

21 Those are all I can think of right now.
22 Q. Do you have any estimate as to what the
23 collective market share of those companies is with
24 respect to operating systems sold for x86
25 architecture PCs?

1 A. No.
2 Q. Is it under 10 percent?
3 A. Well, I've said to you I don't know the
4 numbers.
5 Q. Can you estimate it?
6 A. Actually, I know something about
7 piracy. Are you including that or not?
8 Q. No, sir. My question was, you've
9 identified a number of companies that market
10 operating systems for x86 PCs; correct?
11 A. Yes.
12 Q. And the question is, do you have any
13 understanding at all as to approximately what their
14 collective market share is with respect to operating
15 systems sold on x86 machines that come equipped with
16 operating systems?
17 A. I wouldn't be the best source for that
18 data.
19 Q. Can you answer my question?
20 A. I don't know their market share.
21 Q. You are unable to estimate it; is that
22 right?
23 A. I don't think I'd be accurate in
24 guessing and I don't think it's a good idea to guess.
25 Q. You have no idea whatsoever as to

1 approximately what the market share is; is that
2 correct?
3 A. I'm reluctant to give a number because
4 I don't consider myself someone who knows the volumes
5 involved.
6 Q. You have no understanding whatsoever as
7 to the approximate market share these companies have?
8 A. Are you asking me for a number or just
9 a --
10 Q. I'm asking for your best --
11 A. If you're asking does Microsoft sell
12 more than they do, yes, I can safely say that. But
13 when you say to me what is their share, which I
14 thought was one of the questions you asked, I'd say
15 it's not good for me to guess at the number.
16 Q. Do you have any understanding as to
17 whether the collective market share of those
18 companies is under 20 percent?
19 A. What time period were you talking
20 about? I guess I should -- what time period are you
21 saying?
22 Q. Fiscal year 1997. Do you have any
23 understanding whatsoever as to whether or not the
24 collective market share of all of Microsoft's
25 competitors in operating systems for x86 PC machines

1 is under 20 percent?
2 A. It's probably under 20 percent.
3 Q. Okay. Any idea how far under?
4 A. No.
5 Q. Who is the author of documents you've
6 seen at Microsoft with respect to market share
7 information on operating systems?
8 A. I've told you there is no one whose
9 particular responsibility it is to track those
10 figures, so I'm not sure what documents you're
11 referring to.
12 Q. Correct me if I'm wrong, but I thought
13 you said you had seen documents that contained market
14 share information; is that right?
15 A. I've seen documents where people
16 attempt in some context to estimate various numbers.
17 Q. And what people are you referring to?
18 A. I'm just saying I've seen documents
19 like that. I'm not saying any particular --
20 Q. Do you know who authored those
21 documents?
22 A. No.
23 Q. Do you recall what unit of Microsoft
24 they came from?
25 A. They could have come from the product

1 groups or the sales and marketing groups.
2 Q. Do you have any understanding as to how
3 the folks who prepared those documents go about
4 tracking Microsoft's market share?
5 MR. HEINER: Objection. Misstates the
6 testimony.
7 THE WITNESS [Gates]: Well, I think IDC and
8 Dataquest are examples of firms who are in the
9 business of trying to measure the size of various
10 product sales. And so sometimes we might look at
11 their numbers. I think the Microsoft library
12 subscribes to a number of services that are in the
13 business of trying to guess at numbers.

14 MR. HOUCK: I'd like to mark as
15 Exhibit 339 a memorandum or e-mail from Anthony Bay
16 to Ben Slivka dated October 25, 1994.
17 (The document referred to was marked
18 by the court reporter as Government Exhibit 339 for
19 identification and is attached hereto.)
20 Q. BY MR. HOUCK: Would you take a look at
21 Exhibit 339, Mr. Gates. Exhibit 339 contains a
22 number of e-mails, and I want to ask you a couple
23 questions about one on the first page from Russell
24 Siegelman to yourself and others re MCI as an access
25 provider dated October 13, 1994.

1 Do you recall receiving this e-mail?
2 A. No.
3 Q. Do you have any reason to believe you
4 didn't get it?
5 A. No.
6 Q. What was Mr. Siegelman's position in
7 October of '94?
8 A. He was involved with looking at Marvel.
9 Q. And what was Marvel?
10 A. It was a code name for what we would do
11 in terms of Internet sites or online service
12 activity.
13 Q. Do you understand that in this e-mail
14 here Mr. Siegelman is opposing a proposal to give MCI
15 a position on the Windows 95 desktop as an Internet
16 service provider?
17 A. I don't remember anything about MCI.
18 This talks about how we'll have a Mosaic client in
19 Windows 95. I don't see anything in here about the
20 desktop.
21 Q. It references in this e-mail the
22 Windows box. What do you understand the Windows box
23 to mean?
24 A. Well, the Windows box is certainly not
25 the Windows desktop. The Windows box is a piece of

1 cardboard.
2 Q. Is it your understanding that when he
3 uses "Windows box" here, he means a piece of
4 cardboard?
5 A. Well, he is probably talking about the
6 stuff that's inside. He is saying access to the
7 Windows box. He is talking about the bits that are
8 on the --
9 Q. What do you understand to be the
10 subject of the memorandum here that he is addressing?
11 MR. HEINER: Mr. Houck, you're at risk
12 here of cutting off the witness.
13 MR. HOUCK: I'm sorry.
14 MR. HEINER: Or I should say you did
15 cut off the witness.
16 MR. HOUCK: I apologize if I did. I'm
17 just trying to move this along, but if I cut you off,
18 I apologize.
19 MR. HEINER: Can we have the last
20 question and answer read back.
21 (Record read.)
22 THE WITNESS: This is electronic mail
23 and Russ is suggesting that he disagrees with doing a
24 deal with MCI under these particular terms.
25 Q. BY MR. HOUCK: In the e-mail he refers

1 to Windows distribution as a unique and valuable
2 asset, more specifically as "our one unique and
3 valuable asset." Do you see that?

4 A. I see a sentence that has those words
5 in it.
6 Q. Do you have an understanding as to what
7 he meant?
8 A. Well, the Marvel people were having a
9 hard time coming up with a strategy, and in
10 retrospect we can look back and say they didn't come
11 up with a good strategy. And they were looking at,
12 you know, what could they do that would be attractive
13 to a lot of users. And sometimes their goals and the
14 goals of the Windows group were different. And in
15 retrospect it's clear they weren't able to attract a
16 lot of users.
17 Q. Mr. Gates, I indicated at the outset of
18 the deposition I do want to move through this
19 deposition as quickly as possible, but I must say I
20 think your answers are nonresponsive and rambling,
21 and if that continues to be the case, I'm just
22 letting you know this is going to take much longer
23 than I would have hoped.
So I'll pose my question
24 again because I think your answer was nonresponsive.
25 Do you have any understanding as to

1 what Mr. Siegelman meant here by his reference to
2 Windows distribution being "our one unique and
3 valuable asset"?
4 A. Was that the question I was asked --
5 Q. Yes, sir.
6 A. Can you read me back the previous
7 question?
8 (The record was read as follows:
9 "Q. In the e-mail he refers to Windows
10 distribution as a unique and valuable asset,
11 more specifically as 'our one unique and
12 valuable asset.'
Do you see that?
13 "A. I see a sentence that has those
14 words in it.
15 "Q. Do you have an understanding as to
16 what he meant?"
17 THE WITNESS: Well, maybe there is some
18 understanding -- you said do I understand what he
19 meant. I thought you were asking about his e-mail as
20 a whole.
21 Q. BY MR. HOUCK: Let me reask it for the
22 third time and see if I can get an answer.
23 Do you have any understanding what
24 Mr. Siegelman meant when he referred to Windows
25 distribution as our one unique and valuable asset

1 MR. HEINER: This is a line of
2 questioning about the mail that Mr. Gates does not
3 recall reading; is that right?
4 MR. HOUCK: The question has been put.
5 THE WITNESS: I think the Marvel group
6 in their search for what they could do to get
7 millions of users at this particular point in time
8 was thinking about making it easy to sign up to the
9 Windows box being something that would be helpful to
10 them and therefore an asset for the Marvel group in
11 what they were doing.
12 Q. BY MR. HOUCK: Do you understand that
13 Mr. Siegelman in his reference had in mind the large
14 market share that Microsoft has with respect to
15 operating systems?
16 A. I don't see anything about that in
17 here.
18 Q. That's not your understanding?
19 A. Remember, Russ isn't involved with the
20 Windows business, he is involved with the Marvel
21 business.
22 Q. Do you consider Windows distribution a
23 unique asset of Microsoft?
24 A. I know that the inclusion of what
25 Marvel became didn't lead to its being popular.

1 Q. Again, let me ask the question,
2 Mr. Gates. I wasn't asking about Marvel. I was
3 asking about Windows distribution.
4 A. Well, Marvel was a thing that was put
5 into the Windows box and so, in fact, if the question
6 is is putting things in there, is that valuable in
7 the sense that it creates popularity for those
8 things, there are many good examples that we know
9 where it obviously does not create popularity. So in
10 terms of how much of a value that is, it's very
11 instructive to look at Marvel and what subsequently
12 happened to that because we did include it in the
13 Windows box as one of the things that the user had on
14 the desktop.
15 MR. HOUCK: Move to strike the answer
16 as nonresponsive
17 MR. HEINER: Mr. Houck, I'm afraid that
18 if you ask a question with vague terms, you may get
19 answers that you don't like, but that was a very
20 responsive answer to the question.
21 Q. BY MR. HOUCK: Let me put the question
22 again without reference to this document. Mr. Gates,
23 do you believe that Windows distribution is a unique
24 asset that Microsoft has?
25 MR. HEINER: Objection. Form.

1 Foundation. Defined terms.
2 THE WITNESS: What do you mean when you
3 say "Windows distribution" there?
4 Q. BY MR. HOUCK: Do you have an
5 understanding what Mr. Siegelman meant by the phrase
6 "Windows distribution" in his e-mail that he wrote to
7 you?
8 A. He means -- I think he means, I don't
9 know for sure, I think he means including an icon on
10 the desktop for access to Marvel.
11 Q. And by "the desktop," you mean the
12 Windows desktop?
13 A. In this case, yes.
14 Q. He goes on in the e-mail to say as
15 follows: "The only real advantage we have in this
16 game is Windows distribution. Why sell it so cheaply
17 when we think is will be a big market and can give us
18 leverage in so many ways in the Iway business."

19 Do you have any understanding what he
20 meant by the phrase "Iway business" here?
21 A. No. I've never -- I don't remember
22 ever seeing that term before.
23 Q. What distribution channels has
24 Microsoft employed to distribute Internet Explorer?
25 A. Well, the primary distribution channel

1 is the Internet where people very easily download
2 whatever version of Windows Internet technology
3 they're interested in.
4 We've also distributed it through
5 retailers, the Windows 95 update product and, you
6 know, wherever Windows goes out, which includes
7 retail, OEM. And then people who do Internet signups
8 have also done some distribution. There's a lot of
9 different marketing programs where we'll have like a
10 conference and we'll make available Internet Explorer
11 to people that attend the conferences.
12 I think we've also included it with
13 Microsoft Office in some cases.
14 Q. Has Microsoft done research to
15 determine which distribution channels are most
16 effective in delivering browsers that are actually
17 used by people?
18 A. I think somebody did a survey to ask
19 people where they get their browser at some point.
20 Q. Do you have any recollection who did
21 that survey?
22 A. No.
23 Q. Do you recall what the results were?
24 A. I know the Internet has always been the
25 primary distribution channel for browsers.

1 Q. You're talking about specifically
2 Internet Explorer?

The key parts we've highlighted above make up the realisation and recognition that Windows monopoly comes before everything else.

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