It's time for the government to let honest competition rule the marketplace. Not surprisingly, that was the message of Microsoft's chief operations officer today. Bob Herbold began his address to the Hambrecht & Quist Technology Conference in San Francisco on something of a strange note. He said he wouldn�t be detailing Microsoft�s failures for the investment crowd. "They usually get reported in the press," he said.
But Herbold did mention "a legal issue" isn�t a failure in the Microsoft group-mind, if you consider the laws of transitive logic. The tiff in question, of course, is the current legal battle the company has been waging with the US Department of Justice.
The government charged Microsoft in October with violating a consent decree designed to prevent the company from using its market dominance to unfairly gain even greater competitive advantages. Now, new, broader antitrust charges are being considered.
At issue in the current case is whether Microsoft�s bundling of its Internet Explorer browser into the Windows 95 operating system is a violation of the 1995 consent decree. But what�s not clear is the implications the case carries for the upcoming release of Windows 98.
"We don't attempt to speculate," Herbold said regarding potential delays to the Win 98 shipping date that might occur following a new court order. "We read the same press as you do. We have had no such requests [to delay shipiment]." Windows 98 is currently scheduled to ship to manufacturers in mid-May, meaning a late June delivery to consumers. For now, Herbold is sticking to those dates.
That said, Herbold then put the full Microsoftian spin on the issue: It's a case, he said, of the government meddling with corporate innovation rather than one of antitrust violation. "The principle we are fighting for is that each and every company needs to have the ability to innovate ... to listen to their customers ... and to build (features) into their products. And may the best product win."
Herbold painted Microsoft's version of a bleak future for his audience. They were asked to imagine a world in which no bundling was allowed. What if, Herbold wondered, Microsoft did not integrate its browser and other products into its operating system?
"How would you like to load all the different capabilities? ... What the world wants is simplicity. [For you to] take new features and embed them so finely into your products ... That's what Microsoft believes should continue." Herbold added that heavily regulated industries tend to be short on innovation and pretty expensive for consumers.
The boyish-looking Herbold dressed solemnly for the occasion, wearing a suit. Whether consciously or not, he contrasted with usual polo-shirt look his boss Bill Gates typically sports at industry events.
The rest of his talk was spent trumpeting the success of other Microsoft products. But Herbold may have erred while discussing the release of Office 98 for the Mac. "That business is robust," he said, before throwing in the qualifier: "as robust as Apple's business is." The audience murmured a half-laugh, but the feathers of the Apple loyalists were ruffled.
Herbold said that over 100 software developers were signed up for "Team VCI" (that�s value chain initiative). Team members who�ve joined the Microsoft program pledge to make all of their software Windows NT compatible, and strive to make data tracking and sharing more efficient, especially for manufacturers. Herbold also described the new features of Windows 98 and said that the upgraded operating system will include DVD compatibility, more browsing capabilities, and the ability to hook up a television to presto-change-o the PC into a WebTV.
As for the future, Herbold mentioned research in 3D graphics and natural language and speech recognition. He continued the theme of Justice Department defensiveness: "Nearly every software vendor will want to integrate (those tools)."
But you know what Microsoft really wants: entry to every living room in America. Herbold gave the audience a glimpse of Microsoft's trek to this destination point, mentioning the company�s $1 billion investment in cable company Comcast Corp., its deal to get Windows CE into a number of set-top boxes to be deployed by Tele-Communication Inc., and other convergence plans.
And Herbold described the company�s vision of the future: "[T]he Internet should emerge as the next mass media. It will be a blurring of the Internet and TV. You'd better be ready for change."
