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Godfather Gates irate at IBM's lack of ‘respect’

Bizarre wish that Gerstner pay tribute to MS technology (sic)

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MS on Trial Microsoft attorney Pepperman was last week determined (or under orders) to exact some revenge for what Microsoft saw as IBM's lack of respect. He produced an internal IBM memorandum dated 24 July 1995, shortly before the launch of Windows 95: "A general point is their perception of IBM's non-respect for Microsoft. Gates was irate because of the lack of respect he feels IBM has for Microsoft. He cited Lou Gerstner's quote in Business Week that Microsoft was a great marketing company, but not a great technology company, as an example". Pepperman noted that the memorandum said that "Gates also cited, 'smear campaigns' planned by Dan Lautenbach and others against the Windows 95 product." Norris was pressed about the smear campaign, but pointed out that "smear" was Gates' word. He told Pepperman: "What I'm trying to... relate to you is the fact that we did marketing promotions and marketing campaigns for OS/2 during this time frame. If you refer to them as 'smear', that's one thing. If we refer to them as normal marketing competitively, that's another." Pepperman dug out an article from Computer Dealer News, 8 March 1995, that said: "When IBM launched OS/2 Warp, the latest version of its operating system, last September, it also distributed a remarkable document entitled 'OS/2 Warp versus Windows 95.' It is subtitled 'a decision-maker's guide to 32-bit operating system technology'. What is unusual about it is the lengths it goes to in touting the superiority of the OS/2 and the way in which it denigrates its competitor. From the first sentence in the document, IBM launches into attack. 'This document is designed to provide the corporate decision-makers with the benefits of OS/2 and information about critical weaknesses in Microsoft's forthcoming Windows 95 operating system.' " At least there was no doubt about the source of the magazine's advertising revenue, or the influence that Microsoft PR was able to bring to bear on the editorial content. Norris did his best to even things out by insisting on reading into the record the context of Pepperman's highly selective quotations, such as: "So what about Chicago [Windows 95]? Good question. With one foot still buried in the DOS/Windows grave, Chicago is yesterday's technology dressed-up to look like tomorrow's 32-bit OS/2. Why wait for an impostor? OS/2 is here today, and represents the real future in personal computer operating systems." Norris seized the initiative: "You asked me as to whether or not we were engaged in a public campaign to disparage Windows 95 from this document. "And then you read from the bottom three paragraphs without going on to the next paragraph that... goes on to talk about all the salt that Microsoft rubs into the wounds, stating, 'the OS/2 applications market is small and getting smaller. Windows applications account for almost 60 per cent of all dollars spent worldwide on applications software.' And then the document goes on to talk about how the two were engaging in a fight between OS/2 and Windows." It is symptomatic that Microsoft still wished to play a propaganda game for its remaining supporters while the sand runs through the hourglass of inevitable legal doom. At the time, Microsoft was waging the greatest marketing blitz in the history of computing, with nothing being allowed to detract from its Windows 95 campaign. Gates was evidently peeved that Gerstner had not come to kowtow at his court during the summer of 1995, despite several requests from Microsoft that were orchestrated by Kempin, who seemed to be taking on himself the mantle of chief of protocol. IBM suggested that a Thoman-Gates meeting as a first step. Dean Dubinsky from IBM's Kirkland, Washington office recorded current sentiment in an email to Norris in November 1995: "Neither IBM or Microsoft is satisfied with the current relationship as it stands. Microsoft believes that IBM is out to annihilate Microsoft, and this perception, (reality), has made any co-operation almost impossible. At a minimum, Microsoft would like IBM to stop 'disparaging their products in public'." Pepperman dwelt on this, trying to suggest that this was Dubinsky's belief, rather than a report of what Dubinsky had found out from Microsoft. Judge Jackson called 'time' and told Pepperman he thought he had "exhausted that line of enquiry". ® Complete Register trial coverage

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