Dear Bill,
I'd like to explain why I think that the smartest thing you could do would be to settle the case with the government and resign from Microsoft. If you did that, it would be a win-win.

I have been following your career since you and others developed a version of Basic, through your first big break when IBM selected you to produce its OS rather than Gary Kildall's Digital Research, and onwards and upwards through the Windows experience. Gary Kildall incidentally told me the true story about how his CP/M was ripped off and became MS-DOS: this differs significantly from the version (how Gary was supposedly out flying when IBM came calling) that with your help has become a legend.

But you were there, and I want to make the point that I know you were one of the pioneers, and that you did play a significant part in the early development of microcomputers. Your subsequent career since Windows is better-known, even though the truth has been "improved" from time to time. You have succeeded beyond your wildest dreams at Microsoft, and you deserve much - but not all - of this success. The current legal aggravation is not going to go away. Indeed, the arrogance with which you and Steve have been criticising Judge Jackson's Final Judgement is only going to make matters worse. Did you see that California attorney general Bill Lockyer pointed to your comments after the Judgement and said that it "shows their unwillingness or inability to understand what the damage is about". It is unwise to antagonise Silicon Valley's attorney general.

Bill: you must face reality. You must appreciate that Microsoft's way of doing business will no longer be tolerated by your competitors, that the DoJ will dig its heels in and do its best to stop any future law breaking. This is not just a case of a "disagreement" with the DoJ over IE being included with Windows, as you claimed last week. We both know that Judge Jackson made a mistake in not calling you to task for making it impossible for Netscape to distribute copies of its browser cost-efficiently.

In your press conference after the Judgement, you claimed that "the Internet and support in Windows could never be enhanced, it could never be updated to new standards, whether they relate to privacy or XML or any other consumer needs." You know this is untrue, and that in essence this is a blackmail threat to users.

You also know that the Microsoft argument about being "a unitary company" is meaningless semantics, and that the real issue is that you do not like the prospect of Microsoft being split into two companies. I can understand that: it's worse than any fine, had that been on the cards, because it will effectively stop your monopoly leverage and put Microsoft back to competing on merit. That's how most of the world works, by the way.

As you admitted, you should have paid more attention to the videotaped depositions, but had you given evidence at the trial, this would have been a disaster; you no doubt remember your cross-examination during the Stac trial.

Lawrence Lessig, who was to have been Judge Jackson's Special Master, wrote to you recently about the remarks attributed to you in Time magazine last month. In a gentle way, he pointed out that you have lost the argument about innovation by chilling any development that might threaten Windows. He also asked you to detail how separating Windows and applications would interfere with innovation. You know you have no good reply to this.

Your contribution to Microsoft nowadays is certainly not a technical one, but rather as chief evangeliser. But you would bring more kudos on Microsoft as a philanthropist - and I suggest you would find it personally more rewarding - than to continue in your present roles. You've become a mascot at Microsoft: your technical contributions are small compared with your considerable understanding of how to leverage your software against competitors, but this will no longer be tolerated. You are not indispensable. Microsoft software needs a makeover that you cannot achieve in you role as chief software architect because you are of a previous generation. It's tough for us oldies at times (you going too then Graham? - Ed).

Quit now, for the sake of your own health, before the burn-out and other problems become more apparent. There is a danger that this case could make you into a latter-day Howard Hughes, if you pursue it to the end.

With your politicised judiciary, the final outcome is a lottery, but as we both know, your real objective is to bog the case down as long as possible so that the result does not ultimately matter. And if push comes to shove, you would not like being able to run only one of the Baby Bills.

The appeal process is going to alienate your customers increasingly, and the media will make your life very uncomfortable. The smart move now would be for you to put your resignation from Microsoft on the table and negotiate personally with the DoJ to get the best deal you can. Involve Judge Posner again, if he's willing to help. Judge Jackson has said very clearly that he would like to see a negotiated settlement, so even if the DoJ did not agree the last mile, you have a good chance of getting the judge to order the best settlement you could get in the circumstances. If you do this, you would emerge as the saviour of Microsoft in the eyes of your employees, customers, and shareholders. There could be no better outcome. You could then throw yourself into charitable work, where your family has a fine tradition.

I saw the reports last week about your giving out scholarships to the first batch of 20 minority students from a billion dollar programme established by your Foundation, and what a happy time it was for you. I read too how you had tears in your eyes when you were talking about this the next day, and your saying that it was the most exciting thing you'd done all week. I believe you.

You are at the moment admired by most Americans, because they equate financial success with being smart, although here in Europe the reverse is more often true. You are no politician, but you have the politicos eating out of your hand. I watched the Webcast of your appearance before the Joint Economic Committee of Congress last week. It was good, but remember they flattered you because you were the entertainment, not because of your remarks about piracy or data privacy.

Give up trying to be an industry campaigner, and become a campaigner for a better America. After all, basic healthcare is unavailable to many of your fellow citizens because they cannot afford the astronomically high insurance contributions. Urge change in the system, which reflects badly on America as a compassionate country. Continue working for better education for all, and for a better world. Your Foundation has started to do some sterling work in these areas.

After all, if you do negotiate a settlement with the government, and then retire from Microsoft to devote yourself to philanthropic work, the best will truly be yet to come.

Yours sincerely

Graham Lea