InformationWeek

August 29, 2000

Your letters to my print column and this E-mail forum ask some serious questions about managing information technology in today's world. Since today's world is essentially absurd, my serious responses may sometimes sound a little whimsical, and my occasional whimsical ones, serious. In any case, if you want to participate, write to me at lovelace@home.com. I'll respond to those letters that I can. I reserve the right to edit for size and content. Just sign your E-mail the way you want it to appear online.

Dear Herbert:
Regarding your three Microsoft remedies in "What Now, Mr. Gates?: The first one, publishing the applications program interfaces, would require continuous supervision in order to be sure none of the "secret"(undocumented) API functions that Microsoft has used in the past continue to exist. Still, it is a great idea, as is your second suggestion (uniform pricing).

The third one (stopping cross-subsidization of product development) sounds good, but is it enforceable in practice? I am an engineer, not a finance type, but is it not difficult in practice to separate out developments costs? I've seen a lot of fudging over the years on categorizing costs to suit official budgets. For example, in my years doing Department of Defense work, the so-called IR&D budget, which used to be 70-80% government reimbursed, was full of product improvements labeled as research. I can give very specific examples such as changing the number of poles on an electric motor driving a scanning mirror (labeled as R&D). My point is that in a complex enterprise, it might not be hard to hide cross-subsidizing. It might not even be a conscious choice, just the natural result of competitive pressures.

Good column.

David Lees
DEBL Associates

Dear David:
Thanks for your comments. The problems that you mention are all valid, but capable of being managed, I think, without a lot of undue effort.

The last point that you mention, cross-subsidization, is the most difficult issue to handle. Making sure that there is no cross-subsidization of product development is, indeed, a large potential stumbling block in what I propose. In fact, back in the days of the AT&T breakup, one of the big concerns was that no matter what was done, short of a separation into the Baby Bells, AT&T would play games with using revenue from one service to help another.

I think, however, that there is a relatively straightforward way to ensure that Microsoft doesn't practice the wonderful art of using money from one pocket to pay for developing products that should be funded from another. The answer lies in providing incentives to the participants at the working manager level to play it straight. Make sure that each business group cross-charges the other units for the work done--and give each of these units bonuses based on their profit contribution, which of course include the amount made on cross-charging. Watch how fast and effectively it works. There will be little tolerance for game-playing when that new BMW 740i depends on whether or not the other guy is paying his or her fair share.

As to your first point, I can understand your concern about the amount of government supervision it would take to ensure that Microsoft shares its applications program interfaces. However, I think that there is a simple way--one that doesn't require a lot of governmental intervention--to make sure that Microsoft doesn't "forget" about publishing all of its APIs. The solution is to have an ongoing little contest. Not original with me, but it should take care of enhancing the corporate memory of the folks in Redmond. Here's the drill: Each person who finds an undocumented API winds up with $20 million, courtesy of Mr. Gates' favorite company. I'll bet that my version of a Easter Egg hunt, which I call, less than originally, "Who Wants to Be a Multi-Millionaire" would be really popular. Do you think we could get MSNBC to broaden its programming to cover it?

Mr Lovelace:
I enjoyed your column "What Now, Mr. Gates?" on Microsoft and your proposed remedy.

I think some other remedies are also required. Microsoft shouldn't be allowed to force bundling of its products. I recently purchased two Dell desktops to be used as servers and didn't need or want Windows 98, Office 2000, or Microsoft Publisher. But I had to accept and pay for them. I think there is a need to prohibit Microsoft from forcing hardware companies to automatically bundle any Microsoft product with its hardware. I think hardware companies should offer bundles, but only as an option with a price tag attached. I have met a number of people who think that Microsoft Word is part of Windows itself and therefore buying any other operating system means you won't be compatible (e.g. they don't realize that Office 98 is available for the Macintosh).

Microsoft should also be prohibited from announcing vaporware. I'm not sure how to enforce this except that MS must show that it has been working on a project for x months before making a public announcement.

And Microsoft product boxes must be only large enough to hold disks and manuals. No extra-large boxes pushing competing products off of retailers' shelves through pure bulk. This is less of an issue than it used to be, but many people's impressions of what is available is shaped by the CompUSA software shelves.

Enforcement of the above must also be defined. Remember when the Justice department last made a deal with Microsoft? Beforehand, Microsoft talked about a "Chinese wall" between operating systems and applications groups. After the deal was made, it said "of course there was never any such a wall." I think violations of any agreement must be tied to jail time by Microsoft executives in a super-max prison with no weekend furloughs.

Paul Chernoff
Systems Manager
Washingtonian Magazine

Answer Dear Paul:
Given that the Microsoft case may be with us for a long time, good ideas should be encouraged and several of yours would help provide more competition in the industry. For example, there's no doubt in my mind that software pricing should be unbundled from hardware sales. It shouldn't be legal for Microsoft to either use threats or provide incentives to computer manufacturers to discourage the sale of competing software. I also very much like the idea of making sure that the box isn't bigger than necessary to hold the disks and manuals. I missed the problem of driving competition off of the shelves by space management and I should have seen it.

So far as keeping Microsoft from announcing vaporware: Just because the Redmond dudes have been working on something for a long time doesn't mean that it's still nothing more than a gleam in someone's eyes in their marketing department. Recognizing that a Microsoft announcement (with the company's typically wildly optimistic delivery date) can freeze the purchases of competing products, a better solution might be to issue big fines for Microsoft for each day it's late with the product and the features it's touting. To make sure that this process works, however, it will be up to consumers to abstain from first-purchaser syndrome should Microsoft decide to hurry and release the software with more bugs than usual (a process hard to imagine) to avoid the fines.

The only idea of yours with which I really disagree, is the one about sending "Microsoft felons" to jail. As you know, they have stated repeatedly that their actions are in the best interests of the public. Who are we to disagree? Therefore, I would prefer putting them in a room, feeding them only bread and water (no free Cokes, etc), bombarding them with multiple decibels of the word "Innovation" repeated endlessly, and requiring them to re-code Windows until it is bug-free.

Dear Mr. Lovelace:
Your comment in "What Now, Mr. Gates" about having something other than Microsoft products to provide to your employees makes me think:

If I could provide you with free software which provides 100% of the functions used by 90% of your employees, and doesn't require re-training those employees, gives them the same look and feel that they're used to, and allows you to avoid the cost of continuous upgrade payments to Microsoft, what would you say?

No, it's not Linux, it is StarOffice from Sun Microsystems. You most likely won't touch this with a 200-foot pole because you are tied to the Microsoft product line. You would consider the "free" cost to have some hidden expense. And you have no incentive to change from paying for the upgrades to Microsoft, because the compatibility factor would be just too large a risk to take.

However, you might consider trying the StarOffice application in a small group, on a trial basis. The cost would be low enough that after a suitable trial period (120-to-180 days) you can evaluate the cost, reliability and interoperability.

I'll be interested in your response to this idea.

David Barto
Director S/W Eng.
Machine Vision Products

Answer Dear David:
If we didn't have to communicate increasingly with people outside our own company, I'd go along with your idea. Even a little problem in being able to share information with business partners, suppliers, and clients can cost an organization a lot of money - even enough to rival what we pay in license fees for desktop software. Let's assume as you state that StarOffice does have 90% of the functionality of Office and is 100% compatible. The problem that scares CIOs is trying to figure out which 90% of functions are the ones that will be used and what would Microsoft do in their next version to make StarOffice noncompatible. Would our friends in Redmond do that to kill off a competitor? Can you buy a latte in Seattle? Did Bill get rich by being nice to his competition? If you doubt the fervor of Microsoft to protect what they see as their markets, take a look at how Internet Explorer 5.5 continues to diverge from Netscape, making it harder for compatibility to exist on the Internet. Even though Microsoft has won the browser war, it seems to work on the assumption that it's not enough to beat a challenger, you need to bury him. Is there any reason to expect that StarOffice would be treated any differently if it were to gain a substantial following?

Herbert W. Lovelace shares his experiences (changing most names, including his own, to protect the guilty) as CIO of a multibillion-dollar international company. Send him E-mail at lovelace@home.com.

NOTE TO READERS: As I've mentioned, I am planning to put my InformationWeek columns together into a book with a little bit of additional commentary around the events and people about whom I write. If any reader would like to be notified of such an event, please drop me an E-mail. Just use the word BOOK as the subject line.