How to Settle the Microsoft Case
Friday, June 16, 2000 by Dave Winer.
Good morning! 
Yesterday I had a long talk with Brent Schlender, senior editor at Fortune. He spent eight days this month at Microsoft learning about NGWS, which will be formally announced next Thursday.
As with many conversations about Microsoft these days, this one wound up in court. Schlender, who has covered Microsoft since their IPO in 1987, senses that they're rushing the announcement, in preparation for a court-imposed breakup. I asked if he had any direct quotes, he said not, it was just an impression.
I said it's a shame that this situation is causing so much trouble at Microsoft. I sense it too. I was at Microsoft on Tuesday, and we had a Scripting News dinner in Seattle on Tuesday night, attended by quite a few Microsoft people, and the court decision and the trouble it's causing was totally on the front-burner. It's a shame because the problem could be solved now, before it gets much worse, which it will, imho, if Microsoft continues to fight.
I wanted to write a short piece, but this is getting long. To the point, I want to re-state a solution, in more detail, based on several conversations I've had in the last week. By all parties, I mean not just the defendent and the plaintiffs, but also users and developers, and possibly taxpayers. We could turn this lemon into lemonade. I believe there's a way to resolve the dispute, leaving Microsoft strong, and leaving the rest of the industry with a lot of new opportunity.
The basic premise -- I do not want to see Microsoft destroyed. But they're going to have to give up something that matters to them to keep that from happening.
Part one: BrowserCo
Instead of splitting Microsoft along OS vs application lines, do a more modest split, remove the browser from Microsoft, creating an independent company to continue the work of Netscape. The new company, call it BrowserCo, would be allowed to make an operating system, but Microsoft would not be allowed to make a Web browser, until a competitive market developed, and then only under very restrictive conditions.
It's a reasonably small engineering job to add APIs to Windows to allow the HTML rendering engine to be a plug-in. The user would be offered a choice of browsers, none of which would be pre-installed with Windows. The BrowserCo browser would be on the list, but it could not be the first choice for five years, to allow the browser market to recover.
Further, three years after the divestiture, BrowserCo would be free to merge with or acquire other companies. The settlement would include enough cash to fund expanded development of the browser during that period. After three years, the two companies are completely separate, and management of BrowserCo will either find a business model, or be subject to fierce competition, or the industry will have moved on and HTML browsing will no longer be considered a key technology. No matter what, the lack of a competitive environment in HTML browsers will have been alleviated.
Mozilla
There's a silver lining here, Mozilla. It's still a rough browser, but it's getting better, and like Microsoft, it's very focused on XML, and has a bunch of advantages over MSIE that relate to its ability to become more than just an HTML-over-HTTP browser. They also have an incredibly determined developer community, that like Microsoft, doesn't get as much respect as it deserves. If they sat down in a serious face-to-face, with no threat of anihilation, Microsoft people would find they have a lot in common with Mozilla people, and vice versa.
Remember that Mozilla is not owned by AOL. A browser-less Microsoft would be free to allocate resources to Mozilla and make it the first choice browser for Windows. That would possibly undermine BrowserCo, which would be very cool because it would enable competition, and would certainly get user and developer-oriented features into both browsers.
Part two: Windows apps on Unix
Part two of the proposed settlement -- Microsoft would have three years to make software that allows Windows applications to run on Unix systems. This transition would address the larger issue of Microsoft's control of application development, based on the assumption that non-HTML-based software will play an important role in the future of the Internet. This is no longer much of a theory, since chat, email, games, and Napster-like products all run outside of the browser. Many more such applications are coming.
Today, an open source project, WINE, does a good job of running Windows apps on Unix. With three years help from Microsoft, parity could be reached, and Microsoft's dominance in native apps would be erased, without a major disruption in the market or inside Microsoft, or in the developer world. I doubt if Microsoft would have much trouble recruiting an enthusiastic team of internal developers to work on this project. After all, it would be a key part of clearing the way for Microsoft to create new software, that runs everywhere, without supervision from lawyers. Microsoft truly does like to make software. Get rid of the politics, roll up your sleeves, we'll all help with this.
Note that getting Windows apps to run well on Unix would also give the Macintosh parity, since Apple is transitioning to a version of Unix in an upcoming version of the Macintosh OS.
This is all the divestment that's needed to address Microsoft's dominance of the operating system market, and it leaves Microsoft relatively whole, there's no split required along OS versus application lines, which has always been a vexing issue for the software industry, dating back well over two decades. What is an application and what is an OS? That's not such a simple question.
The smoking gun
Microsoft's dwindling group of supporters always omit the smoking gun, the email by Microsoft exec Jim Allchin, where he says that competing on features with Netscape isn't working, and that Microsoft must use its Windows monopoly to win the war. Had Allchin been punished or fired for making such a statement, Microsoft would be in the clear. Instead, Microsoft actually used the strategy, and while Netscape was a troubled company, in the end Microsoft got the market share it sought. In other words, the strategy, which is clearly illegal, appears to have worked.
Any thoughtful and reasonable person has to accept this, and that must include Microsoft management. That is what this case is about. Push all the rest of it aside, the case rests on this Microsoft practice, which until the trial, was theoretical. Now there's evidence and a judgment based on that evidence.
It would be unfair for the Court of Appeals or the Supreme Court to overturn the decision. To ignore it would leave the software and Internet industry at the mercy of Microsoft. They are a large company, but they're just one company, and the Internet is about more than companies, it's about free expression for individuals and other forms of human organization, that transcend the well-known limits of corporations.
In other words, there's more than technology happening here, and certainly more than one *brand* of technology, and ratification of the tying practice would result in a continued stifling of creativity and new structures for enterprise. If it were overturned, I'd argue, the taxpayers of the United States should get a lot of Microsoft stock, because we would be subsidizing them. We've probably been doing it for a long time, but now we have the means to stop it, not just at Microsoft, but at other market-dominating technology companies such as AOL and Oracle, and perhaps Sun and Apple.
To give Microsoft a pass is to give one to all other technology vendors that dominate.
What is Microsoft doing?
Microsoft appears to have a dual personality.
On one hand, they have been pioneering a new technology, that I have been closely involved with, that is truly revolutionary. Over the last few months it has gotten support from Sun and IBM, and many others, indicating that it's at least somewhat open. Something new and strange and possibly wonderful is going on, that would probably be brought to a halt or severely limited by a splitting of Microsoft. We need their attention, involvement and leadership as this technology moves forward.
On the other hand, there's a self-destructive side of Microsoft, that appears to be willing to go down with the ship. The stakes are so high now, to Microsoft management, this isn't only about right and wrong anymore, it's about the survival of your company and the next generation Web.
To the rest of us
This is a great time to think.
Do big corporations have a role as technology goes forward? If so, what is their role?
What would you be willing to give up to have open and fair competition in all aspects of technology?
What do you think?