Re: Crossgain Fires a Quarter of Its Employees

From: Dave Winer (
Date: Tue Jan 16 2001 - 07:24:23 PST

Rohit, thanks for the post. This is incredible. There's so much territory to
be explored in SOAP services. That Microsoft would want to sideline Bosworth
and Nielsen is a bad sign of how Microsoft expects to compete in this space.
Either of them would be welcome at UserLand, where we have no non-completes,
either way. I worked with Tod and Adam when they were at Microsoft --
friendly smart guys. Too bad MS is playing hardball, and too bad that their
VCs didn't stand behind them. Dave

----- Original Message -----
From: "Rohit Khare" <>
To: <>
Sent: Tuesday, January 16, 2001 1:17 AM
Subject: Fwd: Crossgain Fires a Quarter of Its Employees

> This is really sad and pathetic on MSFT's part, and an embarrassment
> for all concerned, including Benchmark. This is practically
> Justice-worthy, but probably not in a Bush administration... My best
> wishes to all who were involved, and that they may compete again --
> with all of us! -- on a level playing field... Rohit
> >
> >January 16, 2001
> >
> >Crossgain Fires a Quarter of Its Employees,
> >As It Faces Legal Pressure From Microsoft
> >Staff Reporter of THE WALL STREET JOURNAL
> >
> >
> >Crossgain Corp., a high-profile Web start-up facing pressure from
> >Microsoft Corp., abruptly fired about a quarter of its employees in an
> >attempt to cool tensions with the giant software company, people
> >familiar with the matter said.
> >
> >Software Defectors From Microsoft Resettle Together to Form 'Spinouts'
> >(Oct. 16, 2000)
> >
> >New Web-Software Start-Up Is a Thorn in Microsoft's Side (Sept. 11,
> >2000)
> >
> >* * *
> >Company Profile: Microsoft
> >
> >The unusual action Monday affected more than 20 of Crossgain's 80
> >workers, all of whom were former employees of Microsoft, including
> >Crossgain's two founders and its chief executive officer. Employees were
> >told they were being terminated until the expiration of noncompete
> >agreements they had signed at Microsoft, after which time they could be
> >rehired by Crossgain, according to people familiar with the matter.
> >
> >Crossgain had attracted unusual attention because it is working on new
> >Internet-based standards and tools for software developers. That is an
> >area that is central to Microsoft's new, make-or-break Web initiatives,
> >which must succeed for Microsoft to stay dominant in the software
> >industry.
> >
> >Microsoft declined to comment on the Crossgain matter. But the people
> >familiar with the situation say senior Microsoft officials continued to
> >be angry at the prospect that Crossgain employees might improperly
> >compete with their former employer.
> >
> >The situation also highlights Microsoft's broader worries about a brain
> >drain that has siphoned off some of its top technical talent, despite
> >recent signs that some defectors are now returning to Microsoft from
> >failed dot-com start-ups.
> >
> >Crossgain, based just a few miles away from Microsoft in Redmond, Wash.,
> >was founded in February 2000 by Adam Bosworth and Rod Chavez, both
> >former Microsoft managers who specialized in a hot Web technology known
> >as XML, for extensible mark-up language. The company received $10
> >million in funding from two prominent Silicon Valley venture-capital
> >firms, Benchmark Capital and the Barksdale Group.
> >
> >Other former Microsoft engineers who had signed noncompete agreements
> >also were hired. Crossgain executives argued that it didn't directly
> >compete with Microsoft, though Microsoft officials were skeptical about
> >that claim, the people familiar with the situation said.
> >
> >Crossgain employees were told at a meeting called by company officials
> >Monday that they were being terminated until the expiration of the
> >noncompete agreements with Microsoft, which usually extend for a year,
> >these people said. It isn't clear whether the agreements expire at a
> >different time for each employee or if they all expire at a particular
> >date.
> >
> >In addition to the terminations, Mr. Bosworth and Mr. Chavez resigned,
> >as did CEO Tod Nielsen, another well-known former Microsoft manager who
> >left the giant last June.
> >
> >Crossgain declined to comment. But the development is clearly a blow to
> >the start-up, which still hasn't released its technology or described it
> >in detail.
> >
> >Though scores of new companies have been formed by Microsoft refugees,
> >Microsoft executives were believed to be especially perturbed by
> >Crossgain, the people familiar with the matter said. It didn't help
> >matters that Crossgain got funding from the Barksdale Group, the
> >venture-capital firm founded by James Barksdale, the former CEO of
> >Netscape Communications Corp. who helped inspire the government's
> >antitrust case against Microsoft.
> >
> >Crossgain CEO Mr. Nielsen spent six months in Washington, D.C., during
> >the trial providing technical and public-relations help to Microsoft's
> >lawyers. Last fall, he said in an interview that he and Mr. Barksdale
> >had made peace. With regard to Microsoft, Mr. Nielsen said he thought
> >the two companies' technologies could be complementary, instead of
> >competitive.
> >
> >Microsoft may have been upset that Crossgain planned to build its
> >services on a competing technology platform more compatible with
> >products from Microsoft competitors such as Sun Microsystems Inc. and
> >Oracle Corp., though Crossgain did talk to Microsoft about working
> >together, the people familiar with the matter said. Sun and Oracle are
> >two of Microsoft's most formidable rivals.
> >
> >Write to Rebecca Buckman at
> >
> >
> >Content-Type: application/octet-stream;
> > name=" -- Tech Center.url"
> >Content-Transfer-Encoding: 7bit
> >Content-Disposition: attachment;
> > filename=" -- Tech Center.url"
> >

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