"But you guys-and with all due respect-are considered evil bastar

Joe Barrera (joebar@MICROSOFT.com)
Fri, 5 Dec 1997 18:31:43 -0800

While looking around for Microsoft policy statements on encryption, I found
a list of transcribed speeches from various Microsoft execs at
<http://www.microsoft.com/corpinfo/xspeech.htm>. One of the speeches
(actually more of an interview) from Steve Ballmer
contains the following beautiful dialog:

Jim Goldman: [...] So this question, with all due respect to you and Mr.
Ballmer...let me ask you this. Intel has a de facto monopoly. And for the
sake of argument, let's assume that Intel has a monopoly in the chip
industry. For all intents and purposes, it controls the microprocessor
market, but they're considered by many in the media and many around here as
a true success story, a wonderful company, a do-gooder. The avuncular Gordon
Moore, the hard-charging Andy Grove. But you look at Microsoft, you guys
also have a de facto monopoly on the operating system. Not even a de facto-a
real monopoly on the operating system. But you guys-and with all due
respect-are considered evil bastards. I mean, that's what you're about.
Everybody hates you. Why is that? Why the difference in perception? How does
it affect you personally, and how does it affect the way you guys do
business going forward?

STEVE BALLMER: If I really understood why, if I really, really did, we would
certainly take some action. Because in point of fact, it's not good for us,
for our partners and our potential partners, and it's not good for our
customers. It is my sense today that there many people where we would
probably unusually benefit, for example, by having a closer relationship,
particularly with ISVs, software developers. Outside Silicon Valley it's not
quite as bad as what we just said, but nonetheless, I think the fact that
there is something in our image which is a little different than I would
like is not a very good thing. So we are really trying to understand that,
really trying to dissect that, and really are spending a lot of time trying
to reach out to software developers and to customers.

We actually have to work a lot harder than we probably would with a
different kind of image and reputation. I don't know how to magically change
that. Certainly government inquiry taints one's reputation. Certainly Bill
Gates' personal fame and fortune taints our reputation. There must be some
other factors, and in some sense we have to work harder to appeal to the
partners and customers.

Jim Goldman: But I can't picture you in your office trying to figure out a
warm and fuzzy way to approach Jim Barksdale and say, "Hey, buddy, let's
sort of smooth the waters a little bit; enough of this squabbling." I look
at you more as a guy in an office pounding the table and saying, "Jim
Barksdale? Screw him. They're nothing." I mean, I just...

STEVE BALLMER: There's a third option. One is, how do we make nicey-nice? I
agree. One is, they're nothing, screw them. The third option is, they're
something; how do we really compete aggressively? And I would venture number
three as a more likely scenario. It is out of respect that we compete. I
don't think that that's the heart and soul of the issue. I think people
actually do expect us to compete with our competitors. And I don't think
competing with competitors is the thing that taints our image, or at least I
hope not. That would be sort of un-American, un-capitalist, un-all that is
good. Nonetheless, competing is a very good thing. It's fundamental.

I think the bigger problem is...and it's not so much a problem for Intel,
partly because of the much more fixed nature of their product. There are
many, many people who aren't quite sure where the boundaries are between the
kinds of product we build and the kinds of products they build. And frankly,
we're not sure either. We'll spend $2.6 billion, this year in R&D. That
mostly goes into five products: Windows, Office, Windows NT Server,
BackOffice, and our interactive media products. But if you think of $2.6
billion getting poured into five boxes, it's pretty clear that they're going
to do a lot of things next year they didn't do this year. And there were
probably a set of companies that were living on the boundaries of what we
were doing. That's sort of an uneasy relationship almost by definition. And
to manage that better, I think that means being even more forthcoming about
where we're going and what we're doing. Some people call that vaporous; I
actually think it's more helpful to potential partners. I think that's
critical. But we certainly do spend a lot of time focused on that. We don't
spend a lot of time focusing in on how to make nice-nice with guys we're
supposed to compete with. We do try to figure out how to interoperate, and
we do spend a lot of time actually sitting and thinking, what is it going to
take to really work more closely with different partners.

- Joe

Joseph S. Barrera III <joebar@microsoft.com>
Phone, Office: (415) 778-8227; Cellular: (415) 601-3719; Home: (415)
The opinions expressed in this message are my own personal views and do not
reflect the official views of Microsoft Corporation.