Resolve and Fortitude : Microsoft's ''SECRET POWER BROKER'' breaks his silence (35 page)

A short recess allowed me to cool down a bit and step back from the heated exchanges I had endured. Back on the stand, Boies insisted on continuing this already fruitless topic of OEMs’ role in browser distribution. I was getting frustrated—maybe the effect he sought to create. Next I was shown a document Paul Maritz had written defining “browser share as job one.” Paul seemed to have feared once that programmers would abandon Windows and write only Netscape Navigator–centric applications. Not likely but remotely possible. This went to the heart of the government’s case. In the David Boies’s hall-of-mirrors fun house of logic, this was the reason why we had thwarted Netscape! Not believing this in the first place, I was the wrong guy to testify on this subject.

After more paper shuffling, he probed yet again for answers as to why we had integrated IE into Windows. I told Boies integration was our way of building a better mousetrap and shifting the ground rules on a competitor who had nearly 100 percent browser market share. Disliking my answers, he tried to lure me into technical details of the actual code integration. One subject I could not at all help him on, though he fecklessly and desperately clung to it at length. The judge was shifting around in his seat with growing impatience and asked Boies how long he wished to continue with the topic.

Agitated, the lion requested a bench conference, roaring out his frustration! I listened carefully to the dialogue between him, Jackson, and Holley. Boies complained that after asking me a question, he would “get a dissertation or a speech or statement.” True, I wanted to slow him down! He was “reluctant to let that stuff sit there on the record without cross-examining the very statements” I had made. Then he accused me of saying I was just a salesperson and knew nothing about technology yet freely offered unexpected speeches about the benefits of integration. He was painting me as a chameleon able to camouflage the nature and dimension of my knowledge so the majestic lion could not catch me and knock me over. Claiming he was running out of time, having to reexamine things he didn’t expect me to say and “that [sic: my answers] aren’t really responsive” or relevant to the questions asked. Prompting my attorney to respond, “Your honor, I obviously take issue with this,” asserting that after Boies had shown me technically oriented documents, I had responded with my best familiarity. Jackson agreed, adding, “His scope is rather limited in terms of what he can testify to knowledgeably.” So the trio agreed to classify me as a salesperson. Hallelujah, I had achieved my goal, fencing in the beast. The reason for Boies’s frustration rested squarely with him. He was drifting back and forth with a feral and misguided priority of chasing after opportunities to corner his prey, inviting—demanding—unqualified testimony in regard to modern OS technology I simply did not possess.

Revenge, though, was being craftily plotted, with questions getting longer and windier as their substance became less precise. I simply refused to answer them, forcing him to break them down and clarify them. Not showing such terrific focus anymore, and being thrown off script during the bench conference, he reinvestigated old issues already covered ad infinitum
until we arrived back at the subject of copyright. I had supplied a copy of our copyright applications for both Windows versions with my written testimony. Even here he wasted time by flailing away over whether or not we had a copyright for the different versions of IE as well. Yes, we did as part of Windows, but not separately!

After another sealed document was unzipped on the fly, Boies then went ahead and asked questions about prices Dell paid in comparison to Gateway (GW). The judge cautioned him because the document he was referring to was sealed. He knew full well this was confidential information and pricing issues were not to be discussed in open court. After my attorney intervened, I assumed Boies would no longer delve any further into similar topics. Stubbornly he persevered, asking the same question about Compaq’s Windows prices in relation to GW’s. Neither Jackson nor my attorneys objected. I was flabbergasted, but with the damage already partially done, I proceeded to answer truthfully, in public. The TV stations in the evening and the newspapers the next morning made this part of my testimony the big story. Boies openly basked in the fact he seemed to have proven GW had been disadvantaged—as he phrased it in his afternoon press conference—because “they did not play by the Microsoft rules.” The truth was different. GW paid slightly more for Windows because she shipped less than half as many PCs than the competitors mentioned!

At last we reached the IBM relationship. Weirdly enough, Boies arrived upon it by probing into whether we had ever tried to talk IBM out of supporting Sun’s Java product. He was trying to prove a pattern whenever an OEM supported a competitive environment we would intervene. IBM’s support for Sun, a competitor of hers, did not appear to be smart. Pointing this out to Sam Palmisano in our first meeting, he had told me this wasn’t his decision to make and he could care less—semihonest as I thought. True or not, it mattered little to me; I had made my point, and that remark could not be counted as coercion.

The background was a document written by Bill voicing that if IBM was really in the Sun Java camp, it could affect our relationship. We hardly had any. Mr. Boies, however, worked feverishly to have this comment translated as just another evil attempt to coerce IBM. A part of a pattern he was trying to prove convincingly. Since when couldn’t we express our dislike of IBM supporting one of our competitors’ products? A heated exchange developed when I refused to second-guess Bill, letting Boies say, “I’m entitled to know whether you understood this meant that Mr. Gates was saying…” Since when was Boies entitled to me reading Bill’s mind years later? Asking me in the same context if Bill was “being primarily concerned with IBM’s welfare or MS’s,” I answered truthfully, “With both,” hoping Jackson would believe that Bill wanted peace with Big Blue.

After a brief recess, I was confronted with yet another sealed document, this time generated by Compaq. It stated that one of my former employees, Jan Claesson, had told one of Compaq’s VPs four years earlier that if Compaq would ever opt for just a per-copy license, this would be a “big issue.” Boies’s idea was to demonstrate we had coerced Compaq into a per-processor license with this not-even-vaguely retaliatory comment. When Jan’s discussion had taken place, Compaq operated under a highly advantageous per-processor license, which still had another three years to run. A per-copy license would have no doubt yielded higher royalties. I expressed to the judge how wildly illogical that statement was considering the circumstances.

The most serious issue Boies brought to my attention was a discussion Jan C. supposedly had with Mike Clark, one of Compaq’s VPs. He had whispered in his ear what other OEMs were paying for Windows 95. Employees working for me knew such information was not to be disclosed. Jan, being a supervisor, made his breach of confidentially extremely severe. When Boies asked me point-blank how I would have reacted if I would have known this earlier, I told him flat out I would have fired the guy. In a painful moment of truth, we all agreed.

Wanting to demonstrate how badly we had damaged Netscape when bundling IE with Windows, Boies probed the details of a competitive review Steve had once initiated. A long-winded question followed, hard to understand. My response: “That’s a long question”; his answer: “I will break it down.” Unsatisfied with my answer, another of his long, loopy, run-on questions followed. Boies was obviously getting tired, and his questioning style reminded me of Thomas Mann, a German novelist of the nineteenth century, who wrote the largest longest German sentences I have ever read.
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I noted: “Mr. Boies, it is very late. Please break it down so I can understand it.” He answered: “It was a long question and awkward and I apologize. It is late.” Jackson nodded.

The following exchange was one of the funniest. Obviously frustrated, Boies asked if I knew how many people were downloading browsers from the Internet. I answered: “I do not know, but I believe it is substantial.” He then tried to lecture me: “Would you be surprised, sir, that for the first nine months of 1998, it was negative?” I promptly responded: “Meaning they sent their browsers back?” By now we were closing in on 5:30 p.m.—the courtroom, including the judge, exploded with tension-dispelling laughter. Boies was wearying. It took him considerable time to recover at last, asking the right question a few minutes later. What he was referring to was a survey showing a decrease in the number of Internet browser downloads.

He had a point. In ’98 we were already shipping IE version 4.0, a winning product neatly proving exactly the opposite of what he was trying to ram down the judge’s throat. Not until we had such a superior product did users stop downloading Netscape’s browser. As could be expected, improved features and quality had won!

The next session happened in camera
,
meaning without the public. It took half an hour and focused on OEM pricing and policies in intimate details. There were no surprises, though Boies made certain Jackson understood we had pricing power; we had for sure, but this in itself meant nothing. I disputed his argument of not having competition, but he insisted we operated only in the Intel-based PC market and no other computing environment was relevant. This was for the judge to accept or reject. We finished by 6:10 p.m. It had been a long, grueling day, and we had gone an hour beyond the normal close of court—a first for Jackson. Another lonely meal completed my day.

The next morning found me fresh, optimistic, and energized, knowing in a matter of hours my ordeal was coming to an end. Back on the stand, Jackson reminded me—with a sarcastic undertone—I now could be helpful. As his rebuttal began, Holley grinned at me: “Don’t mess it up on me!” He did an excellent job asking precise questions and, as a result, got exact answers. Holley was narrow and focused and not ambiguous like Boies had been. I only hoped the judge would take this part of my testimony to heart. Another part of Holley’s rebuttal made another of Boies’s many tricks transparent, showing me a document without all of its attachments. As Holley pulled them entirely out, the formerly suppressed piece contained exactly the opposite of what Boies had alleged. By now the atmosphere in the courtroom had palpably shifted from tense to pleasant. When he asked me about the current piracy rate on IBM PCs, I estimated it at about 15 percent. Jackson, not understanding my answer, wanted the number confirmed: “Was it 50 percent?”
I corrected him, and Holley responded, “Luckily.” And I added, “If it would have been 50 percent, I think I would have not done my job,” with Jackson chiming in, “You would be out of a job!” Inspiring another round of healthy laughter.

The lion rose for a last time—for one last charge. He posed a meaningless question to me in final desperation or as if putatively filling in the last lines of his inquiry. Making it easy for him, I answered promptly. He turned with a sigh, indicating he was finished with me—no more growling. I was free to go and talk to my attorneys, delighted the ordeal was over at last.

Preparing this book, I reread the court records, reviewing my testimonial battle with the clarity of hindsight. Boies’s tactics appeared to be predictable and transparent. Well-prepared and circumspect witnesses should see right through his inner schematics laced within the moment rhetoric. Painstaking preparations combined with steady nerves, the will to hold his feet to the fire as he holds yours, and never giving an inch will wear him down. My legal team gave me an 8.5 performance rating. I would have done better if it hadn’t been my first showing in court. I had no quarrel with Jackson except when he unsealed secret documents at gusto. I found him attentive and more supportive than anticipated.

The critical responses to my performance were mixed.
Business Week
reported I “took the court room on a wild semantic roller coaster ride.” Yes, the businessperson being grilled employed a different vocabulary than the prosecutor and differed with him in the definitions and inferences within the vernacular of that language. The papers reported correctly, “For Boies, proving a point in court was like pulling a tooth.” More painful for him than for me because it made him work for answers and shed time. The same article stated that Boies “was clearly annoyed at Kempin’s performance,” as he should have been. Nevertheless, he mentioned to journalists in one of his daily press conferences that I was “one of the smartest men working at Microsoft.” Coming from him, and probably meant sarcastically, he was obviously reflecting on his own prowess.

BETRAYAL OF JUSTICE

REBUTTAL

After a recess of thirteen weeks, the trial continued with three rebuttal witnesses from each side. Ted Waitt was rumored as being one of them. At the end, he was not called upon or didn’t want to show up. A bit of a tactical chess game developed. Who would name witnesses first? I believe MS made a mistake in doing just that. The early rebuttal phase was little more than a rehash of what was presented earlier, as each side tried shaking and stirring former statements from witnesses who had been called a second time. From behind the scenes, I understood that Bill had been beseeching the attorneys to lift their ban. They however determined that his showing would no longer affect the outcome. Exposing him to this—in their mind—extremely hostile judge would do more harm than good for his soul and the case. Steve’s name never came up. For a second time, a lot of employees were mystified. A no-show for the first round and in a lack-of-leadership redux, not present for the second one either.

We scored some points when a hostile witness had to admit Netscape had distributed 160 million browsers before being taken over by AOL—representing more than nearly two browsers for each existing Internet user. Franklin Fisher finally determined that the monopoly price for Windows could be calculated at just above $200. He did this with a generous elasticity factor as Schmalensee, our expert, later pointed out, but at least we had a number. Numbers speak loud and clear, and with our average OEM price at $55, we were looking forward to how Jackson would take such a crucial fact into account.