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Computing

Microsoft competitors: Living in fear

October 20, 1998
Web posted at: 2:15 PM EDT

By San Francisco Bureau Chief Greg Lefevre

SAN FRANCISCO (CNN) -- The high-tech landscape is alive with tall tales of Microsoft's intimidating tactics on would-be competitors. Only a few are stated on the record by the people allegedly involved.

"We have been the subject of their threats and intimidation," says Mitchell Kertzman, chairman of Sybase Corp.

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Kertzman says he got a call from Microsoft when his company announced Jaguar, a business database product.

"We made an announcement of that product and a couple of days later I got a call from a Microsoft executive and his basic message was he didn't think that we should be competing with Microsoft in that space. And he sent a very clear message to me that Microsoft didn't think that it was right for us to be competing."

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Bob Herbold, executive vice president and Microsoft's chief operating officer, acknowledges the call but says it went differently.

"Well, we don't agree with that interpretation. For every story like that we think there are literally hundreds of stories that demonstrate that this is a very vibrant industry, that Microsoft works hard with literally thousands of independent software vendors and partners and hardware partners and the like to create great products for consumers."

Widely reported in high tech circles was a 1995 Microsoft meeting with Netscape, then the new darling of the Internet. Accounts vary, but the essence of the meeting appeared to be a demand by Microsoft that Netscape agree to split the Internet market.

Netscape's Mike Homer has first-hand knowledge of the event. "I was at the meeting, and I can't go into any more details about the meeting because it will be an important subject of the trial, but those facts are true."

Netscape says it refused to collaborate with Microsoft and that Microsoft then began its all-out assault on Netscape, including giving away its Internet software free, forcing Netscape out of the browser-for-profit business.

No way, says Microsoft in a point by point refutation on its Web site. It was "forging a strategic partnership in some areas of the two companies' businesses while understanding the areas in which they would continue to compete."

Web site designer Ross Halleck has criticized Microsoft and admits worrying about the effects of doing so.

"I'm thinking to myself as I'm talking, frankly, that I would love to work with Microsoft as a client ... very honestly. But that doesn't preclude the fact that I am apprehensive about the stranglehold that they have on the American business environment."

Microsoft's need to dominate may be well founded. Technology industries spawn new products every day, any one of which could damage the Microsoft lead.

Dan Lavin, research director for IV Associates, says marketing technology products is risky business. "Tens of millions of users can suddenly shift here or there in really what is just the blink of an eye."

Is Microsoft an unfair target? A Hollywood star once called it the tall poppy syndrome. Grow too big, and everyone wants to lop you off.

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