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  Microsoft: Looking Out for Number One

Continued from page two

For Microsoft's competitors, a more worrisome prospect also loomed: that Office could become a "platform" - software so dominant in its field that every other programmer must take it into account when writing new software. (Certainly, Windows is a platform.) If you control the platform, you have enormous influence over all the software written for it, whether your company writes it or not, because you control all the interfaces between the platform and other programs.

Microsoft spends a great deal of time and energy informing other software companies about those interfaces, but its competitors contend that Microsoft's control of them still gives it an edge.

Concerns about controlling platforms are basic to the antitrust suit against Microsoft. That case focuses on Internet browsing technology, which some experts believe could become a platform. What triggered the suit was Microsoft's decision to "bundle" its browser software into Windows - to weave its browser deeply into its operating system. In effect, Microsoft told computer makers that they had to feature its (effectively free) browser on their machines.
    coffee break
Eric Peterson takes a coffee break in an office hallway next to a makeshift promotional poster for the soon-to-be-released FrontPage software. (TWP)
What the government contends is that from this position, Microsoft has undue influence in the development - or lack thereof - of browser technology. Microsoft contends that it is creating better products when it binds new functions into the operating system, and many consumers applaud those efforts.

The FrontPage scenario that was under consideration early last summer was fundamentally different: Instead of bundling FrontPage into Office, Microsoft would merely offer a "premium" version of Office that included FrontPage. Its customers would still have a choice - and in any event, Microsoft wouldn't be including FrontPage for free.

This scenario did little to allay competitors' anxieties about platforms, but from the vantage of Jon DeVaan, vice president for the Microsoft division that includes both Office and FrontPage, the questions boiled down to two.

"Is there a set of customers who would like the convenience" of such a combination? DeVaan wondered. If consumers were convinced that creating and managing Web sites would become as common to office work as using a spreadsheet, then the combination would make sense, he said.

"And can we do it without messing up the FrontPage business model?" DeVaan wanted to know. That business model had new versions of FrontPage coming out every nine months or so - a pace meant to keep up with the fast pace of change of the Web. Office, on the other hand, was on a cycle about twice as long - largely because its base of corporate customers didn't want to buy new software more often than that.

But there were so many customers. Office remained a tempting thought.

Marketing Efforts


Through the spring, Pat Kirtland ran the FrontPage marketing effort as if he were spending his own money.

For big products, Microsoft seems to have bottomless marketing coffers. The rollout of Windows 95, for instance, featured a song by the Rolling Stones, a performance by Jay Leno and the Microsoft colors beaming from the Empire State Building. Office had a fleet of 100 marketers.

FrontPage had to make do with four,, although Kirtland could "borrow" a few people from the Office team as the next release date neared.

    strategy discussion
Software development members hold an informal strategy discussion in the lobby of their office. (TWP)
"My gut tells me we spend too much on banners," or advertisements on the Web, he told his team at one meeting. Then he started drilling one of his staff on the results they were getting from such ads.

Kirtland was demanding quantitative results at every step. What promotional deals were advancing the FrontPage cause? he asked. One team member had persuaded the Internet Explorer team, the team developing Microsoft's answer to Netscape's browser, to offer a FrontPage rebate coupon worth $45. A joint marketing arrangement with American Express Co. was gelling more slowly.

Few people outside Microsoft see the arm-wrestling that goes on between in-house groups. And from the outside, Microsoft has long been harshly criticized for taking advantage of other companies, including some who thought they were Microsoft's partners. Mike Maples says the Microsoft ethic was as simple as the law of the jungle.

Particularly a few years ago, "I didn't try to write 'win-win' contracts," Maples said. "I didn't care about [the partners'] interests."

Microsoft executives figured that all they needed to do was look out for Microsoft's interests - and the other guy would look after his. "In a perfect world, everybody negotiates what's good for them," Maples said.

"To Bill [Gates] and Steve [Ballmer], it's a competitive game. It's Microsoft versus everybody else. You protect your own side. I don't have to worry about your side. My only job is to get the maximum advantage for the company."

Even when Microsoft was smaller, negotiations didn't always work out so neatly. "It was a culture where we never did anything illegal or immoral," Maples said. "There were instances when a guy wanted to make a deal so bad, he signed away rights to his products," thinking he would get back the value through joint marketing with Microsoft. "They thought the [Microsoft] magic would rub off." In some cases, they found themselves almost out of business.

    product tile
The FrontPage product tile is framed by sneakers of two programmers. (TWP)
About four years ago, said Maples, he began pushing Microsoft executives to think about their partners - at the least for Microsoft's own good. "I made [Microsoft executives] list the three good things for the other side" before approving a deal, he said. "I was trying to make [Microsoft] aware that if the other guy didn't profit, it wouldn't be a good, long-term partnership." His approach to partnerships has taken hold.

After FrontPage's marketing team ran through the deals it had worked out with partners, Kirtland asked them to quantify the benefits of such arrangements in the future.

"We should build into [Internet service provider] contracts that they have to report back to us quarterly" on new business that FrontPage helps generate for them, Kirtland said. How valuable is it to work closely with a handful of ISPs? Which ones have the most FrontPage customers? Perhaps, he added, Microsoft wasn't adequately leveraging that particular asset.

Becoming a Target


In early July - a few weeks after the antitrust suit had been filed - the FrontPage team suffered one of the rude shocks that a lot of big companies must endure. A small Canadian Internet service provider named MDI Internet went public with its complaint that FrontPage seemed to be trying to coerce users into choosing Microsoft-friendly ISPs.

The offending message popped up when some users tried to publish their FrontPage-based Web site on MDI Internet. It read: ". . . try selecting [other Internet provider] from the list of Internet service providers."

In effect, the message was just telling the user to try again, using a generic link designed to accommodate a broad array of ISPs. But to MDI, it seemed that the message was telling users to subscribe to a new provider - one, presumably, moving in lockstep with Microsoft.

MDI's complaint provoked a flurry of headlines in the trade press - and an easy target for Microsoft critics. "What better way to force Internet service providers to adopt Microsoft proprietary technology than through error messages on the desktop?" Ken Wasch, president of the Software Publishers Association, told reporters.

To Harley Rosnow, a manager with the FrontPage team, Microsoft was getting hammered for something it didn't do - something, in fact, it had gone out of its way not to do. After the stories broke, "there was a lot of emotion," Rosnow said. "You say, 'Oh my God, how did that happen?',"

The programmers quickly started rewording the message for future releases of FrontPage, but the experience jarred Rosnow. "It destroys you," he said wearily. "My brother calls me up and says, 'Was that you?' My dad gets worried."

To Julie Larson, the episode seemed like another bewildering sniper attack on Microsoft, only now it was worse because the Justice Department was on the company's case. "It kind of makes you unhappy when you're working on something so hard and people who normally don't have anything to do with the computer industry, like my mom, ask questions about the DOJ," she said. "DOJ wasn't even in her vocabulary before."

The Rush to Ship


As July passed, the FrontPage team scrambled to get a prototype version of FrontPage 2000 ready to share with the hundred or so people who would help test it. First Larson authorized dinners on Wednesday nights for "bug bashes," where programmers would try to debug their code. Then she added bagels in the morning, dinner every night and even a few lunches on weekends.

And then, in August, Microsoft made a low-key announcement that a premium version of Office 2000, due out next year, would include FrontPage 2000. Microsoft resolved the discrepancy between the two programs' development cycles by planning to include alternating versions of FrontPage with Office.

The FrontPage team, already laboring under a tight deadline, knuckled down to smooth out differences between its software and Office. Because you gotta ship the software, and FrontPage 2000 was set for release in the first quarter of 1999.

Once FrontPage 2000 ships, some members of the team might get a handsome round of stock options. And everyone will get a little gold sticker to add to the Lucite plaques they received when FrontPage 1.1 went out the door.

On the plaque is an inscription from Bill Gates: "Every time a product ships, it takes us one step closer to the vision: a computer on every desk and in every home. Thanks for the lasting contribution you have made to Microsoft history."

© Copyright 1998 The Washington Post Company

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