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The Case For Microsoft – Why Windows and Microsoft Office should stay under one roof

Two weeks ago, in response to the government’s proposed regulatory scheme to
break up Microsoft, I said that our company could not have created the
Windows operating system if we had been prohibited from developing Microsoft
Office as well. The symbiotic nature of software development may not be
obvious outside the industry, but it is a phenomenon that has produced
enormous consumer benefits. Windows and Office–working together and drawing
on each other’s features and innovations–have improved personal computing
for millions.

The benefits of developing operating systems (OSs) and applications software
under the same roof will increase as new intelligent devices emerge over the
next few years. Take the tablet PC. Today most people carry a paper notebook
to meetings and then transcribe their notes to a PC. The tablet PC that we
are developing will streamline that process. A small, lightweight, portable
device, it will enable you to take notes, dictate, annotate and then
seamlessly transfer everything to a PC or any other device. It will make
meetings less of a chore.

Under the government’s plan, however, Microsoft’s tablet PC simply won’t
happen, because our OS and applications developers will be unable to
collaborate. Almost every aspect of the tablet PC’s evolution–starting with
the design of handwriting-recognition applications–requires real-time
collaboration between OS and applications developers. Today that happens
spontaneously, just as it does at IBM and Sun Microsystems. Real-time
collaboration is the cornerstone of software development.

Just as chassis developments at Lincoln (owned by Ford) are shared with
Ford’s other car divisions, Microsoft takes the best thinking among its
applications software developers and shares it with Windows developers (and
vice versa). In doing so, Windows can incorporate innovations that can then
be further leveraged by independent developers and even by our competitors.

Just because Ford’s Taurus is an American best seller, should the company be
barred from sharing its innovative work among its divisions? Should America
Online, the No. 1 website, be stopped from sharing technologies developed by
Netscape (which AOL owns) or with Time Warner Cable and Should
Sun, a leading player in high-end e-commerce servers, be stopped from
sharing among its OS, applications and hardware?

If consumers’ interests are paramount, the answer to each of these questions
is clearly no.

Windows never would have gained popularity and reached critical mass without
the benefits of innovative, user-friendly technologies developed by our
Office team–technologies that often then became part of Windows and further
drove innovation across the industry. For example, in 1991 software
developers for Microsoft Office introduced a new feature known as a toolbar.
We now take toolbars for granted. If you are reading this article online on
a Windows PC, the toolbar is the series of icons at the foot of your screen
that with one click allows you to switch from your browser to your word
processor or your e-mail. Had those toolbars been created elsewhere, they no
doubt would have been patented and never incorporated into Windows. Once
added to Windows, toolbars became available for use in software programs
created by Microsoft and thousands of independent companies. That is the
great efficiency of innovation in platform software.

Had the proposed plan to dismantle Microsoft been implemented 10 years ago,
such innovations might never have found their way to broad consumer
availability. They never could have moved from the “applications” company to
the “OS” company that the Justice Department envisions. Consumers and
developers would have been harmed.

The DOJ plan reflects a profound hostility to Microsoft’s efforts to make
products that work well with one another. For example, the plan would
effectively prohibit the new Windows and applications companies from
engaging in technical discussions to develop new versions of Windows and
Office. Such close cooperation would be impossible under the DOJ plan
because it mandates that no technical information can be discussed that is
not “simultaneously published” to the entire computer industry, which would
be a practical impossibility.

The DOJ scheme permanently prohibits any further improvements to the
Internet software in Windows. It would mean no improvements in browser
technology and no support for new standards or technologies that would
otherwise have helped protect your privacy or the safety of your children

The DOJ scheme also effectively imposes a ban of up to 10 years on the
addition of any significant new end-user features to Windows. New features
must be provided on an a la carte basis and priced separately to computer
manufacturers. Provisions like these would kill innovation in the OS–and
impair the livelihoods of the tens of thousands of independent software
developers who depend on constant innovation in the OS to make their
products more attractive. Updates to Windows and Office technologies that
could, for example, protect against attacks such as the Love Bug virus would
also be much harder for computer users to obtain.

The effect of this lawsuit will be to punish Microsoft no matter what harm
this does to consumers, software developers, the industry that has driven
America’s remarkable growth–or, indeed, the entire economy. That is why
Microsoft plans to appeal the district-court decision, which is at odds with
a decision of the U.S. Court of Appeals and with antitrust law. We remain
confident that the courts will reaffirm that every company, no matter how
successful, should be encouraged to build better products for consumers.

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