News Analysis: Small Companies Are Footnotes in U.S. v. Microsoft

February 15, 1999

NEWS ANALYSIS

Small Companies Are Footnotes in U.S. v. Microsoft

By JOEL BRINKLEY

ASHINGTON -- The pawns in the Microsoft trial are the smaller companies whose business practices have been scrutinized and then thrown into the spotlight of courtroom debate to bolster the case of either Microsoft or the Justice Department.
Companies used this way in the last couple of weeks have included Red Hat Software, Netcom, Caldera and Be Inc.
Representatives of these companies are not brought to court. Instead, lawyers for the opposing sides offer as evidence accounts from the news media, World Wide Web pages, even product packaging and documentation, to make the case that a company agrees with, or finds itself at odds with Microsoft.

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But that does not mean the company's leaders are blind to what is happening. When Be was the subject of debate for several days early this month, Jean-Louis Gassee, its chief executive, read news accounts and poured over trial transcripts he found on the Internet. At the end, Gassee said, "Microsoft has a lot of nerve using my tiny company as an example."
Gassee was not called as a witness; the Justice Department's and Microsoft's legal teams are limited to 12 witnesses each, forcing the two sides to find other ways to make their points on everything but the most important issues.
It is a bit like trying to analyze government practices in North Korea by interviewing a few ill-informed exiles. But that has not stopped both sides from plunging ahead, even when a little deeper investigation would show that the truth is different from the courtroom representation.
That is certainly the case with Be. The company first figured in the trial in January, when Microsoft lawyers and witnesses pointed to Be as a potential competitive threat. Be was formed in 1990 and now employs 90 people at its headquarters in Menlo Park, Calif. The Be operating system, known as the BeOS, is installed on about 20,000 personal computers worldwide, most of them used for specialized purposes.
"It amuses me that they call me a competitive threat," Gassee said. "But it's perplexing. One might question the motives. My strategy is peaceful coexistence with Microsoft because it would be suicidal to compete with them."
On Feb. 1, Microsoft began using Be for another strategic purpose. In a videotaped demonstration created by James Allchin, a senior Microsoft executive, the BeOS was held up as an operating system with an integrated Web browser, just like Windows 98. This showed that Microsoft was simply following common industry practices, Allchin suggested.
But that tape set off two days of additional demonstrations, with Microsoft trying to prove that Net Positive, Be's browser, was integrated into the BeOS and the Justice Department displaying screen shots from a computer running BeOS to prove that the the browser could be deleted and thus was not an integrated part of the operating system.
Microsoft then displayed excerpts from the Be instruction manual showing that browser program files were held in a system directory that users were warned not to alter.
Gassee said he was perplexed by Microsoft's assertion about the program files because that was true only in an older version, which was phased out late last year. And, he said, he knows that Microsoft has copies of the new version, Release 4.
"We have the names of BeOS purchasers with addresses ending in microsoft.com," he said. "They bought a number of copies, and we thank them for their business -- which is to say they don't have a good excuse for referring to older documentation."
Mark Murray, a Microsoft spokesman, said he thought the demonstration was videotaped in October, when BeOs Release 3.02 was still in use. "There may be a new version," he said. "But that's the one we had."
In Be's Release 4, the browser files are held in the applications directory with no warnings not to delete them. And Gassee insists that despite Microsoft's best efforts to use his company as a pawn, Net Positive is not integrated into the BeOS any more than Excel or Word are integrated into Windows, even though they are often installed on new computers along with Windows.
"When you delete the word processor, you can't write documents anymore," he said. "When you delete the print driver, you can't print. And when you delete the Web browser -- take Net Positive and drag it to the trash -- you can't browse the Web anymore. That's all."
But Microsoft made an additional point. Just as is true with Windows 98, the BeOS requires a browser to display help files, which are written in hypertext markup language, or HTML, the formatting standard for Web pages. When the browser is deleted, the help system does not work properly, just as is true with Windows 98.
Gassee says that formatting help files in HTML does not mean that the browser is integrated, and the arguments on both sides fall into the realm of technological theology. There is no clear definition. But Gassee insists that just because one program calls on features of another does not mean the two are integrated. "Let's say you have a Word document and you paste a spreadsheet from Excel in it and edit it," he said. "If you remove Excel from the the system, you can't do that anymore. That does not make Excel integrated into Windows?"
Nonetheless, Gassee said he wished the BeOS help system did not rely on the browser. It would be easy, he added, to make the HTML reader a part of the operating system instead of a function of the browser, so that both Net Positive and the help system could use it.
In fact, Microsoft did something similar, incorporating what it calls an "HTML engine" into Windows 98 as a part of its Internet Explorer browser. As a result, all the applications in its forthcoming Office 2000 suite, including Word and Excel, can read and write files in HTML format.
"We could have done that," Gassee said. "But there were scheduling issues. We wanted to get the product out as fast as possible."

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