decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books

Gear

Groklaw Gear

Click here to send an email to the editor of this weblog.


You won't find me on Facebook


Donate

Donate Paypal


No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster

Comes v. Microsoft Exhibits by Number 2535_A-2586

Comes Homepage ] [ Transcripts ] [ Exhibits by Date ] [ Exhibits by Number ] [ Audio/Video ]


Comes Exhibits by Number, page 6 of 18

The exhibits are divided into 18 pages, due to length. This page contains exhibits 2535_A-2586. For the other pages in the collection:

Exhibit Description
2535A

HIGHLY CONFIDENTIAL
PURSUANT TO PROTECTIVE ORDER Cheng@GW2KUSA, Ted

To: Bart Brown@GW2KUSA
Waitt@GW2KUSA
From: Jim Collas@GW2KUSA
Cc:
Bcc:
Subject: re: office 97
Attachment:
Date: 8:13/96 5:48 PM

I have some input on your list:
1. SBE pricing. We should offer them $50 a copy for 100% of the business or $60 a copy on 70% of the business and a request that they help us get a $30 solution on the remaining 30% but no guarantees that we would end up with Microsoft. The $0 price on 100% will help us average out high-end and low-end. This is essentially our $30 offer pushed up to $50.
2. We have some time to work out the SBE branding issue but we should let them know that we would like to see it changed.
3. Agreed on Intl. This would give us a significant advantage in Europe and Japan.
4. Upgrade royalties for Gateway customers should be the same as bundled. If they still want to protect retail then we should charge more and make some money.
5. A good deal on OfficePro '97 in Q4 is one of the main reasons to consider the Microsoft deal. We would have a significant advantage in Q4 if we could offer our customers a free upgrade from Office '95 to OfficePro '97. Street price will be several hunderd dollars. There is a catch to this that could hurt us. We must require Microsoft to continue providing OfficePro '97 at the SBE price until SBE (or whatever its called) is available. We need them to do this because an aggressive OfficePro '97 push in Q4 will start making Office '95 obsolete and will create a bad situation if Office Pro '97 goes to $210 in Q1 and SBE is not available. This will also keep pressure on them to maintain an aggressive SBE schedule.
6) One additional note is that we should only use the Netscape and Quicken angle if required to close the deal. If they stick to $60 and $150 for 100% of the business then we should not consider dropping Netscape and Quicken but I still think we should do the deal. I don't think that not loading Netscape and Quicken will hurt our sales since most of our customers will already have both Netscape and Quicken.

----
Original text
From Ted Waitt@GW2KUSA, on 8/13/96 5:11 PM:
I need a list of what we want and what we are willing to do before my call with Joachim tomorrow at 11. The points are, but not limited to: 1. Office SBE pricing. Do we hold at $50 and say no to $60?
2. SBE branding. We don't want to call it Small Business.
3. Int'l no upcharge or exclusions.
4. Upgrade Royalties.
5. OFfice Pro 97 in Q4.

In other words get me a list of what we want, and I'll do the best I can to get it.

----
From Bart Brown@GW2KUSA, on 8/13/96 5:00 PM:
Talked to Mike and did not get much. Joachim would like to walk through the following elements tomorrow with Ted:

GW 031175

MS-PCA 7637945

HIGHLY CONFIDENTIAL
PURSUANT TO PROTECTIVE ORDER

1. Royalties .... Mike knows
2. Upgrade / Coupon program
3. Overall upsell progralm
4. Distribution .... channels / countries
5. T's and C's .. they want to be paid monthly instead of quarterly
6. Intellimouse
7. Core functionality specifically internet and finance .... imagine that .... I wonder what they want ?????

Ballmer and Jochim met on monday and are meeting again tonight but I got the impression Mike is no longer privy to the negotiating so I have no good info. Mike did say that his opinion was that $50 would not fly but I think he's bluffing or stupid I'm not sure.

GW 031176.

MS-PCA 7637946

2539A

[Microsoft logo]

[illegible From and To lines, url]
Date 8/16/96
Redistribute Internet Explorer

REDACTED

[Handwritten: To Eric Alexander, From Michael Glend, Check out Exhibit "A"]

[Illegible header, but ends Internet Explorer]

LICENSE AND DISTRIBUTION AGREEMENT
(Microsoft Internet Explorer and Microsoft NetMeeting

1. DEFINITIONS (b) "NetMeeting" shall mean Microsoft's realtime collaboration and communications software in all available language versions requested by COMPANY, and for all available platforms.

(c) "Internet Mail and News" shall mean the client for email and internet newsgroups in all available language versions requested by COMPANY, and for all available platforms.

(d) "Comic Chat" shall mean the graphical internet chat client in all available versions requested by COMPANY, and for all available platforms.

(e) "Kit" shall mean a collection of tools that enable COMPANY to perform [illegible, perhaps the word is limited] customizations to the Licensed Software in accordance with the instructions in the Kit and the Logo Guidelines provided by MS, as well as any updates to the Kit provided by MS with future releases of the Licensed Software.

(f) "Licensed Software" shall mean, collectively, Internet Explorer, NetMeeting, Internet Mail and News, and Comic Chat.

(g) "Internet Product" shall mean any COMPANY product which provides access to or information about the Internet. An Internet Product may not be a personal computer.

(h) "License Key" shall mean the 10-digit alpha numeric code provided by MS that enables COMPANY to use the customization features in the Kit.

(i) "Logo" means the Microsoft Internet Explorer" logo depicted in the Guidelines or such additional or replacement logos as MS may provide from time to time under that Agreement.

(j) "Internet Site" means COMPANY's worldwide web site(s) described in the [illegible words] which mean the applicable Criteria.

(k) "Guidelines" means the guidelines for use of the Logo as outlined in the Microsoft Internet Explorer Logo Usage Guidelines.

(l) "Criteria" means the applicable Internet Explorer criteria as defined in the Microsoft Internet Explorer Logo Qualification Criteria.

WSNE 02474

08/16/96 14:45:25

1 of 7

CONFIDENTIAL

[stamp - Plaintiff's Exhibit 8, Alexander, 8/25/97, illegible but ending in CA]

TNS003113
CONFIDENTIAL


2. LICENSE GRANTS

(a) Kit. MS grants to COMPANY a nonexclusive, limited worldwide, royalty-free license during the term of this Agreement to customize Internet Explorer using the Kit in accordance with the instructions provided in the Kit's "Custom IEAK Wizard". COMPANY acknowledges and agrees that its use of the Kit to customize Internet Explorer requires the rightful [illegible] from MS of the License Key allocated to COMPANY. COMPANY agrees that it shall only use the Kit in accordance with the instructions provided in the Kit's Custom IEAK Wizard that is available to COMPANY upon input of the allocated License Key and the Logo Guidelines provided by MS.

(1) Licensed Software. Subject to COMPANY's compliance with the terms and conditions of this Agreement, MS grants to COMPANY a nonexclusive, worldwide royalty-free license to use, reproduce and distribute (directly and indirectly) through COMPANY's distribution channel the Licensed Software solely for use in conjunction with COMPANY's Internet Product to COMPANY's end user customers.

(2) If MS makes a new release (other than as "Update" release which is designated by MS as a change in the hundredths digit (x.x(x)]) of any component of the Licensed Software available, then: (i) COMPANY may no longer distribute the old version of the Licensed Software component, and may only distribute such new release of the Licensed Software component with COMPANY's Internet Product, provided, however that COMPANY may continue to distribute existing inventory of COMPANY's Internet Product containing a prior version of a Licensed Software component for a period of three (3) months following MS' release of a new release; and (ii) COMPANY must formally notify its customers on COMPANY's home page for its main public web site that an upgrade of the Licensed Software component is available at the download URL specified in the most current version of the Internet Explorer Logo License Agreement located on www.microsoft.com for Internet Explorer and at www.microsoft.com/ie for other components of the Licensed Software. The text of the respective notices must state: For Internet Explorer: "Microsoft has made available a new version of Internet Explorer. Click the Internet Explorer Logo to upgrade your browser today," and for other components: "Microsoft has made available a new version of (NetMeeting/Internet Mail and News/Comic Chat). Go to www.microsoft.com/ie to update your software today". This notification will remain present on the COMPANY's [illegible] public web site until the earlier of COMPANY's depletion of its outdated inventory, or until three (3) months following the public availability of a new release.

(3) COMPANY shall require its distributors, dealers and others in its distribution channels to comply with the relevant distribution terms of this agreement, in particular with Sections 2. (c.) Logo. Subject to and expressly conditioned upon compliance with the terms and conditions of this Agreement, MS hereby grants to COMPANY a worldwide, nonexclusive, non-assignable, nontransferable, royalty-free, right to use the Logo solely in conjunction with the Internet Site and/or Internet Product and solely in the manner described in the Guidelines. COMPANY agrees and acknowledges: MS owns the Logo; use of the Logo will inure to the benefit of MS: COMPANY will not adopt, use, or register any corporate name, trade name, trademark, service mark, or certification mark, or other designation similar to, or containing in whole or in part, the Logo. COMPANY's use of the Logo shall adhere to the Criteria.

(d) LIcense Restrictions. The following restrictions apply to the license grant in this

[Footer as per page 1, with one-digit increments as appropriate.]


Section 2

REDACTED

(1) COMPANY may not reverse engineer, decompile or disassemble the Licensed Software.

(2) COMPANY shall only distribute NetMeeting in conjunction with Internet Explorer.

(3) COMPANY may not permit further redistribution of the Licensed Software by end user customers of COMPANY's Internet Product.

(4) COMPANY shall maintain and not alter or remove any copyright, trademark, and other protective notices contained in the Licensed Software, including the end user license agreement ("EULA") which is included in the setup installation of the Licensed Software. COMPANY shall also comply with Microsoft's trademark guidelines with respect to the proper use of Microsoft trademarks associated with the Licensed Software.

(e) All rights not expressly granted herein are reserved by MS.

3. COMPANY OBLIGATIONS

COMPANY's license in Section 2 is expressly conditioned upon COMPANY's performance of the following obligations:

(a) COMPANY shall notify MS of its first distribution of any component of the Licensed Software by emailing such information to "iservice@microsoft.com". (b) COMPANY shall provide MS with a quarterly volume distribution summary for COMPANY's Internet Product that includes any component of the Licensed Software. Such summary shall be provided to MS within forty five (45) days following the end of the quarter. COMPANY's summary shall specify separately for each component and version of the Licensed Software, the number of copies of the Licensed Software licensed or distributed by or for COMPANY during that calendar quarter. In the event that no copies were licensed or distributed by or for COMPANY during a calendar quarter, COMPANY shall indicate this on the volume distribution summary. All such summary reports shall be maintained in confidence by MS and shall not be disclosed to any third party except to its immediate legal and financial consultants as may be required in the ordinary course of MS' business. During the term of this Agreement, COMPANY agrees to keep all usual and proper records and books of account and all usual and proper entries relating to the Licensed Software licensed hereunder. MS may, at its expense, conduct an audit to be made of the applicable records in order to verify statements issued by COMPANY. Such audit shall be conducted by an independent certified public accountant during regular business hours at COMPANY's offices and in such a manner as not to interfere with COMPANY's normal business activities. Such audits shall be made no more often than once every twelve (12) months.

(c) COMPANY shall comply with the terms of Exhibit A.

4. OWNERSHIP

Except as expressly licensed to COMPANY in Section 2, MS retains all right, title and interest in and to the Licensed Software.

5. ACCEPTANCE AND DISCLAIMER OF WARRANTY

(a) The Licensed Software is [illegible] and accepted by COMPANY.


REDACTED]

(b) Neither the COMPANY nor any of its employers shall have any right to make any representation, warranty, or promise on behalf of MS.

(C) THE LICENSED SOFTWARE AND THE KIT ARE PROVIDED TO COMPANY AS IS WITHOUT WARRANTY OF ANY KIND. THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE OF THE LICENSED SOFTWARE AND THE KIT ARE ASSUMED BY COMPANY AND THE END-USER CUSTOMER. MS DISCLAIMS ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

6. LIMITATION OF LIABILITY.

IN NO EVENT SHALL MS BE LIABLE FOR ANY DIRECT, CONSEQUENTIAL, INDIRECT, INCIDENTAL, OR SPECIAL DAMAGES WHATSOEVER, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LASS OF BUSINESS PROFITS, BUSINESS INTERRUPTION. LOSS OF BUSINESS INFORMATION, AND THE LIKE, ARISING OUT OF THE USE OF OR INABILITY TO USE THE LICENSED SOFTWARE OR THE KIT, EVEN IF MS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. BECAUSE SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY.

7. TERM OF AGREEMENT.

The term of this Agreement shall commence as of the Effective Date and shall continue until terminated as provided in Section 8.

8. DEFAULT AND TERMINATION

(a) Either party may terminate this Agreement for any reason upon sixty (60) days prior written notice.

(b) Either party may suspend performance and/or terminate this Agreement immediately upon written notice at any tie if the other party is in material breach of any material warranty, term, condition or covenant of this Agreement, and fails to cure that breach within thirty (30) days after written notice thereof.

(c) Upon termination of this Agreement for any reason, COMPANY's rights under Section 2 immediately terminate, provided, however, if MS terminates this Agreement without cause pursuant to Section 7 or 8(a), the license grant in Section 2(b) shall survive for a period of time equal to the earlier of: (i) three (3) months from the date of notice of termination, or (ii) time necessary for COMPANY to deplete its inventory of the Internet Product containing the Licensed Software. After such time, COMPANY shall destroy all full or partial copies of the Licensed Software and the Kit in COMPANY's possession or under its control. If this Agreement is terminated for cause pursuant to Section 8(b), COMPANY shall return to MS or destroy all full or partial copies of the Licensed Software and the Kit in COMPANY's possession or under its control within ten (10) days following the termination date, including any in-house copies COMPANY may have produced.

(d) End user licenses validly granted prior to expiration or termination of this Agreement shall survive termination or expiration of this Agreement.

(c) Sections 1, 4, 5, 6, 8, 10 and 11 shall survive termination of this Agreement.


REDACTED

9 SUPPORT

(a) COMPANY shall be responsible for providing end-user support for customers or the Licensed Software and COMPANY's Internet Product.

(b) This Agreement does not include technical support from MS to COMPANY Technical support may be available from MS or an MS subsidiary pursuant to a separate agreement.

10. NOTICES AND REQUESTS

All notices, authorizations, and requests in connection with this Agreement shall be deemed given on the day they are (i) deposited in the U.S. mails, postage prepaid, certified or registered, return receipt requested; or (ii) sent by overnight courier, charges prepaid, with a confirming fax; and addressed as follows:

NOTICES TO COMPANY: will be provided in electronic sign-up form.

NOTICES TO MS/VOLUME DISTRIBUTION SUMMARIES:
Notices: MICROSOFT CORPORATION
One Microsoft Way
Redmond, WA 98052-6399
Attn: Senior Vice President, Systems
Copy to: Law & Corporate Affairs, US Legal
Fax: (206) 936-7209

MICROSOFT CORPORATION
Remittance Processing
P.O. Box 34808 [Ed: # not clear, ditto city], WA 98124-4108

Notification of
Distribution: iservice@microsoft.com

or to such other address as the party to remove the notice or request so designates by written notice to the other.

11. GENERAL

(a) This Agreement shall be construed and controlled by the laws of the State of Washington, and COMPANY consents to jurisdiction and venue in the state and federal courts sitting in the State of Washington. Process may be served on either party in the manner provided in Section 10 above, or by much other method as is authorized by law.

(b) Neither this Agreement, nor any terms and conditions contained herein, shall be construed as creating a partnership, joint venture, agency relationship or as granting a franchise.

(c) This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements or communications. It shall not be modified except by a written agreement dated subsequent to the date of this Agreement and signed on behalf of COMPANY and MS by their respective duly authorized representatives. No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of the same or any other provisions hereof, and no waiver shall be effective unless made in writing and signed by an authorized representative of the waiving party.


REDACTED

(d) If any provision of this Agreement shall be held by a court of competent jurisdiction to be illegal, invalid or unenforceable, the remaining provisions shall remain in full force and effect.

(e) The rights and obligations hereunder shall inure to the benefit of the successors of the parties hereto, provided any rights or obligations hereunder shall not be assigned by COMPANY without the prior written approval of MS.

(f) Any Licensed Software which COMPANY distributes or licenses to or on behalf of the United States of America, its agencies and/or instrumentalities (the "Government"), shall be provided with RESTRICTED RIGHTS in accordance with DFARS 252-227-7013©1(ii), or as set forth in the particular department or agency regulations or rules, or particular [illegible] which provide MS equivalent or greater protection.

(g) COMPANY acknowledges that the Licensed Software and the Kit are subject to the export control laws and regulations of the US, and any amendments thereof. COMPANY confirms that with respect to the Licensed Software, it will not export or re-export them, directly or indirectly, either to (i) any countries that are subject to US export restrictions (currently including, but not necessarily limited to, Cuba, the Federal Republic of Yugoslavia (Serbia and Montenegro), Iran, Iraq, Libya, North Korea, and Syria); (ii) any end user who COMPANY knows or has reason to know will utilize them in the design, development or production of nuclear, chemical of biological weapons; or (iii) any end user who has been prohibited from participating in the US export transmissions by any federal agency of the US government. COMPANY further acknowledges that the Licensed Software and the Kit may include technical data subject to export and re-export restrictions imposed by US law.

(h) COMPANY shall, at its own expense, promptly obtain and arrange for the maintenance of all non-U.S.A. government approvals, if any, and comply with all applicable local laws and regulations as may be necessary for COMPANY's performance under this Agreement.

(i) Licenses shall pay, and be responsible for any and all sales taxes, user taxes and any other taxes imposed by any jurisdiction as a result of (a) the entry into this Agreement; (b) the performance of any of the provisions of this Agreement; or (c) the transfer any any property, rights or any other grant hereunder.

(j) If either MS or COMPANY employs attorneys to enforce any rights arising out of or relating to this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs.

EXECUTION OF THIS AGREEMENT: Evidence your agreement to be bound by all terms of this Agreement (including the Logo Usage Guidelines) and execute this Agreement by sticking on the "Proceed" button. Do not proceed if you are not authorized to bind the COMPANY.

_________________

EXHIBIT A TO THE LICENSE AND DISTRIBUTION AGREEMENT

COMPANY Obligations

1. WIthin thirty (30) days following distribution of COMPANY's Internet Product. COMPANY agrees to deploy the advanced features of MS' Internet Explorer HTML extensions in the design of COMPANY's home page.

2. Use and display of the "Microsoft Internet Explorer" logo on the home page for COMPANY's Internet Product, along with a hot link www.microsoft.com/ver/ie_htm on the face of the home page.


REDACTED

3. Offer the Microsoft Internet Explorer as COMPANY's preferred worldwide web browser for its customers.

4. Use Microsoft Internet Explorer internally on COMPANY's workstations, and be solely responsible for training COMPANY's employees on using the Microsoft Internet Explorer.

5. Use the Microsoft Internet Explorer name and logo on COMPANY's packaging, advertising and promotional materials. SUch use shall be pursuant to MS' standard trademark policies as attached hereto and as may be provided by MS to COMPANY from time to time.

6. Issue a press release announcing that COMPANY has licensed the Microsoft Internet Explorer within sixty (60) days following execution of this Agreement. In the event COMPANY elects to distribute NetMeeting, COMPANY shall issue a press release announcing such distribution within sixty (60) days following execution of this Agreement. COMPANY shall provide any such press releases to Microsoft for review at least five (5) days prior to release. COMPANY agrees MS may use COMPANY's name in any press release MS issues regarding licensing of the Microsoft Internet Explorer.

[Illegible, but seems to be a 1996 copyright notice.]

2541

To: Noah Mendelsohn/CAM/Lotus@LOTUS@IBM_INTERNAL
cc:
From: Rodney Smith @ RTPNOTES @ IBM_INTERNAL
Date: 08/20/96 06:34:44 AM
Subject: Re: URGENT: Can I pass on the MS news?

Jeff P. is in the loop here. He's not interested in source but object-code.

Please distributed only selectively -- we do not have a contract close with regards to Navigator for OS/2 and any news like this on the streets would jeopardize the contracts -- not to mention our position with Microsoft. Some folks think this will loosen up NS to close this quicker -- I'm a little more conservative given their recent actions to I'm erring on the side of caution.

Regards,
Rod

Re: URGENT: Can I pass on the MS news?
Subject: Re: URGENT: Can I pass on the MS news?
To: Rodney Smith @ RTPNOTES @ IBM_INTERNAL
cc: From: Noah Mendelsohn/CAM/Lotus @ LOTUS @ IBM_INTERNAL
Date: 08/14/96 10:14:05 AM

Rod: does anyone at Lotus know about this? Very important to our direction. Can I pass it on? Thanks.

Additionally, there is some new news on the Microsoft front. We are pursuing the possibility of jointly working on Java for Win3.1. It appears from this initial discussion Microsoft is becoming concerned enough that we will/could form a stronger partnership with Netscape that they offered us Internet Explorer source code, royalty free with upgrades. While this might not be free as initially offered, it does suggest the level Microsoft will go to sway our alliances.

This puts us in a unique position; I suggest we need to navigate a course that offers us a platform & environment that will enable as level a playing field as possible -- and keeps both of these guys on the client side. I think we are all agreed that if Netscape-JavaSoft with us cannot foster a relationship that attracts a majority of the ISV community -- we need to consider the alternative with regards to Microsoft. However, in our current voting position we can demand a lot of shaping to fit our business objectives. In terms of time, I suspect we have less than two months to make this happen. It is clear that given the current directions -- we will have to make a choice on the client side. Netscape & Microsoft are on divergent paths.

I think Lotus, particularly with our experience in dealing with and competing with MS, along with all the Notes Issues, would want to be in the loop on this ASAP. Thanks.

Noah

2545 From: John Ludwig
Sent: Wednesday, August 28, 1996 12:08 AM
To: Bob Muglia; Ben Slivka
Subject: some very high level thoughts on api work

reflecting on our meeting with paulma the other day, i have the following high level observations to add.

* we have to avoid the trap of trying to compete across the board with the entirety of netscape one or with the entirety of the sun java platform. those guys need a huge extensive api so that they can replace our platform. we don't. we should be able to pick up a ton of apis via com with no work at all.

* subversion has always been our best tactic. don't fight awt -- enhance it and support it better than anyone else. don't fight jdbc -- adopt it and move on. subversion is almost invariably a better tactic than a frontal assault. it leaves the competition confused, they don't know what to shoot at anymore.

* while forms/db/drawing/objects may be the obvious core api, they may not necessarily be the fights we should pick. forms -- yes, we have a great asset in trident that i think will blow people away. db -- what distinctive do we really have to offer above and beyond jdbc. why fight this fight. what is the goal. drawing as well. on the other hand, advanced media api -- directx, streaming, etc -- may be a better battle to fight. winsock2 type functionality -- may be a better battle to fight. we have distinctive assets in these areas, they leverage our os investment better than say drawing does.

* netscape has been super effective at picking a couple small points and just hammering away on us with them. this may be more effective than a complete broad attack. just pick say media and whack away at them.

* obviously we need badly to talk to customers. we have precious little data on what the java development community actually wants.

* partners partners partners. this will be key to our success. I would argue that we need to help partners who want to provide their own apis -- provide them easy distribution with our development kits and runtimes. just as we are doing for partners that want to provide their own layout runtimes that fit within the browser. as long as they support our extensibility interfaces we should hold our noses and help them gain eyeballs and trial.

---------------------------------
MSS 0049950
CONFIDENTIAL
ATTORNEYS ONLY

2545A

PLAINTIFF'S
EXHIBIT
2545A
Comes v. Microsoft


AMENDMENT NUMBER 26
Amendment Date: September 1, 1996
to LICENSE AGREEMENT FOR MICROSOFT PRODUCTS #1107-3053
between MICROSOFT CORRORATION, a Washington, USA Corporation
and COMPAQ COMPUTER CORPORATION, a Delaware, USA Corporation

Effective as of the Amendment Date indicated above, the below signed parties agree to amend the above referenced license agreement (hereinafter the "Agreement") by this instrument (hereinafter the "Amendment") as follows:

  1. MS grants COMPAQ the following license rights with respect to the object code files from WINDOWS 95 listed in Section 2(b) ("Product"):

    (a) Notwithstanding anything to the contrary in the Agreement, COMPAQ shall distribute the Product in object code form only by means of diskette or CD. The Product must either be distributed (i) inside the Customer System package with new COMPAQ Customer Systems on which WINDOWS 95 is preinstalled or (ii) as part of a subscription maintenance program directly from COMPAQ to end users of COMPAQ Customer Systems on which WINDOWS 95 was preinstalled or (iii) as a customer service fulfillment item directly from COMPAQ to end users of COMPAQ Customer Systems on which WINDOWS 95 was preinstalled.

    (b) For purposes of this Amendment, Product shall mean the following specific WINDOWS 95 file from OEM Service Release 2.0 when such file is distributed separately from the entire OEM Service Release 2.0: lpt.vxd.

    (c) COMPAQ agree to pay MS a royalty of Zero Dollars (US $0.00) for each MS Product distributed as described in items 2(a) and 2(b) above.

  2. MS reserves the right not to execute this Amendment 26 unless it is signed by COMPAQ on or before October 30, 1996.

All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement. The terms of this Amendment shall supersede any inconsistent terms contained in the Agreement.

IN WITNESS WHEREOF, the parties have executed this Amendment in duplicate as of the date first written above. All signed copies of this Amendment shall be deemed originals.

MICROSOFT CORPORATIONCOMPAQ COMPUTER CORPORATION
[Ed: Signatures appear here]
By (Signature)By (Signature)
DON HARDWICKKevin Bohren
Name (Printed)Name (Printed)
GROUP MANAGERVice President
TitleTitle
10/9/9610/1/96 [Ed: Could be 94]
DateDate

Exhibit to the License Agreement dated October 1, 1992 between MICROSOFT CORPORATION and COMPAQ COMPUTER CORPORATION.

2548 To: Bob Jackson
From: Michael Takemura@COMPAQ
Cc:
Bcc:
Subject: CMP: DELL, GATEWAY ENJOY DISCOUNTS -- Microsoft
Office deals han
Attachment:
Date: 9/10/96 11:45 PM

FTY....
Delivery Failure Report

Your document:
CMP: DELL, GATEWAY ENJOY DISCOUNTS -- Microsoft Office
deals handcuff reseller
partners
could not be delevered to:
Bob Jac kson

To: "Lynn Schlemeyer@Newbiz@PCNPD Hou" @ EMAIL, Jean
Nassar, Greg Young, "Kevin
Bohren@Comr DT@PCMkt Hou" @ EMAIL, Nancy Greene, Bob Jac
kson, "Hanspeter
Eiselt@Prod Mkt@NA Hou" @ EMAIL, Tina Juhl, "Chuck
Kenney@Prod Mkt@NA Hou" @
EMAIL
CC: "Ron Schneider@Chnl Sales@NA Hou" @ EMAIL, "Richard
Thomas@Chnl Sales@NA
Hou" @ EMAIL, Steven Russomanno, Mike Clark, Joyce Lillis
From: Michael Takemura
Date: 9/10/96 08:37:17 AM
Subject: DELL, GATEWAY ENJOY DISCOUNTS -- Microsoft Office
deals handcuff reseller
partners

MICROSOFT CORP: COMPAQ COMPUTER CORP; HEWLETT PACKARD CO

CMP Tech Wire September 6, 1996 Friday


DELL, GATEWAY ENJOY DISCOUNTS -- Microsoft Office deals
handcuff reseller
partners

COMPUTER RESELLER NEWS, Page 1, September 9, 1996

Boston - The channel is in an uproar, and Microsoft Corp.
is declining to
comment on a drtamatic disparity in the price direct PC
makers pay for Microsoft
Office vs. that charged reseller partners.

Microsoft signed a deal with both Dell Computer Corp. and
Gateway 2000 Inc.
to bundle Office on every PC shipped for 75 percent less
than the best price
available to resellers, said channel executitves. This
licensing practice makes
resellers unable to effectively compete against the direct
marketers.

"Bypassing the channel has a history of failure," said
Daivd Dukes, vice
chairman and chief executive of the Ingram Alliance
Reseller Co. "The channel
will react aggressively to any competitive threats from a
foe such as Dell."

CONFIDENTIAL
COM-7-001559

MS-PCA 7016361

HIGHLY CONFIDENTIAL
Pursuant to the Protective Order in
New York, et al. v. Microsoft
CA No 98-1233


Channel executives said Microsoft ships Office and Office
Professional to Dell
and Gaterway for as low as $35 per PC. A white-box version
of Microsoft Office
or Office Professional for the channel is priced at $300
per PC, sources said.

Microsoft declined to comment officially for this story.
HOwever, a company s
source said the $35 figure bandied about by some resellers
as the price of
Office to Dell and Gateway was "way off."

"We just want Microsoft to level the playing fied. If we
could buy Microsoft
Office at the price that Dell and Gateway get it, it would
be fair," said
Larry Beaudoin, account executive for ComputerLand in
Albany, N.Y. "The
difference is in excess of $300."

A reseller buying Office Professional in a three-pack from
Ingram Micro Inc.
pays $961.55. A stand-alone version of Office Professional
with Bookshelf is
$495 for the channel, resellers said.

While Microsoft said it wants to compete in the burgeoning
build-your-own
market, VARs are unable to compete against Dell and Gateway
with the prices
Microsoft is offering them.

"It leaves the channel with an unfair disadvantage because
of this pricing
deal," said one channel executive.

Mike Healey, president of PC Build, a VAR based in Needham,
Mass., added, "From
a build-your-own standpoint, we won't if (they) are
competing with
Dell or Gateway. If a customer wants a bundle of Office
Proffessional, we'd get
killed. We will only consider it if it is a special
projecrt or we can get
multiple on-site licensing. THat makes it more
competitive."

This also makes it more difficult to sell a Compaq Computer
Corp. or
Hewlett-Packard Co. system because one the reseller adds an
Office bundle or
upgradem, a customer has to spend more per unit.

"There is a disparity in price, and one of the big problems
is the perception
that all PCs are the same," said ComputerLand's Beaudoin.
"Corporations are
starting to realize it is a better buy to get a real
computer, but they have
to look a the bottom line and can probably do it for $75 to
$100 less per
unit [with a clone]."

Compaq and HP do not bundle suites with their commercial
PCs, instead letting
the channel do the configuration.

At the same time, some resellers are seeing the Office
bundles being taken off
Dell and Gateway machines and being sold in the gray marker
at "ridiculously"
low prices, sources said.

Microsoft has introduced a program, called Delivery
Servicve Partners, to compabt
gray marketing. This program allows smaller VARs to buy
OEM copies of
operating systems in packs of five at nearly the same cost
paid by larger
licensees.

According to resellers, Microsoft also has set up a toll0-
free number to fight
gray marketing called 1-800 RU-LEGIT

Gateway could not be reached for comment. A Dell
spokesperson, meanwhile, said
volume pricing is a common practice and would not comment
on the specifics of
its licensing deal with Redmond, Wash.-based Microsoft.

CONFIDENTIAL
COM-7-001560

MS-PCA 7016362

HIGHLY CONFIDENTIAL
Pursuant to the Protective Order in
New York, et al. v. Microsoft
CA No 98-1233


Copyright c 1996 CMP Media INc.

CMviaNewsEDGE
Copyright (c) 1996 CMP Publications, Inc.
Receieved via NewsEDGE from Desktop Data, Inc.: 9/6/96
19:20
2549
2557
2561
2563

PLAINTIFF'S
EXHIBIT
2563
Comes v. Microsoft


From: Steven Sinofsky
Sent: Sunday, October 06, 1996 8:01 PM
To: Jon DeVaan; Chris Peters
Subject: RE: Access, Internet studio, VB and other overlapping products

I'm scared because I think adam and I agreed a little bit. Here is sort of what I would say...I won't send this. Basically at this point, I am realizing two things:
* I still will not sign up for another dependency on adamb.
* I can't do what one has to do and just ignore bill. It hurts me too much personally to see him get frustrated because we are not doing "literally" what he says, and I can't work with that guilt.

So basically I don't know how I can make progress on this trident thing.

There are a number of interesting things to think about in both bill's mail and adam's reply. We are trying to work through many of these issues right now as we plan Office9 and "new office", so it is hard for me to speak for everything we are doing as if there is complete concensus or agreement, so what follows is my personal thoughts.

I do not disagree at all with the assertion that our applications (Office9 or new office) should target HTML and scripting and that is what we will do. However, I think Adam and I agree that this is much more easier said then done.

We are at a point when each office application is set to be made obsolete by various web-based applications (over the next 3-5 years). As adam aludes to, this is not something that will happen overnignt, but will eventually happen in some form or another. The two products that are the subject of this mail (VB and Access) are very clearly going to lose out in the web tidal wave, and very rapidly since they rely on developers, who are very rapidly making the shift to developing in HTML and JavaScript. Even right now, I would be hard pressed to tell a customer to write a VB or Access application instead of an HTML form-based application, even with the severe/crushing limitations of the HTML world--anything that uses a server database benefits enormously from being HTML-based.

Word is clearly threatened by some form of HTML page editor, most ironically our very own (Trident). Excel is threatened by the fact that in a short-sighted way it seems far easier to prepare a variety of static reports on the server and dish those out over HTTP, rather than let people use Excel connected to a snapshot of the live data. The use of Excel as an ad hoc tool will be perceived as Important, but not worth the cost (of course this will put IT back in the hot seat as a bottleneck). PowerPoint is already viewed as a tool for the minority of users. As adam points out all of these products have a huge amount of domain specific knowledge in them that will continue to remain important and transfering that knowledge to a new runtime could be a huge win.

I agree with building on HTML and Scripting as the runtime–that is not very controversial. I think by doing so we will find a lot of things we do today will not be possible, and likewise we will be able to do a lot of new things. On balance this will be a difficult transition for Office9. I think the focus of this will be out of necessity still be on "publishing" to HTML. This is distinctly different from "going native" since it is not clear to me what that means for PowerPoint or Excel or Word. Just taking those three-where does something as simple as interactive slide sorter view, worksheets, or just plain old printing come from? These are pretty difficult services to program when you do own the runtime, and even harder when it is immutable.

The separation of design time from runtime continues to remain a thorny problem that is not made any easier by Trident. The two products mentioned above, VB and Access, are good examples of just how hard this problem is. Both products have runtimes which are very large. The Access runtime is the same as the access design time, though through a bunch of checks at runtime the design environment is not accessible–yet we still ship the design time and most of the code is necessary for an Access developed application to run. VB's runtime is similarly large, but because the design time is a very elaborate application (the compiler, debugger, project manager, etc.) you can save a lot of code. But the fundemental aspects of VB are in a the large number of VBRUN DLLs in the SYSTEM directory. PowerPoint experiences this same issue–the "player" for PowerPoint is nearly all of the product.

It is easy to say this is an architectural shortcoming, but it is hard to find an example amongst all of our products collectively where there is a very rich end-user editing environment and featureset, that can also be easily separated to allow viewing. I'm not saying this can't be done, but I am saying this is very difficult and there is substantial cost in terms of size of the document and speed of rendering, not to mention speed of loading and saving. Many like to talk about the separation of display from data in HTML, but that is just "good old days" thinking–from the day the <BOLD> tag was added this has not been true. Scripting with events makes this worse since you are sending a specific description of what the document should do (and look like) when viewed, and Trident makes this even fuzzier by making it possible to have a "self-modifying" document.

For me, this means that targeting HTML+Scripting as a runtime will be a huge challenge. It will be very difficult to do this for any sort of application that has a pre-defined notion of how features should work (i.e. Office9), since there is such a good chance that the new runtime will prove to be a difficult environment to get the same behavior. I liken this to the difficulty DOS programmers had with Windows early on, when they kept looking for DOS-like ways of doing things that did not make sense in a world of event-driven programming. This is especially true since we talk about HTML+Scripting as a PLATFORM.

But these difficulties can be addressed in some form or another by enough problem solving thought and cooperation, as well as just giving up on a lot of things our applications do today. But there is still the issue of document creation–how does this work in a world where HTML+scripting is the runtime?

This is really the most difficult question for me to answer and I don't know. Trident is an editor, but it is an editor that will create a new document type–one that is mostly an interactive mail message or a database form. This is not a presentation, not a spreadsheet, etc. From the development tools point of view (Access and VB) using Trident as the editor seems very straight forward since the value of the tool will be in the connection of various trident elements together (connecting the controls to a database or events, for example). Similarly, Outlook using Trident is a total no-brainer.

However, for a tool like Excel, Word, or PowerPoint the value these tools provide is in the editing environment that is tightly coupled to the "runtime". In fact, not having a runtime is what makes Word and Excel so easy to use. PowerPoint, as I mentioned, has a very intertwined runtime and design time. The domain specific behavior adam mentioned is in the editor, not just in wizards. So we are basically back where we started two years ago – "word just becomes Forms3" and I don't know how to build Word if we are not building the editor.

I'm at a loss....

-----Original Message-----
From: Adam Bosworth
Sent: Sunday, October 06, 1996 2:10 PM
To: Bob Muglia; Bill Gates
Cc: Aaron Contorer; Richard Fade; Steven Sinofsky; Paul Maritz; Nathan Myhrvold; Brad Silverberg; John Ludwig
Subject: RE: Access, Internet studio, VB and other overlapping products

I'm not competent to address whether Access is or isn't getting good architectural attention so I will not address that. But I will talk about the issues with roles for Front Page, Internet Studio, and Access. Indeed I'm surprised that you didn't include Powerpoint in there because I believe that Powerpoint faces challenges very similar to Access.

Here's the issue. It is critical that we develop quickly applications that are great domain specific authoring tools for HTML and shortly for what I have called "Chapters" (memo reenclosed below for those who missed it). A product like Powerpoint is still badly needed because it understands the user model for authoring slide oriented presentations. But the runtime IMHO would be Trident, not some other binary. At most it might include some Java/ActiveX compoents to allow special effects on pages at runtime. This powerpoint like product should know how to exploit Trident's HTML. I'm routinely building pages and mail internally using Trident these days that animate text, dynamically expand bullets and collapse them, and cause text to change its look and feel as the user hovers over it. This tool should allow mere mortals to do this without having to write the Javascript code I use to author it. It should make it easy to build simple animated scenarios of the sort I'm going to demo at the PDC. Similarly, a product like Access is even more badly needed, namely an authoring tool for building applications to collect and display and search data, but this time with Trident as the runtime, not some custom binary runtime. Again, some components might be included in the pages to help, but the runtime would be the browser. This product would/should be bought to author a site and manage one with domain specific knowledge about what people want when they are authoring data-centric applications. Ideally, this tool would also build the server side component necessary for interacting with the user. Both tools would be far more mere mortal focussed than VB would be. Lastly, there ought to be a tool which lets programmers author pages with script behind them, lets the programmers also author components in whatever way they want, and then lets the programmers assemble these pages/components into sites. This tool is for programmers. This tool would be like a VB that also let me build SQL Server Stored procedures today, only in tomorrow's world it would help me build the Denali intermediate component as well. I'll call this tool the VB-like tool.

So we have a need for 3 tools that are like 3 tools we have today, Powerpoint, Access, and VB, but yet are all totally different in that the runtime is the IE shell plus Trident plus some simple components authored by the tool plus active sites on the server (if necessary and it often will not be especially on the Intranet!). It is easy to say that our current 3 tools should just be these tools.But there is a huge problem here. Backwards compatibility. At 2 levels, usability and programmability. For a long-time to come, there will be things that the current tools make easy for the user to do at runtime that may not be easy in the Trident runtime. Sure components could be written to solve this problem, but that begs the point. Who helps showcase the HTML extensions/runtime we've enabled and why not exploit it. Much worse, tho, is the issue of programmability. The programming models for the current products are going to be fundamentally different from that of the new product. Not a little bit different. A lot different. Pages are documents. HTML isn't Access or VB forms or Powerpoint slides. Don't under-estimate this work Bill. It is as big as building these products.For that matter, a lot of the more artistic of of the Web site authors don't want to program in a scripting language at all, they want something like TerraCotta. And they think today that Director and Shockwave meet that need.

So we have a problem. We see Internot Studio off building something that I think is supposed to evolve to be both the Powerpoint and the Access replacement which, frankly, I think makes it hard for it to be great at either. We see Front page off rapidly building a great replacement for word in the new paradigm, but not really focussing on the other issues. And we don't see anyone really worrying about the VB replacement except VB, but they appear profoundly unwilling to focus on the page authoring problem as opposed to the component authoring problem and they also are trapped by backwards compatibility. You run the risk if you mandate that there be just 3 products of getting none to market quickly enough and having none of them be great at what they do.

Personally, I'd vote to focus. Have Powerpoint stop working on Powerpoint, forget Escher, and just work on building an equally great tool to exploit what Trident 1 and Trident 2 will enable along with cool components and Tera-Cotta to let mere mortals do this. Let Internet Studio focus on letting mere mortals build data-centric applications for the Web. This is terribly important and we need this tool to showcase the Active Data Connector and Trident Dataawareness architecture as well as it is working on showcasing Denali (more on the PARAM's in a moment). Let Bob build Developer Office and "TRICS" to be one and the some thing, namely a developer's tool for building components, pages, Chapters, and sites. And please, do it swiftly! Let Access be a legacy product that can "publish to HTML" but has its own runtime as well and is backwards compatible for the 12 million users of Access today.

Lastly a comment on the PARAM's. It is clear that what is needed as soon as possible is a model for extensible grammer (aka DTD)/rendering in the HTML model so that the data required by components within the page is shown inline and grammatically for these components with extensible TAG's and Attributes for each such component. This will not happen in Trident 1!! Indeed, my architect, Gary Burd, thinks that we should do it in a rewrite of Trident in Java that Don and I might collaborate on and he and I can explain why Java o all of you. It may not even happen in Trident 2 therefore. until there, were going to have to live with ugly obviously glued in components. The big risk is that someone builds a Java runtime that supersets HTML, but does exactly this using Java classes, call it JTML which isn't constrained by being identically backwards compatible to HTML, and makes HTML obsolete because ot its easier authoring and extensibility.

----------
From: Bill Gates
Sent: Sunday, October 06, 1996 11:54 AM
To: Bob Muglia
Co; Aaron Contorer; Richard Fade; Steven Sinofsky; Paul Maritz; Nathan Myhrvold; Brad Silverberg; Adam Bosworth
Subject: Access, Internet studio, VB and other overlapping products

Recently I was trying to figure out what Internet Studio is and thinking about the future of Access.

I am very worried that Access is not getting good architectual attention because it is sort of part of tools and sort of part of Office. The last time I met with the Access group I challenged them to explain to me what it would take for someone to be able to write Outlook or Project in Access. In particular I talked about being able to rignt click on a data row and see a set of actions as an example of something that should be very easy. I have never seen any response to this challenge.

Access certainly has to move to use Trident as a runtime like so many other products we have.

Access also have to think about what roll HTML plays inside the product. Access is our product for letting people define reports. Access should allow those reports to be browsed interactively - diving in on detail data simply by clicking on it like an outline. Access should support most of the richness of HTML output in these reports.

Why is the difference between Internet studio and Access? I can't detect any reasonable difference. Internet studio has taken an approach of putting onto HTML pages the most ugly Microsoft garbage ever seen since COM/OLE programming in C++ was declared a success in order to block langauge invocation. I am still blown away by seeing all those ugly PARAM statements in the HTML totally confusing anyone who tries to do anything. If something isn't part of the WYSIWYG output then it should be succinct and understandable. This was the opposite of that.

We all know that Internet studio on Trident will be better but what is the difference between Trldent by itself, Front Page on Trident, Access on Trident and Internet studio on Trident? My answers are:
a) Only enough editing to do common email scenarios/compete with Netscape and bundled with OS
b) Much richer editing capabilities including the ability to make rich forms
c) The ultimate tool for generating dynamic HTML from data with queries and reports
d) A product I don't understand.

The basic approach we are on now is to take a data tool -Access and allow HTML content to be part of what it generates for reports (including interactive reports) and queries. The thinking here is moving slowly. At the same time we take on HTML oriented tool (Internet Studio) and start to embed report/query generating commands in the HTML. The result is 2 products that both do a poor job and completely confuse anyone who wants to figure out what we are trying to tell them to do.

A simple question is: say I want to take a database of sales data and let people browse that data - what approach does Microsoft reccomend.

I need to see new vision for Access. I also need to see quite a different vision for Internet studio before I agree it should exist as a different product at all.

2564
2566
2573
2575

PLAINTIFF'S
EXHIBIT
2575
Comes v. Microsoft


From: Brad Silverberg
Sent: Friday, November 01, 1996 10:45 AM
To: Steven Sinofsky
Subject: RE: Java thoughts

what part don't you agree with? you don't think people will be able to write real code with trics? if not why not? think of trident as the new user+gdi. the scripting and components can do anything you want including "real code".

there is an incrdibly strong desire by developers and lcps for cross platform. there isn't a day that goes by where someone important is switching over to java.

----------
From: Steven Sinofsky
Sent: Thursday,October 31,1996 4:15 PM
To: Brad Silverberg
Subject: RE: Java thoughts

I don't agree. I think that you are underestimating the desire and need of people to write real code. I used to have endless meetings with programmers trying to get them to use VB because it was so much better at doing what they wanted, so much faster, etc. but in the end they seemed to always go with the "real" tool.

I think any successful strategy will do both well and for the long term. There is no one tool to solve all problems.

-----Original Message-----
From: Brad Silverberg
Sent: Thursday, October 31, 1996 3:04 PM
To: Steven Sinofsky
Subject: RE: Java thoughts

there are a lot of tough issues. we have not yet settled on an api strategy. there is some lively debate going on, and in fact bens came to me this am with the proposal that we do mfc for java. I'll fwd. i do believe that the ultimate api strategy will be one based on trics (trident+scripting+components) but shorter term mfc/java may be a more effective tactic.

this is one reason, to be honest, steve, i am excited about the reorg. i know you probably don't want to hear this but some of the challenges we face as a company are incredibly difficult; i think you'd have a lot to contribute directly to these api discussions. i am excited about some cross fertilization and getting more smart minds on our tough problems both apps and platforms. i have seen with ie3 how much smart people can do when they are unleashed from the organizational and strategic constipation that has paralyzed so much of this company. we have been way way way too inwardly focused and not enough on the outside world and competition.

----------
From: Steven Sinofsky
Sent: Thursday,October 31, 1996 2:09 PM
To: Brad Silverberg
Subject: FW: Java thoughts

argh!

-----Original Message-----
From: Steven Sinofsky
Sent: Saturday, February 24, 1996 6:10 PM
To: Denis Gilbert (Xenix)
Subject: Java thoughts

I've been thinking (oh no) a bunch lately about this Java thing and what we're doing (as far as I can tell). Excuse me for being random...

I'm really caught by how I think Java is really just the once a decade "programmer full employment act" where all the programmers get together and change language just so that they can all feel like they are making progress. Seeing Bruce Eckel giving a talk on "Java for C++ Programmers" reminded me of a talk he gave in 1990 called "C++ for C Programmers". I bet if Bruce was writing books in 1980 he'd be writing "C for Pascal programmers".

The more things change the more they stay the same.

Dean explained to me that we're not doing an MFC-like class library for Java but writing a whole new library around Forms3 and OLE (sure it will leverage MFC experience, but it isn't a total clone). I guess this seems pretty strange to me (maybe I misunderstood and the whoie thing is moot). We created MFC to help with two things:
(1) Make it easy to write Windows programs by leveraging the general understanding of the C SDK and Windows in general (Petzold in particular)
(2) Make it easy to write C++ (OO) programs by leveraging your C knowledge

I think moving to Java requires the same sort of thinking. For me the real winner in the Java tools world will be the company that
(a) has a Java development environment that is great (everyone is tring to do that and I just assume we'll be more than competitive in that arena) and leverages folks understanding of writing C/C++ programs. In particular the vendor that provides the best tools for calling C/C++/MFC APIs from within Java and vice versa will win (just like we made 100% sure you could call Win32 from MFC).
(b) has a Java library that is the easiest to write programs that are cool and competitive with regular Windows apps

When I look at this it just screams for an approach that puts MFC into Java. Not something "like" MFC, but MFC itself. Imagine if there was a set of Java classes that are pretty much the same as MFC classes. This would mean that the average MFC programmer could start cranking out Java apps in no time flat and all the people that teach MFC could be teaching MFC-Java tomorrow without a big learning curve. Basically this is what we tried to do with MFC-make it so the SDK (or C++) people of the world didn't have to learn too much new stuff in order to make the big leap to our world. All along the way we bowed to the object bigots and to the portability police with talk of WLM and licensing (which finally came to be!). In the end, MFC became the only way to use C++ for Windows.

We shouldn't get caught up in the excitement of using the class library to force each and every new technology on people-there will be another 18-24 months where people are just trying to get their head wrapped around new syntax, runtimes, and paradigms. So if we are first out there with an MFC library then there wil be that many more people who can use our tools and will be Java programmers like we want and we can then throw stuff like OLE/COM/Forms3 at them.

I feel that if we try to accomplish two things at once (the transition to Java and the transition to all the new infrastructure) we're likely to overload people and they will fall back on the Sun AWT way of doing things and we will have lost the API war. People need simple concepts that leverage what they know. Right now AWT is random and doesn't do enough to write apps with-MFC is well understood and does what people need.

I also think that the one thing that should be done differently with Java is build in data binding earlier than we ended up doing in MFC. Java is just going to replace VB over time for a lot of apps-it really seems to me that will be natural. VB as a language has failed to evolve and really is archaic and there is no reason to continue to suffer so much (for example, classes really are a good thing). I think this could really be a final nail in the VB coffin.

So I think if we just had MFC2 with data binding as a set of Java classes in 6 months we'd be in really great shape.

In the end this is all about making sure we have strategic APIs. Strategic APIs are those that are clear, easy to explain, and easy for people to use. OLE does not do that, so that is why no OLE interfaces are really strategic. MFC has a better way of expressing those things and it is strategic. But in order for something to really be strategic is has to map very well to the OS and I think it is premature to think that all these new technologies are what people want right away.

I think over time (maybe in MFC Java 2.0) you can add a new CForms3View class and support for that, but the immediate need is to avoid losing all the MFC people to AWT.

Just some thoughts...

2575A

PLAINTIFF'S
EXHIBIT

2575A
Comes v. Microsoft

Report Draft
Subject: Report Draft
Sent: 11/4/96 8:31 PM
Received: 11/4/96 9:48 PM
From: Doug Camplejohn, doug@digitalcommerce.com
To: Peter hoddie, hoodie@apple.com
CC:
Message: Peter,

Here's more flushed out version of the report in ASCII. Let me know what you think. I'll make any final changes, and then send it on to you in Word format.

Best,
Doug

----------

Shaking Up The World:
Thoughts on the launch of QuickTime 3.0

Doug Camplejohn
11/4/96

Overall Observations
The next major release of QuickTime represents the most significant leap in the product architecture since QuickTime's introduction, and should be capitalized upon accordingly. After spending a day with various parties associated with QuickTime at Apple, I believe that Apple has an opportunity to (at least) match Microsoft's ActiveMovie efforts with release 2.5 for Windows, and take a substantial lead with release 3.0. However. I feel that Apple needs to be much bolder in its marketing plans, partnering, and messages if the company wants to maximize the potential impact of this launch and product. Microsoft has great marketing, broad distribution, and few morals, and to fight this battle naively or weakly invites the possibility of them winning again, despite inferior technology.

Overall Strategy
In the rest of this document, I've focused on the following areas, that comprise the elements of a successful launch:
*Technology
*Branding
*Message
*Partners
*Marketing
*Business Model

Technology
The technology in the next release of QuickTime overall seem very strong, but there are a few holes. First, it is critical that QuickTime 2.5 have at least as good MPEG support as Microsoft's ActiveMovie, and can read ActiveMovie formats transparently so that it's truly a superset product. The Internet link portion of QuickTime 3.0 also needs to be fully developed (i.e. ActiveX control, Navigator plug-in, tested over LAN and dial-up connections, etc.) as this will be a large part of the marketing message. Finally, Apple needs to have a stronger streaming story, which should be a combination of local caching-style streaming (e.g. ShockWave) and client-server streaming (e.g. Precept, Progressive Networks, Starlight, VXtreme).

Branding
I believe that QuickTime 3.0 is a revolutionary leap, and you should definitely not call it QuickTime 3.0 and make it appear to be only an evolutionary step. I like the name QuickTime Interactive (QTi), for what it's worth.

I also think it's time to come up with a new/updated logo for QTi - one that can be adopted to a new icon, an animated web banner (like the Microsoft Explorer banner), and used throughout the marketing/advertising campaign.

NOTE: when HyperCard 3.0 is ready to launch, I would do the same thing, and call it HyperCard Interactive (HCi), NOT

WSAP 01463

A 1377
HIGHLY
CONFIDENTIAL



Report Draft
HyperCard 3.0

Message
QuickTime 1.0's message was "cut-and-paste multimedia."

QTi has two messages: a developer message ("cut-and-paste interactivity"), and a consumer message ("the universal player"). Obviously these messages will have to be backed up with strong partnerships, demos, and marketing background materials (e.g. white papers).

Partners
You've covered the obvious candidates (e.g. toolmakers, multimedia content vendors), but need to hit some big strategic partners to make this take off and be newsworthy. For example: Intel, JavaSoft, PointCast, Electronic Arts, Sony/Sega/Nintendo, WebTV/Diba/Navio, Pixar (active clip art), Electric Communities/Worlds Inc./OnLive (3D chat).

The war will be won on content, not APIs. You need to make it easy for people to get their materials into QTi format, and make it difficult for them to switch. A few possibilities:

1) Apple runs a for-profit program to get corporations to convert content into QT format. Qualify and partner with a set of multimedia developers to do the actual work. Create a "starter kit" program that lets companies send in a video and set of slides (e.g. training), and converts the entire thing into a big QTi movie.

2) A more subversive approach is to engineer some form of subtle bug that manifests itself (e.g. synchronization drift) if a QTi movie is converted into ActiveMovie format (much like the copy protection "spike" put into videotapes).

You definitely need to have Macromedia's support, at least publicly. I'd have someone write the Director-to-QTi conversion code. Turn it into an applet for the developer CD, and give the source to Macromedia to make it easier for them to integrate into Director.

Marketing
Some thoughts on the press presentation and demos:
*Emphasize percentage of content out there in QT format on Internet versus VFW/ActiveMovie, and statistics on QTW ranking overall net downloads (it's in the Top 10 - check with CNET's shareware.com group)

*Emphasize number of QT applications out there (be generous), and emphasize that any QT application can immediately take advantage of QTi.

*Be dramatic in visuals - e.g. create animation of all the run-time player icons being put in the Trash, and then QTi icon appears.

*The current demos are good technology demos, but you should create "Day in the Life" scenarios of how this can be a paradigm shift in business, education apps, etc. Have success stories of real customers solving real problems to go hand-in-hand with this.

*There should be a very strong emphasis on the Internet tie-in - the notion that the Internet is "just a big hard disk" and that any piece of content can be dynamically updated without having to launch a web browser or separate application. Complement this with some announcements from some title vendors on how they plan to update their QTi discs via the Internet.

Assuming you have a solid marketing/advertising budget, I'd set a specific date for launch, and then start advertising the release through teasers (much like a movie release). If you build up enough anticipation, and have a killer one-two punch of the technology and partnerships at the launch then you'll get incredible coverage and having strong momentum. Think big. Consider billboards, posters, print ads, etc.

Business Model
The real question here is: "Who has money?" The answer is authors, hardware vendors, consumer electronics companies, and large businesses.

Authors: For authors you can charge for tools, developer programs, and conferences. Create a CD-ROM with all the QTi authoring tools on it, including some tools not available elsewhere. Offer a basic set of tools as part of the price of the CD, and use unlocking technology (like Adobe Font Paks) to give customers the opportunity to unlock and pay for other software on the CD. Either put it into retail (the way Microsoft does with their entry-level developer kits), or into developer channels. Include a 1-year QTi developer subscription program in the price.

WSAP 01464

A 1378
HIGHLY
CONFIDENTIAL



Report Draft
HW Vendors: There is an opportunity to sell some pieces of QTi separately (e.g. capture) if it is truly better than Microsoft's free offerings, but there must be significant value-add. Most hardware vendors (especially PC OEMs) are not paying anything for third party software on their products, and, in some cases, are even getting paid for by the software vendors.

*Consumer Electronics: To become the universal player for DVD would obviously be a huge win. 'Nuff said. Need to have some strong copy-protection story here, however, to make media companies comfortable with the notion of putting their assets into this format.

*Companies: Sell server software for caching content updates (like PointCast) and streaming. Faster route might be to do deals to resell existing products (PointCast, Starlight, Precept, etc.). Another opportunity is to sell content conversion services, as indicated earlier.

In conclusion, QuickTime Interactive is a very cool product, and, marketed properly, has the chance to restore some of the luster to Apple the company so deserves.

Although this project's deliverable was the report above, I'm happy to discuss any of these things further with anyone. You can reach me through the following methods (in order of preference):

email: mediadoug@aol.com
home office: [redacted]
work office: [redacted]

Best,
Doug Camplejohn


Subject: Re: MPEG1 low bitrate data
Sent: 10/20/96 9:26 PM
Received: 10/20/96 9:26 PM
From: self
To: masamichi ONO, ono@sm.sony.co.jp
CC:
Message: Ono-san -

My apologies for the late response. I have been very busy lately, and have been behind in answering my email.

I did receive the document, but I was unable to read the Microsoft word document you sent. I think our email system trashed the file. Our engineer was able to determine how the frame rate in the MPEG files works, and he believes they will cause no problem.

Also the sound is working very well with the files you sent.

>>The best way to make your own low bit rate MPEG streams is buying our
>>MPEG1 real time encoder RTE-3000. :-)

I would like very much to be able to make MPEG streams like these, but I don't think our budget allows us to buy the RTE-3000. Perhaps we will create our own software encoder some day. Of course, it won't be as fast as the RTE-3000.

Regards

Peter Hoddie
QuickTime Architect
Apple Computer


WSAP 01465

A 1379
HIGHLY
CONFIDENTIAL

##################################

PLAINTIFF'S
EXHIBIT

4029
Comes v. Microsoft

From: Richard Fade
Sent: Friday, January 15, 1999 12:18 PM
To: Joachim Kempin; Allen Wilcox (LCA)
Subject: FW: Compaq: Need Input

ATTORNEY CLIENT COMMUNICATION
Joachim I cannot add much to this thread as Rod's comments on his performance on promoting our properties (how many) are about what was verbally agreed to in the discussions. I also had a conversation with Carl that David Heiner had at some point reviewed the language in the license agreement. Allen may want to apprise you of that.
richard

----Original Message----
From: Laura Jennings
Sent: Thursday, January 14, 1999 1:54 PM
To: Paul Maritz; Bill Gates; Steve Ballmer; Joachim Kempin; Carl Sittig; Richard Fade; Allen Wilcox (LCA)
Cc: Greg Maffei; Carol Whitaker (Davies LCA)
Subject: RE: Compaq: Need Input

Thanks. These two reasons are extremely helpful. We'll stay the hard-core approach on #1 and #2 and leave the old digital stuff out of it. I expect if we push hard enough tonight this will escalate by Monday if not before.

----Original Message----
From: Paul Maritz
Sent: Thursday, January 14, 1999 12:50 PM
To: Bill Gates; Laura Jennings; Steve Ballmer; Joachim Kempin; Carl Sittig; Richard Fade; Allen Wilcox (LCA)
Cc: Greg Maffei; Carol Whitaker (Davies LCA)
Subject: RE: Compaq: Need Input

Only thing that I ask is that we not roll in the Digital payments into the "high end" discussion - it can only result in them asking for more in situation where we have enough at stake already. My view is in fact that we should keep them out of both discussions, make deals on the merits, stay hard on the point that this is money owed to us no matter what, and later as an accounting measure we can agree to trade one off before the other.

----Original Message----
From: Bill Gates
Sent: Thursday, January 14, 1999 12:46 PM
To: Laura Jennings; Steve Ballmer; Joachim Kempin; Carl Sittig; Paul Maritz; Richard Fade; Allen Wilcox (LCA)
Cc: Greg Maffei; Carol Whitaker (Davies LCA)
Subject: RE: Compaq: Need Input

Attorney client

This all sounds like the Rod gets rich plan to me.

I think Compaq is making a big mistake selling the bounty they get from their machines to an outside company. It will make them non-competitive in the consumer PC space.

I see no reason not to be hard core about the first two points outlined here.

I have never heard about these Digital back payments. It may be that those should be kept out of this negotiation and folded into the negotiation Paul is having with them on high end things. We have some things they owe us related to Tandem as well. The total number of all these things is really large.

My biggest beef relates to point 1.

MS-PCA-2606018
HIGHLY
CONFIDENTIAL



We agreed to let them have some flexibility for a year to see how they fulfilled point #1. We were clear that if point #1 was not fufulled[sic] in a big big way that we would stop letting them do anything. Unfortunately our mistake in letting them do something was passed on to other companies losing massive value for us and creating a precedent we will be struggling to back out of for a long time.

My view is that they should use our branded communications services and do some other things just to deal with point #1. Not unbranded.

We should be hard core on this one.

Point #2 is just a money point. They owe us and they have to pay.

'Rose is going to testify in the antitrust lawsuit but the positions we are taking here are very reasonable.

Lets now give in on #1 without getting something large. If they have to delay their offering that is too bad. We WILL be locking down the Windows agreement more over time and with new products.

If I need to call Pfeifer on this I will.

----Original Message----
From: Laura Jennings
Sent: Thursday, January 14, 1999 10:05 AM
To: Bill Gates; Steve Ballmer; Joachim Kempin; Carl Sittig; Paul Maritz; Richard Fade; Allen Wilcox (LCA)
Cc: Greg Maffei; Carol Whitaker (Davies LCA)
Subject: Compaq: Need Input

ATTORNEY CLIENT COMMUNICATION

Summary: Compaq plans to file to take AltaVista++ public next week, details of their plans included below. Greg and I are actively engaged in dialog with Compaq on two fronts: 1. a commercial agreement for this new company to use Hotmail, Messenger, Passport as their communications infrastructure and 2. an equity investment of 5-10% in this new company. There are three outstanding issues we are familiar with regarding Compaq which could potentially influence our negotiating position, and we'd like input from those of you more familiar with these previous deals on how to use them, if at all, in these negotiations. -- thanks.

The new company will contain:
  • AltaVista
  • Shopping.com, which they announced their intent to purchase last week for $220 million
  • "Traffic and promotion" from a "major media player", detail of which are sketchy at best, but Rod is currently holed up in NYC completing these negotiations and promises more info to us tomorrow.
  • Exclusive rights to all internet-related activities on Compaq hardware - desktop real estate, keyboard links, etc. - for a period of 3 years. This new company can decide to direct all traffic to altavista or to sell the links/position to third parties.
Rod will run this new company. Compaq is going to keep a controlling interest, and sell minority percentages to their major media partner and their infrastructure provider, the latter of which we hope is us. (Rod told us Yahoo will get the infrastructure deal if not us, and they are negotiating simultaneously with the two of us).

The three outstanding leverage points Greg and I know about with Compaq are:

1. "Prominent" Internet Partner contractual language from Compaq's Windows license, per Carl Sittig:

In the Windows negotiations last Spring, MS made a large concession to Rod regarding ISP referral server provided that "(1) MSCORP is promoted as COMPANY's prominent partner in the internet and (2) MSCORP's www-based services (i.e., Expedia, CarPoint, Sidewalk.com, MSNBC, Internet Gaming Zone, MSN Investor, etc.) are promoted (A) in such ISP sign up wizard:(B) on COMPANY's Presario internet home page: and (C) in other Presario internet activities." This was also a discussion during a Compaq Exec review with BillG, Rod, Eckard, et

Given that a big benefit that Alta Vista will have is the Compaq distribution rights, if MS were to aggressively assert its rights with Compaq under this contract, it would surely affect AV's valuation. Rod's

MS-PCA 2606019
HIGHLY
CONFIDENTIAL



current strategy seems to be to ignore this aspect of our existing agreement. What Greg and I need to know from folks who negotiated this or have subsequently discussed it with Compaq execs is how strongly to interpret and assert our rights under this agreement. Unless we hear from someone that the intent as discussed during the negotiation phase was softer, we will push very aggressively a stance which says MSN properties are already guaranteed MFN status in the new AltaVista portal for as long as it serves as the Presario default or is linked in any way to Presario-linked internet activities, and that regardless of how the infrastructure commercial discussions go, Microsoft plans to vigorously defend these rights.

2. Search contract (I already own, included for completeness)

AltaVista signed a one-year, $18 million distribution deal with MSN this summer. Compaq has subsequently made it clear they want out of this deal. We have indicated a willingness to work with Compaq to address their needs - we'll take the payment in PCs, we'll take it in more aggressive cross-distribution than we currently are already entitled to under the clause above, we'll change the payment structure, add international, etc., - but we won't just let them out of the contract. Compaq is currently in breach of the significant terms of the existing search distribution contract, and failed to make the second payment of $4.5 million in December. We have not yet taken them off of our site nor taken legal action against them since we were engaged in dialog to both rectify their failures and explore a potential new infrastructure deal, but if we were prepared to do so, this could be a second strong card in our hand which might make it more difficult for Altavista's public offering.

3. Digital back payments

This one we understand the least well. Greg believes that Digital owed us back payments of $40 million at the time of the Compaq acquisition, and that this matter is not yet settled. One option would be for us to agree to take this $40 million and the $18 million above in the form of equity in the new company.

In summary, Greg and I want to take the position in our calls this evening and tomorrow that we are already in a very strong position on Compaq's internet activities and that not resolving their existing outstanding issues with us (#1 and 2 above) will make the spin-off more difficult. We are willing to transfer some of their outstanding obligations into equity in the new AltaVista company, but if we find ourselves locked out of AV's plans, we intend to vigorously pursue our rights per the first two contracts above, and they are better off negotiating with us on these issues directly than trying to ignore them. This is hard ball, they will likely escalate to Steve/Bill, but we believe now is the time for us to stand firm.

MS-PCA 2606020
HIGHLY
CONFIDENTIAL

2578
2581

PLAINTIFF'S
EXHIBIT
2581
Comes v. Microsoft


From: Richard McAniff
Sent: Friday, November 15, 1996 12:51 PM
To: Steven Sinofsky; Jon Reingold; Jon DeVaan; Craig Unger; Ralf Harteneck; Peter Pathe; Dawn Trudeau; Brian MacDonald
(Exchange); Richard Fade; Chris Peters
Cc: Richard McAniff
Subject: RE: Office 9 focus areas

The process that Stevesi is proposing below is the right start. I'd like to add to this process by putting down into words some of the ideas that I have been thinking about recently. A lot of what I am about to write is not new, but represents a collection of different peoples thoughts, and is the result of conversations (and email exchanges) I've had with everyone on the To:line, as well as conversations with people such as Bobmu, Adamb, and Darrylr and others.

From a purely process perspective, I believe we need to have an overriding framework which we (and our teams) can use to help make decisions/tradeoffs about Office. This involves four things:

  • Identifying and agreeing on a set of threats that we think are most important
  • Agreeing on a Vision for the Office Product
  • Agreeing on a set of constraints (assumptions) that will help us when making decisions
  • Identifying key scenarios that Office9 will be evaluated against

I've taken the liberty to put forth a strawman proposal with regard to each of these areas. This is not meant to be exhaustive, but is meant to stimulate discussion so that we can make forward progress.

Threats. I think we all would agree that we face multiple threats. Because of this, it is pretty easy to get confused about what should be done, or which priority is most important... i.e., should we build that next feature into product X, or should we put more efforts into a common feature in Office, etc., etc. We need to all agree on the set of threats that are most critical and then plan accordingly.

  • Office itself is the competition. At one end of the spectrum, we are concerned about upgrades, and the very real possibility that our customers will not upgrade to our newer verslons of Office. Customers are very concerned about the real cost of upgrading and the problems they experience when moving to new versions of Office. The costs of upgrading (installation, downtime, etc) are weighed against the benefits of higher worker productivity. When the gains are not substantial, people stop upgrading. In this case, the last two versions of Office is the competition.
  • Office is a dinosaur. The Internet represents a fundamental change in at least our runtime strategy, and Office may not be well suited to this new environment. Office may be too big, too proprietary, and too tied to legacy formats to integrate smoothly and perform well in a new Web environment. In this view, Office is the mainframe in a Web world. The enemy is a new class of Java apps or applets that will make Office irrelevant in a few years.
  • Netscape's Communication/Collaboration strategy. Netscape represents a whole new way of thinking about how people will work and collaborate in the future. The argument here is that Office was built on a set of assumptions that begin to lose validity in terms of what people will want to do in an Internet environment. Rich document types that include voice, video, images become increasingly important- our app centricity can hurt us here. An increased demand for searching, navigating, organizing and viewing data become key new requirements. Information flow becomes critical. The threat is that Office documents become less relevant in the space of new documents that are being created. To the extent that we don't optimize for this new environment, our current user base will find Office less relevant over time.
  • We fail to attract a new set of users. Stevesi has pointed out that a key threat to Office may be our inability to attract a broadening set of users within corporations. These new users are those people that are not using our products today. These users do not "author" information, rather they consume, review, consolidate and make decisions with the data that is presented to them. Office's feature set is not targeted at the online information consumer, but rather the information creator.
  • We fail to attract developers to build solutions using Office. We haven't given this one enough attention in our '98 discussions. It is very important for us to make sure that we have a class of ISVs, SPs, and MIS individuals that target Office as a platform. The current set of Web tools are difficult to use and many of them are proprietary. We will be successful to the extent that we can offer both Office services and industry standard (or at least Microsoft standard) Web services to these developers.

Vision and Objectives. We need to communicate an overall Vision for the Office product and corresponding objectives. These objectives should be pretty high level and easy to understand. Again, these objectives should translate the threats into actionable areas that we can base product decisions on. Given the above threats, I'll list a set of objectives I think we should consider. I'll leave the Vision statement to someone else.

  • Make Upgrading to the new Office9 environment a "No Brainer". This objective is about what we will tell our sales force next year when we are ready to have them sell the next version of Office. It is about the "value proposition" of why people should upgrade. It is not about the Web per se, but about the benefits that users derive from the Office product. When we talk about Office features, we should be thinking about how each feature fits into one of those "buckets".
  • TCO - This includes everything from frictionless upgrades, integration with SMS, easy access to our Office Web site, super easy installation, central administration, scalability, etc., etc.
  • Office is the best place to "Navigate and Find Information". There is a lot of work that we need to do in order to help Office workers navigate and find information in a world where information is growing at exponential rates. This is independent of the Web, but becomes oven more critical in the context of the Web.
  • Office is the best place to Organize your data. This is the flip side of navigating and finding data. We need to help the Office worker easily organize his/her data once it has been found. A logical place to think about doing this is in Outlook which already has the concept of folders, multiple namespaces, viewing and filtering.
  • Office is the best place to Communicate and Collaboration. Much has been said and written on this topic, but we need to make sure that each application fully enables collaboration and communication. Users will want to know: who authored this; who else has read it; who can help me with it; who can I respond to about it or discuss it with, etc.
  • Office is the best place to author and analyze your data. We need make is super easy to create documents that are rich in content. We also need to make it easy for users to interact and analyze information once they have it on their desktop.
  • Build for the Web. Office needs to look like an integrated product built for the Web. This of course means very different things to different people, so we need to be crisp about what we mean here. In building for the Web, it is interesting to ask ourselves "What's Changed"? In short, we now live in a very connected world driven by internet protocols (TCP/IP, HTTP), common naming conventions (URLs) and a common data exchange format (HTML). The implication is that we can now reach a much larger set of users than in the past. This represents a tremendous opportunity to us. However, this now class of user is more concerned about collaborating and consuming information than about authoring it. They will want much richer documents (images, voice, video, etc) than we have provided in the past. They will need better tools for searching, navigating, organizing, and viewing data. These new "Information Consumers" live on information flow.

There are different ways we can approach the opportunity that the Web provides us. As noted above, I think that Stevesi's focus groups will go a long way in terms of making sure that we have a much more consistent story, but I think that there is a higher level set of issues that we need to address. For example, how far do we go in terms of Componentization, what is our shell story, how does each group take advantage of Normandy, or Exchange or Denali. Here are some ideas Craig Unger and I have been talking about over the last couple of weeks in preparing the Access product plan.

  • Componentization. I'll argue new major product features should be wrapped as components. There are notable exceptions to this rule, but the point here is that we shouid be thinking about componentizing ourselves as much as we can. For example, Access/Excel shouid build a reporting component "aka Live Reports" that can be used by Excel and Access, but also is suitable for the Web. If we build a new List manager (Table by data) this should also be built as a component. In the short run it may be easier for products to think about building functionality into their own respective shells, but we should attempt to build new functionality that is "shell neutral".
  • Web UI. We should explore new and innovative ways in which present our UI in the Web browser itself (or within the Office/Outlook shell). If we are successful here, Office will keep the user "in context", since our users will spend an increasing amount of time in the browser. The WEB UI can also serve to simplify our products.
  • Office Client shell. Extend Outlook to be the Office Shell beyond its current functionality to include a rich set of services available to all Office apps. This includes email, and collaboration, finding and filtering data, organizing information (Outlook already does a credible job here). There are other services that this shell can provide such as annotation, UI customization, and incorporating "smart agents" to manage your information. Stevesi rightfully points out that Outlook may already have too many things going on in it to take on additional roles. The key point here is that each app should not have to worry about such areas- imagine if Escher were integrated only once in Outlook instead of by each individual app. We have a tremendous opportunity to really increase the synergy between all the apps, and at the same time provide a set of services and functionality that no app presently is doing. We need to see ourselves living in a world where we add value on top of those shell services.
  • Office Server. We need to build a document server a la BrianMac's memo...i.e.., some key features are: automatic replication, better searching and access to documents, content indexing, versioning, check-in / check-out, etc. In some ways, it is less important who builds this, but Office needs to generate requirements so that we can leverage the technology. Right now, we do not have critical mass in Office thinking about this.
  • Leverage each other's technology. We should look at emerging technologies across the company to see what we can leverage. One ripe area to explore is Office/BackOffice integration. Access and Excel both need to leverage SQL server. Access and Outlook need to leverage Exchange. But there are other possibilities too- Office should look at leveraging Denali, Normandy and Merchant Server.
  • Office is the best place to build your "Office solutions". The third objective that I'll propose is all about how we can leverage the developer in building Office solutions. Another way to view this objective is to think about Office as a platform. Note that I am not saying that we need to turn the core Office product into a development environment. In fact, one could argue that we should take VBE out of the core Office product and put it into an Office developer box. We need to leverage the work that is going on in the Tools area, as well as making our individual products play together much more effective so that people can build solutions using our products.
  • Provide smooth migration into developer focused tools such as VB and Istudio
  • Integrate Technology such as Terra Cotta into Office
  • Think about really investing in a "Developer Office SKU"... we sort of have this with the ODE, but the functionality con be extended.

Assumptions. It is important for us to make several assumptions if we are going to give clear direction to our respective teams. The assumptions are of course tied up in many different areas. First and foremost we need to decide what we think our threats and key areas of innovation are... this will lead to lots of progress. Next there are a bunch of second level sets of assumptions, and as each team starts to move forward, we'll continue to add to this list. I'll list a few areas (primarily for illustration purposes) that need to address. There are many others.

  • The role of Trident (I'll argue that we should put a stake in the ground and use Trident)
  • Role of Java
  • Cross platform assumptions
  • Crosss browser assumptions
  • Dates and deliverables
  • Dependencies on other groups

Scenarios. In order to evaluate whether our product meets the product objectives listed above, it is important to evaluate ourselves in the llght of a set of scenarios. We should be able to ask ourselves "Does this help us to solve such and such problem"? Obviously there are literally thousands of different scenarios that we could think about building around. We need to make sure that we have covered the critical ones that Office think are most important... i.e., those that counter the threats listed above. Office as a group needs to address this question, but just as importantly, each product group should define their scenarios in light of what we think the threats/assumptions and objectives are.

- richard

-----Original Message-----
From: Steven Sinofsky
Sent: Monday, November 11, 1996 11:50 PM
To: Jon Reingold; Eric Michelman; Jon DeVaan; Andrew Kwatinetz; Alex Loeb; Craig Unger; Larry Engel; Ralf
Harteneck; Richard McAniff; Marc Olson; Peter Pathe; Kathleen Schoenfelder; Dawn Trudeau; Brian MacDonald
(Exchange); Richard Fade; Chris Peters
Subject: Office 9 focus areas
Sensitivity: Confidential

A note up front, these notes are more than we actually talked about so it is possible that there is too much here that folks don't agree with. A lot of conversations have taken place on this subject among program managers and PUMs so this attempts to roll those up into one piece of mail. Any errors or major leaps of faith/logic/guts remain mine.

Comments Welcome!

This mail contains the straw-person feature/focus areas for Office9 we talked about today. These are meant to be focus efforts that last the entire length of the product cycle (i.e. these aren't program manager task forces) and the hope is that we can find a way (from the PM perspective) that all of our features easily fit into these buckets (not in a convoluted way, but in a straight forward way). This will allow us to more easily make tradeoffs and to make sure we have a consistent product that meets some specific needs.

The best way to meet needs is to define scenarios based on research that each of these areas will use as design constraints. For many of these the work is already underway. Some will be harder since they are based on "unarticulated" needs (such as how does office play on internets when everything thinks internet=notepad). The program manager owner of this area working with product planning where appropriate will be responsible for these scenarios. A clear vision for this focus area will include some specific scenarios.

A main goal of these focus areas is to make it easier to decide cross-product issues. The people working on this area are responsible for the implementation of their work in all the applications (Word/Excel/PowerPoint/Access, not Outlook right now). There will be development and testing with a similar focus.

We will also be prioritizing these areas in terms of a product vision which will help to enable groups to make tradeoffs, either in designs within their group or across groups for resource allocation. It is fair to say that at this point TCO ranks #1 (so decisions that are a negative impact on upgrade are bad) and Web Client/Server are tied at #2, most likely siding with the client if we have to since the server will require additional infrastructure which we can't always count on. The other areas are relatively orthogonal after these.

The time frame for this release will be less than 18 months and probably scheduled for around 12-15 months. This depends on two things: the Mac and getting some specs and estimates very soon. The resource allocation to both Office9 and across these areas will be determined based on this first round of feature list generation and normal cuts. The assumption, in terms of process, will be that we will be much more fluid about moving resources across these areas as we get started.

There are some other key assumptions we will generate over time in the areas of: hardware, platform, system services (trident, denali, IIS), working with netscape/apache, etc.

Finally, although there have been lots of discussions about organizations, this mail is about focus and technology. RichardF has been thinking through the organizational issues associated with setting up a structure that will ensure that we can build a great product with the minimal amount of organizational friction.

Major Areas:
TCO: This group owns the issues associated with the deployment and management of Office9 as well as the upgrade and interoperability issues. The key things to think about are setupless applications, self-repairing applications, applications that can discover features, http://office for locating components and installing on the fly, management/logging of the use of office in a corporation (SMS-like/integration). It is important to solve the problems associated with free-seating/roaming users as well. Our setup technology fits in this group as well.

Web Client: This includes work that makes each application a great client on the new browser platform. This means we look into specifics about being an activex control, documents as mail notes, and the use of HTML forms as the programmability container for solutions. The definition of HTML for Office9 would also be in this group. An important part of being a web client is participation in collaboration and what we called workgroup in 97, so this group would own this as well [brianmac].

Web Server – Leveraging a web (nntp/internet) server as a key way for users to store, collaborate, locate, and distribute documents is the central focus of this group. This also includes tracking user preferences (as part of free seating), personalization, and general services for each user of Office that would best be served by residing on a server.

Graphics and PowerPoint – What Ralf said about preparing and delivering presentations. In addition, this group would own taking our graphics efforts and moving them forward.

Word Processing/IntelliSense/Assistance – This area would focus on making the best editing and authoring tool. The core wordmail work would be in the Client team (most likely) but many of the other features mentioned in the word9 plan would fall into this category. Because of Word's traditional focus on ease of use and because of the code issues this group would also own our ease of use message. Assistance would also be driven from here. [See late breaking proposal at the end.]

Components [and Content] – This group would own the component aspect of Office9. This includes charting, OLE servers, and a great deal of shared infrastructure which might include DAO, Jet, etc. (to the degree that we decide no to put these in other groups). This group would also focus on delivering the in-box content, coordinating with the RossH/SamH group.

Data Access/Reporting/Access/Excel – The primary focus on this team would be delivering on a strategy for providing the best tools for data on the web for end-users, including analysis and reporting, as well as web db application development for end-users. The plans outlined by Excel9 and Access9 are featured. By having these in one focus area we can drive a strategy and an implementation that complements each of these products. Basic use for spreadsheet input is also in here.

Programmability – The shared development model, object model, language implementation, use of Java, use of JavaScript/events, etc. fall into this area.

Outlook – being the Hub in a great way.

Notes:

Note 1: Andrewk suggested that the Word mission be moved into Web client, since nearly everything word wants to do is about being an HTML mail client and then breaking out IntelliSense/Assistance/UI into a single focus area. This sounds good to me.

Note 2: As we talked about a primary goal of this is to reduce the number of poeple that need to meet about the whole product. So there is still a desire to reduce the total number of these groups (currently at 9). One thought is to put programmability in with one of hte web groups (client or server, depending on Note 1).

Note 3: Office Shell is something that severa have mentioned (brianmac, richardm, craigu). This is something that we should understand better and factor in appropriately.

2585
2586

PLAINTIFF'S
EXHIBIT
2586
Comes v. Microsoft


Lesley Halverson (LCA)


From: Steve Ballmer
Sent: Sunday, December 01, 1996 9:25 PM
To: Bill Gates; Amar Nehru
Cc: Brad Silverberg; Brad Chase; Paui Maritz
Subject: RE: Netscape Revenues (Long mail)

I asked amar to send it broadly. I may have gone overboard. we should have been more precise that home page means ads of all kinds. sorry. The isv revenue we did not dig into it will have to lower one of our other estimates if sizable. we will brianstorm how to get a grab.

-----Original Message-----
From: Bill Gates
Sent Sunday, December 01, 1996 9:24 PM
To: Amar Nehru
Cc: Brad Silverberg; Brad Chase; Steve Ballmer; Paul Maritz
Subject: RE: Netscape Revenues (Long mail)

What kind of data do we have about how much software companies pay Nescape?

In particular I am curious about their deals with Corel, Lotus and Intuit. All of these ship a lot of units of Netscape. In our discussions we must have some kind of sense of the revenue which Netscape gets from this.

I was surprised at the ISP revenue being so high. The services revenue is NOT primarily from the home page as is stated in this report. Netscape does better selling things like the SEARCH button. Someone should be more concrete about what they get (non-barter) from the home page. I think its quite low.

I don't think this analysis needed to be sent to so many people.

-----Original Message-----
From: Amar Nehru
Sent: Wednesday, November 27, 1996 11:54 AM
To: Executive Staff
Cc: Linda Glenicid; Katie Bright; John Leftwich; Pieter Knock; Mich Mathews; Rosa Garcia; Susan
Norberg; Richard Liotta; Strategic Business Decisions; Business Development & Investments
(BDI); Joseph Lacson; Greg Maffei's Direct Reports; Debbie Hill; David Heiner (LCA); Bill
Henningsgaaard; Patricia Hollenbeck; Dave Wright (OEM); Bengt Akerlind; Arnar Nehru; Scot
Land; Carla Lewis
Subject: Netscape Revenues (Long mail)

*************** MS Confidential ************
Over the last two months, we have tried to develop a basic understanding of Netscape's business. Our intent is to better understand Netscape's strategy and future directions. We are trying to prepare similar reports on Lotus Notes and other businesses.

Given:
Netscape report revenues as follows:

  • Total product category revenues: ads and services; servers and browsers;
  • Total revenues by channels: direct (LORGs and online); ISP/OEM/VARs and retail.

What we don't kmow, for example, is how much browser revenue is generated by direct, OEM, ISP, VARs and retail respectively. Therefore, we have focused on trying to understand this level.

Process:
(a) We started with publicly available information for calendar Q2-96 (in bold in the exhibits); (b) we have coordinated with OEM, PNS, ECU, OCU and the field to develop our best estimates of the revenue generated by each product category in each of the channels for the second quarter; (c) we have polled some of the analysts to learn their view of the likely Q3-96 revenue splits; and (d) we have tried to predict the split of product and channel revenue for Q4-96 based upon the Q2 and Q3 information, trends impacting the industry and analysts' perspectives.

Though we are 70% confident about our numbers, we believe this is a decent platform to understand their business. The following three exhibits and accompanying discussion summarize our assessment.

(EXHIBIT 1)
<< OLE Object: Microsoft Excel Worksheet >>

[Ed: Two more pages omitted. See the PDF for these.]

Jump to: [0001] [0500] [0899] [1627] [2128] [2535_A] [2588] [2650] [3020] [3598] [4440] [5424] [6253] [6652] [7280] [8182] [8887] [9225] [10030]


Last Updated Saturday, March 22 2014 @ 05:17 PM EDT


Groklaw © Copyright 2003-2013 Pamela Jones.
All trademarks and copyrights on this page are owned by their respective owners.
Comments are owned by the individual posters.

PJ's articles are licensed under a Creative Commons License. ( Details )