MS on Trial When the only tool you have is a hammer, every problem looks like a nail. And when you're Bill Gates, it seems, every competitor is using proprietary protocols against you.
That - and much more - emerges from two more extraordinary Microsoft memos unsealed by the US Department of Justice (DoJ).
The memos were written less than a year apart, and detail two meetings between the then Microsoft CEO and Nokia CEO Jorma Ollila - who Gates carelessly refers to as "Jurma" throughout.
They're extraordinary largely because they reveal the extent to which Bill Gates fails to grasp the wireless marketplace. But even more so, they recount his recurring fantasies that competitors are using proprietary standards against him, and his reflexive resort to Microsoft patents. No prcis can quite convey the paranoia of the originals, where the fear and loathing is palpable. And we've only got the portions that haven'tbeen redacted.
The first of these memos, written a fortnight after Nokia, Motorola and Ericsson had formed Symbian, begins with the hurt of a lover spurned.
"If they had come to us with Ericsson/Motorola we would have loved to do a Symbian type deal. I made it clear we were very disappointed and upset they didn't ever talk to us..."
Well, The Register was on hand when Symbian launched and it was plain from the Nokia and Ericsson executives that day that not only was Microsoft's technology not there, then even if it was, neither company had the slightest wish to cede control of the platform to Microsoft.
Hi Ho, Hi Ho, it’s off to work we go
Gates also tried to dissuade Motorola from joining Symbian, before deciding on a strategy:- work with the Symbian partners on PBXs, work "hardcore" with the smaller manufacturers Gates describes as "the seven dwarves", and ominously "work with CDMA".
Already Gates had conceded that GSM - the global wireless air interface in all but the USA and Korea - was a difficult pitch. But the paranoia is setting in as Bill weighs up a prospective alliance with Sun Microsystems. "There is no reason for them to do any of this except to attack Microsoft. Using SUN [sic] is just declaring war on us. The Nokia CEO seemed to appreciate how hardcore I was on this."
Gates then suggests witholding Microsoft co-operation from other joint ventures with Nokia until the handset platform has been resolved.
Which, with a crash of the cymbal, is presumably why the DoJ saw fit to release the memo now. But far more telling is Gates' analysis of the Symbian business model. Bear with us.
"Symbian is bad for us no matter what. But Symbian is SUPER bad for us if... Symbian is going to create proprietary protocols so that other devices have to pay them royalties if they want to interoperate."
Reflexively reaching for his protocols, Bill adds:- "We have not done this on the PC [are you sure - ed?] actually I think we should in a few areas but that is another discussion"[emphasis added].
Gates recommends action to "patent our schemas... we can't be asleep on key issues like this". A little further in, Gates affirms his belief that Symbian can only work if it's own products are proprietary:- "In the long run these products will be hyper competitive unless Symbian uses patents to block entry, which it seems is what Symbian is all about."
Let's take a step back for a moment. The DoJ released this memo because of the threat of retaliatory action. But wait -what patents can Bill possibly be thinking of? The fragile nature of the Symbian agreement - with competing handset manufacturers basically agreeing on interoperability, or nothing - means that no member can possibly pull a stunt like this alone. The only way they can cook up some patents to exclude future licensees is to act together, or in other words, leverage their dominant market position.
It's a pretty revealing sentence. Gates simply can't see how the consortium can find its way to success without acting anti-competitively. We know that Symbian's business model is straightforward: license the OS at $10 or $5 a shot and build a mass market. But for Bill, the prize isn't about success, it's about abusing that success - creating the right to charge monopoly rent. We've read a lot of words in this trial, but few can be quite as self-incriminating. ®