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Feisty Bill Gates says Novell to blame for its woes

Published November 23, 2011 10:58 am

Antitrust • Microsoft chairman takes swipes at Novell in Utah trial.
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For two days, Microsoft Chairman Bill Gates sat in a Salt Lake City courtroom and contradicted point by point claims made by Utah-based Novell Inc. whose federal lawsuit alleges Gates violated anti-trust laws and caused the company to lose $1.2 billion.

Leaving the downtown courthouse Tuesday after finishing 11 hours of testimony, including Monday's, Gates said, "I'm glad I had a chance to clarify things."

Whether he did or not will be up to the jurors who still have three weeks of the planned seven-week trial before them.

Gates was strident and assertive in saying the decision over software codes in Windows 95 was not aimed at protecting Microsoft's products to the detriment of Novell's WordPerfect and spreadsheet Quattro Pro.

Instead, he said a group of developers feared the code in question could cause computers to crash and he poked at Novell for mismanagement, the lack of a winning strategy and poor execution during that whole era when Microsoft surged into a near total monopoly position in personal computer operating systems and its word processor became dominant.

Microsoft's trial attorneys were ebullient outside the courthouse Tuesday, saying Gates had given a strong performance. But Novell attorneys believe Microsoft provided Gates' version of events to try to cover its tracks during the mid-'90s period when it already has been found to violate antitrust laws and settled several suits.

The U.S. government's 1998 lawsuit against Microsoft accused it of anticompetitive behavior against Netscape's Internet Browser and Sun Microsystems' Java software because it feared they could become a serious competitor to Microsoft products. A judge found that Microsoft had a monopoly on computer operating systems and had used that position to try to crush threats to its business. After a victory in an appeals court, Microsoft settled the case and agreed to alter its practices.

In testimony Tuesday, Gates explained his decisions about the computer code in question at the trial this way: Separate groups of developers working on personal computer operating system Windows 95 and Windows NT, which was for servers used by businesses, had been told to merge codes between the two. But the Windows NT team was concerned the code developed for Windows 95 could cause servers to crash and harm businesses that depended on stability, he said.

"There certainly was one problem with them," Gates said under questioning by lead Novell attorney Jeffrey Johnson. "They didn't work in NT and NT [developers] didn't like them."

Johnson showed Gates various emails to Gates or between other Microsoft executives and managers that showed Windows 95 developers were enthusiastic about the software codes at dispute now in the trial and dismayed over Gates' decision not to support them. Those emails supporting the code included ones from Brad Silverberg, who headed the Windows 95 developers, and who had decided to include them in that operating system.

Gates kept returning to his explanation as Johnson tried to poke holes in his story by saying or inferring there was nothing wrong with the codes in question.

Gates also said his company monitored Novell and other rivals as potential threats to the Windows operating system in the mid-1990s, but that none ever materialized as a serious competitor. That was aimed at Novell's contention that Gates' 1994 decision was meant to protect Microsoft's monopoly on personal computer operating systems.

"We were very good at having almost a sense of paranoia about what might emerge," Gates said. "The key thing to watch was did anybody write applications for these things, particularly broad, rich applications, and that did not happen."

In a 1994 email, then-CEO Gates discussed a threat from Novell when he wrote, "I am amazed at their responsiveness. This is very scary and somewhat depressing. This is as much as we plan to do [with Word] for 1995!! A lot of work in this new release." But on the stand, the software giant's chairman testified he was only discussing WordPerfect's auto-correct and automatic list functions.

Another central question of the trial is whether WordPerfect and Novell could have taken another route to get the new version of WordPerfect and the speadsheet Quattro Pro to market within 60 days in order to capitalize on the enthusiasm for Windows 95, one of those options being to write their own code called an open file dialogue that would have circumvented the features Gates' nixed.

When asked about some of Novell's advancements with WordPerfect, Gates sarcastically responded, "It looks like WordPerfect was able to write an open file dialogue. It's amazing. How did they do it?"

Novell blames its delay in getting out Windows 95 versions on Gates and said his decision caused Novell to lose $1.2 billion in value when it sold WordPerfect and Quattro Pro in 1996 after owning them for less than two years.

Gates said Novell's software suites were hindered by "disorganization" between WordPerfect and Quattro Pro after Novell bought them in 1994. Gates also said Microsoft was concerned about a deal between Novell and Netscape, but added that turned out to be "one of the most dysfunctional business relationships of all-time."

Gates and Johnson sparred back and forth for most of the day, leading Judge J. Frederick Motz at one point to intervene.

"I don't want any more commentary," the judge told Johnson. "I want questions and answers. Let's get to it."

Microsoft attorney Steve Aeschbacher said the company planned to call witnesses during the next three weeks who will bolster Gates' testimony.



Twitter: @TomHarveysltrib —

Bill Gates in Salt Lake City

Microsoft co-founder and Chairman Bill Gates spent two days in Salt Lake City to testify at a trial in federal court, escorted by a security and public relations retinue.

A spokesman said, for security reasons, he couldn't disclose where Gates slept while here but that it was somewhere in Salt Lake City.

However, Gates did dine Monday at the Sawadee Thai Restaurant at 754 E. South Temple. "He said he enjoyed it very much," said Tim Brown, of Richter7, who is assisting Microsoft with public relations during the trial.

Gates left Utah quickly after he finished testifying.

Gates, who tops the Forbes list of the richest Americans at $59 billion, also was in Utah in 2010 when he appeared at the Sundance Film Festival in Park City.






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