McNealy, Ellison call for Microsoft bust-up

The chiefs of two of Microsoft's bitterest rivals have called upon the government to bust up the software giant

Appearing separately in Los Angeles and Las Vegas, Larry Ellison of Oracle and Scott McNealy of Sun Microsystems stumped on behalf of stiff remedies against the software giant. (Meanwhile, Microsoft CEO Bill Gates once again publicly raised the possibility of a deal with the government.)

Ellison and McNealy regularly lob verbal bombs at Microsoft, but their comments took on heightened significance as they came only a couple of weeks after judge Thomas Penfield Jackson rebuked the software maker as a predatory monopolist. Many legal experts believe the judge will determine that Microsoft broke the law when he issues his conclusions in the long-running antitrust trial.

Although a breakup is considered an extreme remedy, Ellison told reporters at Oracle OpenWorld the government should break Microsoft into three companies in response to Jackson's findings of fact.

As for Microsoft's workforce, Ellison proposed that the three companies select the programmers in a draft, in much the same way that professional teams select college basketball players. Furthermore, he said those three companies should each have rights to Microsoft operating systems and software, to compete among themselves for market share.

"It's a fascinating dilemma for the government," Ellison said. "There are a lot of regular John Q. Publics out there who own Microsoft. They're hostages standing between (Microsoft) and the government."

Ellison also said he was concerned by recent reports that Microsoft's Internet Explorer browser has opened a wide lead over Netscape Communicator in corporate deployments, and by continued Communicator upgrade delays.

Ellison blamed Microsoft for "destroying" Netscape, now a subsidiary of America Online.

"Bill Gates said he was going to put Netscape out of business, and he did," Ellison said.

Meanwhile in a Comdex keynote, McNealy also took aim at the Redmond giant. He called for a breakup of Microsoft if it fails to comply with the remedies that Sun recommends be imposed on the company.

In a question-and-answer session following his keynote, McNealy said Microsoft should be required to end preclusive agreements; open its APIs (application programming interfaces); adopt transparent pricing so it "can't hurt IBM because IBM makes mainframes and Dell does not"; and stop using its "monopoly money to leverage its monopoly in other areas."

"Do you know any other company that operates at 51 percent pretax margins, other than the IRS?" McNealy asked.

"All Microsoft should be allowed to do with its monopoly money is give it back to the shareholders. Or they could put it into research and development so they could truly innovate and not confuse R&D with M&A (mergers & acquisitions). They are incorrigible."

McNealy hit on the "Microsoft as monopoly" theme throughout his keynote at Comdex. His opening act was a pair of magicians who transformed a box of Windows into a Monopoly game.

After the Las Vegas set collapsed following a rendition of "Breaking Up is Hard to Do," he offered a list of the "Top 10 Signs Microsoft has Bought 20 Percent of Las Vegas." Selections included "the pirates in Treasure Island really steal your money" and "the showgirls strip down to their Visual Basics."

"(In the future) the computing industry is going to look much more like the telephone industry -- with centralised hardware and services for a fee," said McNealy, pointing out that such a future would not need a Microsoft.

"The last 20 years have been all about the about the OS industry -- or more like the OS company," he continued. "But I have to ask: What's the OS in your cell phone? You probably don't know and you shouldn't."

"When you buy applications, five of the top 10 are used to fix the damage you did with the first five," he said. "Are you ready to spend five to eight hundred dollars for Windows 2000 (and Office 2000) -- and help debug it?"

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