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Microsoft on Trial: IBM a thorn in Microsoft's side?

Ever since the government took Microsoft Corp. CEO Bill Gates' deposition last summer, IBM's on-again, off-again relationship with Microsoft has been a sore spot prodded by lawyers on both sides of the landmark antitrust case.
Written by Mary Jo Foley, Senior Contributing Editor

Consequently, Monday's decision by the U.S. Department of Justice to call as a rebuttal witness a former IBM software group executive isn't so unusual as it first might appear.

The witness -- Garry Norris, currently a program director with IBM's networking hardware division -- formerly held a software strategy position within the company. But rather than represent the OEMs' viewpoint, as many expect, Norris is more likely to address IBM's position vis-a-vis Microsoft as a software developer when he takes the stand later this month or next, when the antitrust case resumes.

IBM's dual role as hardware and software provider, not to mention its role as a long-time Microsoft operating-system adversary, has resulted in a complicated, multifaceted relationship with Microsoft. This role did not go unnoticed by Gates himself. During the course of his deposition, Gates admitted that Microsoft's relationship with IBM has been thorny, at best, especially because IBM markets a number of products and technologies which compete head-to-head with Microsoft offerings.

In an e-mail message, marked Government Exhibit 400, Gates wrote that "Overall we will never have the same relationship with IBM that we have with Compaq, Dell and even HP because of their software ambitions. I could deal with this just fine if they weren't such rabid Java backers." In the same e-mail message, Gates expressed displeasure with IBM's network computer "rhetoric". Lead government prosecutor David Boies asked Gates about the meaning of his e-mail statements repeatedly during Gates' deposition. (See Bill Gates' full deposition.)

A number of IBM officials have been deposed and/or appeared as witnesses during the ongoing DoJ vs. Microsoft court battle. Back in the autumn of 1997, another North Carolina-based IBM official was deposed on the issue of Windows 95 OEM licensing terms required by Microsoft. Much of his deposition was redacted, and any disharmony between IBM and Microsoft paled in comparison to that expressed by officials with other OEMs, such as Compaq Computer Corp., Gateway Inc., Micron and Packard Bell/NEC.

IBM's head of network computing services John Soyring testified in November last year at the trial, answering questions about IBM's decision to preload browsing software with its OS/2 operating system. During his two days of questioning, Soyring was asked little specifically about the IBM-Microsoft relationship, however -- a somewhat surprising fact, given Soyring's knowledge about the history and developments leading up to Microsoft's and IBM's rocky operating system relationship. (See John Soyring's full deposition.) A handful of other IBM officials have been deposed during the past couple of years, as well, including various OS/2, WebSphere, AIX and Java product officials.

The naming of Norris as a rebuttal witness seemingly couldn't come at a worse time for IBM, which -- at least in recent months -- has gone out of its way to bury publicly the hatchet with Microsoft. IBM's Software Group, in particular, has made a concerted effort to make nice with Microsoft. At Spring Comdex in Chicago last month, that group announced it was porting more than 300 of its software products to Windows 2000. IBM's NT Solutions division has participated in Microsoft's First Wave software developers' program since 1997, with Microsoft providing that division with early access to beta software and product/strategy information.

IBM's PC and server divisions have been equally vocal about their support of Windows 2000. "IBM's testifying could be a big deal for both companies [IBM and Microsoft]," says Dwight Davis, an analyst with Summit Strategies, based in Kirkland, Washington. "Two or three years ago, IBM was clearly in the anti-Microsoft camp, but lately they have tried to walk a fine line and not be quite so anti-Microsoft as some other companies. "Depending on how the testimony goes, it could put a chill in the relationship," Davis continues. "Within IBM there's the full spectrum of feelings toward Microsoft. It's a large company. IBM is clearly disengaging from PC and Windows dependency, but from their own experience, they know how long it takes for platforms to turn over. IBM won't burn its bridges, but maybe they'll push the envelope a bit."

IBM officials declined to comment on the significance of Norris' upcoming court appearance.

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