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From: reisert@mast.enet.dec.com (Jim Reisert)
Newsgroups: comp.sys.ibm.pc.misc,comp.os.msdos.misc
Subject: Bill Gates, in memo, warns of attack and defeat by rivals
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Date: 20 Jun 91 17:12:41 GMT
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 Microsoft - Gates, in memo, warns of attack and defeat by rivals

	{The Wall Street Journal, 19-Jun-91, p. B8}

   Mr. Gates' state of mind is evident in a memo he wrote in April to his top
 executives in which he said that some of his worst fears were coming true:
 "Our nightmare - IBM 'attacking' us in system software, Novell 'defeating' us
 in networking and more agile, customer-oriented applications competitors
 getting their Windows act together - is a reality." The memo was obtained by
 the San Jose (Calif.) Mercury News, which quoted from it in a story published
 in its editions yesterday. The authenticity of the memo  was independently
 confirmed by Microsoft. ... Though Mr. Gates publicly insists he still has
 plans for OS/2, an alternative piece of the software that IBM and Microsoft
 formally are jointly developing and Mr. Gates once heralded as the standard of
 the future, he indicates he has relegated OS/2 to oblivion. "Our strategy for
 the '90s is Windows - one evolving architecture, a couple of implementations.
 Everything we do should focus on making Windows more successful," Mr. Gates
 wrote, according to the San Jose Mercury News. That position angers IBM, which
 paid Microsoft huge amounts of money over the years to lead OS/2 development.
 Frustrated with Microsoft's stance, IBM began directly pushing OS/2. The split
 has had unintended benefits, writes Mr. Gates, who complains that the
 partnership with IBM forced Microsoft to accept "poor code, poor design and
 other overhead." Ironically, in his memo, Mr. Gates instructs his senior staff
 to refrain from publicly criticizing IBM, advising that they "not attack IBM
 as a company, and even out public 'attacks' on [IBM's] OS/2 will be very
 professional." Mr. Gates, known for playing hardball with both rivals and
 allies alike, makes it clear that such restraint is self-serving. "Eventually
 we need to have at least a neutral relationship with IBM," he writes. "For the
 next 24 months it may be fairly cold. We can emerge as a better and stronger
 company where people won't just say we are the standard because IBM chose us."
 Among other observations, Mr. Gates writes:
   -- Losing the legal battle with Apple Computer Inc., which is fighting in
 court to prove Microsoft copied some key features of Apple's Macintosh
 software for its own Windows program could be "disastrous."
   -- The current Federal Trade Commission investigation into allegations of
 unfair business practices by Microsoft "will use up even more executive staff
 time than the Apple lawsuit has. However, I know we don't get unfair
 advantages. I hope we can quickly educate the FTC on our business."
   -- Microsoft isn't doing an adequate job responding to customer inquiries
 about its products. "The number of customers who get a bad impression because
 of this must be in the millions world-wide."

=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

"The opinions expressed here in no way represent the views of Digital
 Equipment Corporation."

James J. Reisert                Internet:  reisert@mast.enet.dec.com
Digital Equipment Corp.         UUCP:      ...decwrl!mast.enet!reisert
146 Main Street			Voice:     508-493-5747
Maynard, MA  01754		FAX:       508-493-0395