Microsoft's (MSFT.O) WinNT "Blackmail"? ....

At the time IBM (IBM.N) and Motorola (MOT.N) announced their "abandonment" of the WinNT PPCP port, RFI received numerous reports that the main reason why both "abandoned" the WinNT PPCP port (which RFI mentioned last fall) that Microsoft (MSFT.O) demanded that they pay Microsoft "large sums of money to port WinNT 5.0 to PPCP." Figures started at US$100 million and went up from there.

At the time, RFI shrugged off the reports, from inside the key players in the fracas, to "a simple business decision". Microsoft for wanting IBM and Motorola to pay for the port of WinNT 5.0 to PPCP, and IBM and Motorola replying (paraphrased): "Fine. We're not paying. Do it yourself..."

It was only after IBM and Motorola declined to pay for the WinNT PPCP port that Microsoft then, and only then, decided not to port WinNT to PPCP. Again, that is a business decision for Microsoft, but when a company holds an effective and virtual monopoly on desktop Operating Systems, it also implies something else.

FWIW, in July 1995 RFI reported the "embarrassment" that WinNT would be on PPCP versus MacOS and why Microsoft would not want its vaunted WinNT compared "Apples to Apples" on one chip/one box that PPCP would glaringly point out. Especially since, at the time, WinNT 4.0 was in the works and relied on Insignia Solutions (INSGY.O) emulation to enable it to run on PPC chips.

RFI's "Dr. PHIC" (a WinNT 4.0 beta tester and certified Tech/Trainer, etc.) told us so; even before Win95 went "Golden Master". Never mind that he told us all of the problems Win95 would have upon its launch, as well as the four known bugs that were being shipped with the release because "Microsoft would rather ship bug ridden software than miss the August 24th launch date.." But we digress.

Ergo, since Microsoft wasn't going to have its R&D paid for by IBM and Motorola, it subsequently floated the notion last fast that it wasn't going to "support" PPCP in future versions of WinNT, beyond 4.0.

After, and this is extremely important, Dr. Amelio gave his "Telegraphed Punches" in the Forbes interview (his first with a financial publication since taking the helm at Apple) that the next MacOS would not only run on Mac boxes (PPC/PPCP) but Intel/X86 boxes as well, ti include running Windows applications, all "support" for WinXX on PPC/PPCP evaporated like the dew in the desert on a summer morning.

Then, after Apple's NeXT acquisition and further "telegraphed punches", Microsoft "support" for PPCP WinNT and even Microsoft "support" for "Rhapsody" disappeared at Microsoft like a pet alligator down a New York toilet after it grew too big to be satisfied by the morsels tossed to it. Unfortunately, for the flushers, that "baby alligator" thrived and grew in the environment into which it was tossed.

Which brings us to the current state of affairs vis-a-vis: PPCP, Rhapsody, Apple, Macintosh, etc. Microsoft "reissuing months old news" when the "Rhapsody on Intel"/MacTel stories were breaking, and being dutifully picked up as "fresh and new" by the media and dutifully/sloppily being reported as "news". Unfortunately, their credibility was severely damaged with those who "knew better", as well as reinforcing the notion that a lot of the financial media does "reportage by press release" rather than digging out stories. Liken this incident to the networks reporting as "news", on President Clinton's second Inauguration Day that Bob Dole lost the election. You get the idea.

Which brings RFI to posting the compilation of our "Recon" in the "MacTel Boxes" item on our Apple Recon web site. The majority of which was "old news" to RFI subscribers but sent ripples through the Internet and beyond. Yes Virginia, RFI mentioned this as far back as late October 94 when we reminded everyone of Apple's CHRP/PPCP "goal" of making the OS one of preference rather than default.

So, while Microsoft was more than willing to initially allow "Free Market Competition" on PPCP boxes, it suddenly did a 180 when it realized that it would be facing "Free Market Competition" on its home turf (X86) with the Next MacOS. Ergo, the alleged (and we stressed alleged) "WinNT Blackmail" ploy with IBM and Motorola as well as rebuffing Apple in its quest to license WinNT and its kernal.

As well as Mr. Gates' comments about his "confusion" over Apple's Rhapsody strategy, and his subsequent questioning as to whether Microsoft would continue to support the Mac platform once Rhapsody is released. While no one bothered to pin Mr. Gates down to his "confusion" or abandoning a market of over 25 million users, they should have pinned him down. Why? In order to learn why the 180 from last summer when Microsoft, with Mr. Gates' blessing no less, decided to assist in boosting Apple's market share (RFI's "Antitrust Red Flags", May - July 96) as well as stating that they intended to port everything they had to the Mac. "Something" changed, and it wasn't Apple's market share or future prospects; both were more "dismal" then than now.

Mr. Gates has good reason to be thankful that no one tried to pin either him or Microsoft down; as well as good reason to be "fearful" if WinWorld users have a "Not WinTel Standard & Strategy" (RFI Mar 96), or even a "Not WinXX" option. Which is what Rhapsody, PPCP and MacTel Boxes (Rhapsody on Intel/X86) give WinWorld users.

Microsoft is "confused" because it would face home turf competition for the OS on the X86 boxes that would prove to be more "flexible and functional" (where have you herd those words before?) than Win95/97/NT on Intel/X86 boxes that would also run Windows applications; as well as the "threat" that the WinTel users will migrate away from WinTel to MacTel and even PPCP once they became accustomed to using Rhapsody with their Windows programs. And as long as Mac wasn't on Intel/X86 to be compared "Apples to Apples" on its home turf, Microsoft could get away with a lot.

And both Microsoft and Intel would be "confused" and threatened by the PPCP port of Rhapsody even though Intel would have the MacTel port. Why? Microsoft for the previously stated reasons, and Intel because the PPCP Rhapsody port would have the: Yellow Box, Red Box and "Blue Box" (MacOS 7.X) compatibility; while MacTel would only have the "Yellow Box" (Rhapsody) and the "Red Box" (Windows Application compatibility). And, WinNT can't compete with either MacOS 7.X or Rhapsody on PPCP. Ergo, Microsoft's "abandonment"/retreat from a "fair fight" it knows it cannot win.

Bottom Line? Microsoft already has more antitrust problems with the Justice Department than a junk yard dog has fleas; so they don't need any more problems. However, the Justice Department's Antitrust Division has been handed an even greater amount of fodder for its cases if the "WinNT Blackmail" reports and rumors are only partially true.

And, as RFI opined long ago: Any settlement/judgement/decree would almost inevitably result in Microsoft being hobbled (like IBM was for a generation) and split up (like AT&T) but with thousands, possibly millions, of competitors flooding the breaches the decree would enact. Just as IBM "lost" its proprietary architecture for making PCs, and spawned the Tech Sector of today, Microsoft would be hacked to so many pieces in such a decree that it would resemble a failed attempt at worm dissection in first year biology.

However, there are "cracks" in the WinTel hegemony and "WinNT Blackmail" now that Rhapsody and MacTel are "out in the open". Now, all Apple has to do is deliver not only Rhapsody but MacTel on time and as promised. We'll keep you posted...

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