Programming Windows: David vs. Goliath (Premium)

When Microsoft pivoted to embrace the Internet, it quickly identified Java and Netscape Navigator as the two key middleware threats to Windows. Its aggressive response to those threats prompted the U.S. Department of Justice (DOJ) to investigate the software giant and then charge it with sweeping antitrust charges.

Netscape played an outsized role in the resulting historic trial, overseen by U.S. District Court Judge Thomas Penfield, in part because it was younger and smaller than Java maker Sun Microsystems. And because, by the time the trial started in May 1998, Microsoft was already well on its way to destroying Netscape.

Sun was the more powerful adversary. But Microsoft’s strategy for embracing and extending Java, eliminating Sun’s control of the platform while doing so, was consistent with what it did to Netscape and the web. And by the time its antitrust trial was underway, Microsoft had already created a version of Java, and software development tools to support it, which outperformed Sun’s own offerings while negating the platform’s cross-platform benefits. So Sun sued Microsoft separately from the U.S. government, seeking to prevent the software giant from usurping its platform. But Java figured prominently in Microsoft’s antitrust case as well.

Microsoft argued in court that it had done nothing wrong. It noted that it was the “largest distributor” of Java because it built the technology into its successful Windows and Windows NT products. And it wasn’t “polluting” Java, as Sun had complained to the DOJ, but was rather making the platform run “faster and better” than with Sun’s own version. Yes, the firm’s lawyers admitted, Microsoft did create developer tools that allowed programmers to write Java applications that could directly access Windows features. But “Microsoft has not required anyone to take advantage of that option,” it claimed.

On the face of things, these claims were true. Microsoft did create a Java Virtual Machine (JVM)—the software environment in which Java applications run—that ran “faster and better” than Sun’s original version, and it even ported this JVM to the Mac. And Microsoft did create developer tools, part of a product called Visual J++, that allowed developers to write both standard Java applications and full-featured Windows applications. It seemed that Microsoft had simply improved Java, and that Sun should be thankful, not litigious.

Unfortunately for Microsoft, there was a lot of evidence to the contrary, most of which came in the form of its own internal emails.

Microsoft epic antitrust trial is still remembered today for several dramatic moments in which clips of CEO Bill Gates’ videotaped deposition were played ahead of the presentation of email evidence that completely refuted what Gates claimed. Gates was sullen and surly throughout the deposition. And he frequently clashed with the off-camera questioner over the most basic of terms and undermined his credibility by supposedly not remembering interactions that, frankly, anyone should have remembered.

“The William H. Gates on the courtroom screen … was evasive and uninformed, pedantic and taciturn, a world apart from his reputation as a brilliant business strategist,” The New York Times reported after one such clip was played in court.

Java figured prominently in the deposition.

When asked whether he had ever discussed undermining Sun and Java, Gates said he couldn’t remember, and didn’t know. When asked whether he had ever specifically discussed undermining Sun and Java with Apple, Gates replied, “I don’t think I was involved in any discussions, myself, with Apple about that.”

The questioner then handed Gates a printout of an email he had written to Paul Maritz asking him, “Do we have any clear plan on what we want Apple to do to undermine Sun?”

“What did you mean by that question?” he was asked.

“I don’t remember,” Gates said, disingenuously. Gates and Maritz had already plotted to withhold Mac Office from Apple’s platform if Apple didn’t support both Internet Explorer, Microsoft’s browser, and Java. Was Mac Office “very important to [Apple]?”, Gates was asked.

“I really have a hard time testifying about the belief of a corporation,” Gates answered. “I really don’t know what that means.”

“[In deciding] what you would ask of Apple, did you consider exchanging Mac Office for something you wanted?” he was asked.

“I have no idea what you’re talking about when you say ask,” Gates responded.

And so it went. Every time Gates dug himself a hole, he would be handed an email printout, entered into evidence in the trial. In this case, the email demonstrated that Microsoft was, at that time, seeking Apple’s help to undermine Sun and Netscape. Gates had instructed his lieutenants to explicitly dangle the threat of Microsoft canceling Mac Office and hiding from Apple how far along it was on the latest version of the product.

The email evidence was damning. And it made it clear that those responsible for implementing Microsoft’s Internet-related strategies knew that Gates wanted Microsoft to “wrest control of Java away from Sun,” in the words of Microsoft’s Ben Slivka, and to prevent Apple from aligning with Sun. “I don’t think that I would have put it that way,” Gates said when asked about the Slivka email.

In November 1998, IBM director John Soyring was on the witness stand testifying about Microsoft’s strategy against Java.

“Java also has the potential to undermine the Windows application advantage,” Soyring noted in his testimony. “Microsoft tuned its version of Java for Windows, inhibiting the potential for application developers to write applications once and have them run on many different operating systems …  Wide use of Microsoft’s version of Java negates the potential that Java might undermine Windows application advantage.”

IBM, which was still competing against Windows with OS/2 at the time, decided to bundle Netscape Navigator with the platform specifically because it included Java, Soyring said. But as a PC maker, IBM also had to bundle Windows on most of its PC because that’s what customers expected. And on the stand, Soyring noted that Microsoft bundled its own Java version with Internet Explorer, which meant that it, too, was forced to ship Microsoft’s polluted version of Java on its PCs.

And then something incredible happened.

While Soyring was testifying against Microsoft, a U.S. District Court judge in California ordered the software giant to stop shipping Windows 98 until it removed its version of Java from the product. The ruling had come as part of Sun’s separate lawsuit against Microsoft. Microsoft hadn’t just created its own Java version, the Judge noted. It had also engineered Windows 98 and Internet Explorer to work more poorly if users installed Sun’s Java.

About a week later, Sun chief scientist James Gosling, the inventor of the Java language, took the stand against Microsoft in its antitrust trial.

“Java is specifically designed to give developers the ability to build software applications that can run on multiple platforms,” he testified. “Java-based programs need not run by interacting with a particular operating system’s APIs. Instead, they typically interact with a Java virtual machine, which is an intermediate software layer that translates the Java-based program for the particular operating system and hardware platform that the Java virtual machine runs on. In essence, the Java-based program views the JVM as an operating system, and the operating system views the JVM as a traditional application.”

What Microsoft had done, Gosling said, was “reduce the cross-platform promise of Java” by creating an incompatible implementation of the technology that was dependent on Windows. By bundling this incompatible JVM with Windows and Internet Explorer, Microsoft likewise limited the distribution of the cross-platform version of Java that Sun had created, and threatened to make its polluted version the “de-facto standard.” That, he said, is why Sun sued Microsoft.

And then something else incredible happened: On November 24, 1998, America Online (AOL) announced that it was acquiring Netscape.

This was potentially devastating to the government’s case, as it provided Microsoft with an example to prove its insistence that its market domination was temporary, and that anything could happen. If Netscape was so vulnerable, it asked, then why had AOL spent $4.2 billion acquiring it? AOL, after all, was one of the biggest distributors of Internet Explorer, and if it stopped using IE in its flagship product, it could singlehandedly change the course of the browser market overnight.

“From a legal standpoint, this proposed deal pulls the rug out from under the government,” Microsoft chief counsel Bill Neukom said from the courtroom’s steps after the day’s testimonies had ended. “It proves indisputably that no company can control the supply of technology. We are part of an industry that is dynamic and ever-changing.”

For the Gosling testimony, government lawyers played a clip of Gates denying he was ever concerned about Java and then being shown an email in which he had written, “Java scares the hell out of me” to Mr. Maritz. But with Gosling, Microsoft was able to deliver a few punches of its own. And it turns out that Gates’ and Microsoft’s paranoia about an industry that had colluded together and turned against it was warranted.

According to Sun’s own internal documents, the workstation maker had created Java in part to “attack the Microsoft franchise” and displace Windows as the standard for application writers. One Gosling email to Sun CEO Scott McNealy was particularly damning, with him stating that Sun would give Microsoft the “illusion” of partnership while conspiring to “beat them.” The email mimicked the style of the infamous Microsoft email about Netscape, in which the software giant had threatened to cut off the smaller company’s “air supply.”

Worse, some of Sun’s documents showed that Sun and Netscape had agreed to not compete in Internet software, the same sort of market divvying of which the government had accused Microsoft of in its own dealings with Netscape. Netscape hadn’t been willing to play ball with Microsoft because it had already divided the market with Sun, Microsoft’s lawyers argued.

But the most damning evidence was a personal afront to Mr. Gosling. How was it, Microsoft’s lawyers asked, that Microsoft had made a better version of Java than Sun and Gosling had? After all, Gosling had invented the language and the JVM runtime environment. Even Judge Jackson seized on this bit of inconvenient truth, asking Gosling whether it was fair to ask whether Microsoft simply couldn’t wait for Sun “to catch up” to what Microsoft had created “in a relatively short time”?

Microsoft’s points were all technically correct. But Sun, unlike the software giant, didn’t wield monopoly power over the industry, and it was free to make whatever deals it wanted. And Microsoft’s improvements to Java came at the cost of cross-platform compatibility, undermining the platform rather than making it better.

By early 1999, Microsoft was calling its own witnesses to the stand and one-by-one, with rare exception, they were embarrassed or found to lack credibility. Jim Allchin, who had early won an internal battle with Brad Silverberg for control of the strategy for Windows, fared particularly poorly on the stand, but he was only one among many Microsoft executives who continually contradicted the email evidence wielded by the government’s lawyers. All these years later, it is still astonishing to observe how each fell into the same trap of having to later admit that they had lied, were mistaken, or were simply wrong.

By the time Bob Muglia reached the stand, Judge Jackson was nearing the end of his patience. Muglia said again and again that Microsoft has changed Java only to help consumers. But when confronted with an email in which Gates had written to him that he was “hardcore about NOT supporting” the latest version of Sun’s Java, Muglia jumped the shark and pushed Jackson over the edge.

“I’m not certain exactly what Bill was referring to when he said supported,” Muglia began. “But let me give you an example of how he could have meant it.”

“Mr. Muglia!” Judge Jackson cried out, shaking his head. “There is no question pending. I read it as saying he does not like the idea of supporting it. Let’s not argue about it!”

“If I could clarify one more thing,” Muglia asked.

“No! NO! STOP!” Jackson yelled. “There is NO question pending!”

Later, Jackson told author Ken Auletta that “a lot of Microsoft’s witnesses were not credible” and that they continually contradicted the facts of the evidence. “The events as perceived by [Netscape CEO James] Barksdale were a lot more credible than events proposed by [Microsoft].”

Whatever the point of Microsoft’s defense tactics, it had failed to convince Jackson to see the world its way. In his Findings of Fact and Conclusions of Law, Judge Jackson found that Microsoft had sabotaged Java among many other offenses. Microsoft’s actions, he said, had caused direct harm to not just Sun and the industry, but to consumers as well. This, Microsoft’s Neukom opined, was a “weak reed” with little evidence to back it up.

It was almost like he hadn’t attended the trial every single day. But he certainly wasn’t the only one at Microsoft still burned that Sun had fought back.

“We are not ‘write once, run anywhere’ kind of guys,” Microsoft’s Steve Ballmer had infamously stated in response to Sun’s lawsuit. “[But] our goal in signing that contract was not to neutralize Java. Sun is just a very dumb company … Those sub-50-IQ people at Sun who believe that we and Sun had this sort of wonderful dovetailing of strategic interests are either uninformed, crazy, or sleeping.”

Microsoft hoped to have to last laugh. While still mired in its antitrust suit, it settled separately the Java suit with Sun in 2001. Microsoft agreed to handicap its Java offerings to meet Sun’s requirements, and it eventually stopped supporting Java directly. But Microsoft had continued plotting to try and undermine Java: It had created a drop-in replacement for the Java platform called .NET, and it had created a drop-in replacement for the Java language called C#. And both were central to Microsoft’s strategy for embracing and extending the Internet over the next decade.