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http://www.zdnet.com/zdnn/content/inwo/0427/310649.html
Caldera CEO says MS
threatening PC makers
By Will Rodger, Inter@ctive Week Online
April 28, 1998 8:22 AM PDT
Microsoft Corp. is threatening to suspend
the contract of at least one of the United
States' largest computer manufacturers in a
dispute over bundling a competing
operating system, Caldera Inc. CEO Bryan
Sparks alleged Monday.
Caldera, together with more than a dozen other
companies, produces a version of Linux, a
low-cost, collaboratively developed version of
the popular Unix operating system. Linux was
the only operating system not owned by
Microsoft that gained market share in 1997.
"Microsoft has gone and threatened to pull their
license -- and I know it happened," Sparks told
Inter@ctive Week. "It's one of the top five."
'Microsoft has
gone and
threatened to
pull their license
-- and I know it
happened.'
-- Caldera CEO Bryan
Sparks
Jamie Love, director of Ralph Nader's
Consumer Project on Technology, said his
group will ask Justice Department officials to
look into the allegations -- perhaps as early as
Wednesday.
"It's completely outrageous," he said. "You hear
consumers are choosing Microsoft one day, and
then you hear (Microsoft) is threatening to pull
licenses if anyone tries to offer anything else."
Caldera's complaint is not the first time a
competitor has accused Microsoft (MSFT) of
hardball marketing tactics. For years, rivals
including Sun Microsystems Inc. (SUNW) and
Netscape Communications Corp. (NSCP) have
complained that Microsoft has used exclusive
contracts, bundling agreements and threats of
retaliation to force companies to take software
programs they didn't want as a condition of
licensing its Windows operating systems.
Until now, however, competitors had stopped
short of saying Microsoft had its sights on Linux
-- a cooperatively developed, low-cost clone of
the Unix operating system -- in addition to other
operating systems common to the servers that
make the Internet run.
MS rejects charges
Microsoft officials dismissed Sparks'
complaints.
"It's a little odd that a CEO would talk about
hearsay," Microsoft Spokesman Jim Cullinan
said. "Here they're issuing a blanket statement
and they're just running roughshod."
Microsoft has previously acknowledged giving
discounts to manufacturers that put more than
one of its products on their computers, but has
steadfastly denied forcing the hand of computer
makers.
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Claims that Linux may be the victim of predatory
tactics take on special meaning in light of the
ongoing federal and state investigation of
Microsoft's business practices.
In addition to making up as much as 5 percent of
the market for microcomputer operating
systems, Linux figures prominently in the plans
of Netscape, arguably the most outspoken of all
Microsoft rivals.
Netscape co-founder Marc Andreessen last
week told a gathering of software developers
that the company wants its suite of Internet
software to be the standard interface for the
fast-growing Linux market.
Sparks refused to say which computer
manufacturer had been threatened by Microsoft.
Nonetheless, he said, fear of Microsoft has
grown so widespread in the computer industry
that marketing personnel at large makers
routinely reject overtures to consider selling any
operating system for fear of damaging their
relations with the company.
Officials at Dell Computer Inc. (DELL), he said,
told him they couldn't accept a proposal from his
company for fear of offending the Washington
state company.
Dell: No restrictions on contract
Dell Spokesman T.R. Reid said Dell's contract
with Microsoft contained no restrictions on any
operating systems used by company. If Dell
wasn't interested in selling computers that run
Linux, lack of demand -- not pressure from
Microsoft -- was the more likely reason for the
decision.
He denied the company had been pressured to
turn down alternative operating systems by
Microsoft
Though some estimates place the current
population of Linux users at 5 million to 10
million, "I haven't been able to find any examples
of customers requesting Linux," Reid said. "If we
felt as if we were turning down business
because we don't default to Linux, we would
rectify that," he said.
Packard Bell NEC spokeswoman Sherri
Benninghoven likewise said Packard Bell had
seen no signs of pressure by Microsoft.
"It hasn't been implied -- we haven't had any
comments that we aren't free to use anything we
want," she said.
Officials at IBM, Compaq Computer Corp. and
Gateway Inc., which round out the top five PC
makers, did not return calls by press time.
Two companies have clashed before
This isn't the first time Caldera has tangled with
Microsoft. Last year, the company filed suit
against its larger rival in a separate action,
alleging that Microsoft had engaged in a number
of anti-competitive practices to kill off Caldera's
DR-DOS operating system.
Among other things, the company charged
Microsoft had inserted into the Windows
program code whose sole function was to make
it impossible to run Windows on top of
DR-DOS.
Since its introduction in the mid 1980s,
Windows has operated only when a
non-graphical operating system such as
MS-DOS was also installed on the computer.
Caldera claims the packaging of Windows with
the underlying MS-DOS operating system
constitutes an unfair "bundling" practice that
makes it impossible to sell DR-DOS to a wide
variety of users.