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Expert Testimony of Ronald Alepin in Comes v. Microsoft - Embrace, Extend, Extinguish - Updated
Monday, January 08 2007 @ 02:04 AM EST

[ Update: I am thrilled to tell you that plaintiffs got permission from the judge to post all the transcripts and the exhibits in this case. Enjoy the riches. [Note: Documents were retrieved from www.iowaconsumercase.com, which was removed on settlement of the litigation.] You might enjoy reading this ComputerWorld report by Eric Lai, on developers being "pawns" by a Microsoft executive in Friday's session.]

I have a treat for you, part of the expert testimony of Ronald Alepin on behalf of plaintiffs on January 5th in Comes v. Microsoft, the antitrust litigation going on right now in Iowa. It's the part where he explains to the jury how he understands the expression "embrace, extend, extinguish", using Microsoft's own words in emails and such. The day before, evidently Microsoft's lawyers claimed, before the jury, that Mr. Alepin made the phrase up, so his testimony picks up at that point, first thing the next day.

I thought you'd enjoy to see what expert testimony is like. Perhaps, like me, you will find yourself thinking about standards, how important they are, and about ODF, in particular, and about Microsoft's Open XML and the threat of proprietary extensions. Or, if you are in Europe, you may instead find yourself thinking of the EU Commission's struggle to get Microsoft to release API information to competitiors. For sure, you'll understand why APIs matter so much.

You'll hear some emails read aloud, one of Bill Gates's, an email from 1996 about Java, where he says he was losing sleep over how great Java was, and you'll see a strategy he suggested -- "fully supporting Java and extending it in a Windows/Microsoft way".

Alepin is asked what that phrase means:

Q. Okay. And now, again, for the Jury, what does embrace mean in this context as used by Microsoft employees?

A. It's used to indicate a strategy where Microsoft will embrace the standards or the specifications and interfaces of another company's software.

Q. Okay. And what does extend refer to?

A. Once the specifications have been embraced, then Microsoft will extend them and add additional interfaces proprietary to Microsoft.

Q. Okay. When you say add additional proprietary interfaces that are Microsoft's, what impact does that have technologically to other ISVs and OEMs?

A. Well, the result is or the impact is that what was once sort of community development property, the work of the industry and industry participants is appropriated essentially, is taken over by Microsoft.

And then Microsoft takes it and with its proprietary extensions, makes it essentially unavailable on a going-forward basis to the industry participants who were responsible for first developing the specifications and the standards.

Q. Okay. And when Microsoft makes those APIs unavailable to certain ISVs and OEMs, what's the impact to those ISVs and OEMs of their ability technologically to create products?

A. It reduces their ability to create products, especially products that will interoperate with Microsoft's products.

The Microsoft way of extending, according to the testimony, ends up costing customers more. The idea of Java was to write once, use anywhere, cross platform, and Alepin is asked to explain what that means to developers and end users, why it results in lower costs:

Q: What is the impact of cross-platform in relation to ISVs and OEMs as compared to single platform?

A: Well, there is a significant reduction in the cost of development of software. And this shows itself in several ways, but the first of which is that if you have a platform, a cross-platform application, you develop it once and you can run it anywhere. That was the tag line, if you will, of Sun's Java, is write once, run everywhere. The second reduction in cost for an independent software vendor is that the developers only have to learn one platform, one set of interfaces, one way in which to program in order to be able to write programs that run on a variety of platforms. So if you think of, let's say, a vendor like -- independent software vendor like Intuit, if it wanted to make an application that ran on Windows and ran on the Mac, it might have to have two teams of developers, each of which were knowledgeable in the interfaces and the design requirements for applications that run on the Mac and run on Windows, or if it was using cross-platform development tool kit and environment, it would only need to do that once.

Q: And what is the impact of cross-platform versus single platform on the common user, the end user, in relation to their ability to download these applets and utilize them?

A: Well, when applets are cross-platform, it expands the number of applications that are available to you so you can go to a website. And if you have a Linux computer or a Macintosh computer or a Windows 3.1 computer, you can get an application and it will run. You don't have to either select a specific application or hope that the independent software vendor or the website created the application for your platform. So it would increase the number of applications available to you.

When elephants fight, it's mice who suffer, and the grass under the elephants' feet, the fighting field. That's the point the plaintiffs are trying to make, that the tactics Microsoft employed made it worse for customers because inevitably there were problems from lack of interoperability and decreased functionality, and all of that ended up costing everyone more, everyone except for Microsoft.

Keep in mind that for anything official, you need to get a certified copy of the transcript from the court. This is just so we can follow along and know what is being said in that Iowa District Court in Polk County, Iowa. I know, like me, you wish you could be there.

I've cut out from the transcript the parts where the lawyers argue with each other before the judge, the parts the jury didn't hear, because the trial is not yet over, and I don't want to take a chance of them reading or hearing about anything they didn't already hear or aren't supposed to hear. That's the judge's job, to decide what they should and shouldn't hear, and I always respect decisions by the judge.

I know. Aw. And for sure some very interesting exchanges took place, some fine lawyering. When it's all over, we can enjoy it all.

I removed the line numbers from the transcript, because otherwise it's hard for those who rely on readers to follow along, but I have retained the pagination.

You'll also see the lawyer asking someone named Darin to show different things in a digital presentation. He could be the paralegal. We do such tasks at trial sometimes (yes, total fun), or he could be a techie guy on staff, making sure the jury can view the emails as the lawyer reads them.

With that, here's the transcript of this part of Mr. Alepin's testimony. Enjoy.

************************

IN THE IOWA DISTRICT COURT FOR POLK COUNTY
-----------------------------------------------
JOE COMES; RILEY PAINT,
INC., an Iowa Corporation;
SKEFFINGTON'S FORMAL
WEAR OF IOWA, INC., an
Iowa Corporation; and
PATRICIA ANNE LARSEN;

Plaintiffs,

vs.

MICROSOFT CORPORATION,
a Washington Corporation,

Defendant.

_________________________

NO. CL82311

TRANSCRIPT OF PROCEEDINGS
VOLUME XXV

_________________________

The above-entitled matter came on for trial before the Honorable Scott D. Rosenberg and a jury commencing at 8:30 a.m., January 5, 2007, in Room 302 of the Polk County Courthouse, Des Moines, Iowa.

HUNEY-VAUGHN COURT REPORTERS, LTD.
[address, phone]

A P P E A R A N C E S

Plaintiffs by:

ROXANNE BARTON CONLIN
Attorney at Law
Roxanne Conlin & Associates, PC
[address, phone]

RICHARD M. HAGSTROM
MICHAEL E. JACOBS
Attorneys at Law
Zelle, Hofmann, Voelbel,
Mason & Gette, LLP
[address, phones]

STEVEN A. LAMB
Attorney at Law
Zelle, Hofmann, Voelbel,
Mason & Gette, LLP
[address, phone]

KENT WILLIAMS
Attorney at Law
Williams Law Firm
[address, phone]

Defendant by:

DAVID B. TULCHIN
STEVEN L. HOLLEY
SHARON L. NELLES
Attorneys at Law
Sullivan & Cromwell, LLP
[address, phone]

ROBERT A. ROSENFELD
KIT A. PIERSON
Attorneys at Law
Heller Ehrman, LLP
[address, phone]

BRENT B. GREEN
Attorney at Law
Duncan, Green, Brown &
Langeness, PC
[address, phone]

STEVEN J. AESCHBACHER
Attorney at Law
Microsoft Corporation
[address]

(The following record was made in the presence of the jury at 8:47 a.m.)

THE COURT: Mr. Alepin. Sir, you are still under oath.

THE WITNESS: Thank you.

RONALD ALEPIN, called as a witness, having been previously duly sworn, testified as follows:

MR. LAMB: Would you put up slide 7, Darin?

6623

DIRECT EXAMINATION (CONT'D)

BY MR. LAMB:
Q. Okay. Good morning, Mr. Alepin.

A. Good morning.

Q. When we broke yesterday, you were in the middle of a discussion regarding an exhibit, Exhibit 5735.
MR. LAMB: Can you pull that up, Darin? Highlight the -- yeah, thank you.
Q. And you were explaining this phrase, clone their client technology early and often (full embrace strategy). Do you recall that, sir?

A. I do, yes.

Q. Okay. And at that point in time, you were challenged that you had just made that phrase up, embrace, extend, and extinguish. Do you recall that?

A. Yes, I do.

MR. LAMB: Okay. I'd like to call up Exhibit 2403, please. Can you go on 2403 to the heading?

Q. Can you tell the Jury who those people are?

A. There are John Ludwig, Brad

6624

Silverberg, Ben Slivka, Thomas Reardon, Darrell Reuben, Paul Maritz, Chris Jones. I forget who Victor S. is, but that's the names of executives within the Microsoft organization including the head of Windows desktop operating system, Brad Silverberg and his superior Paul Maritz.

Q. Okay. And what's the subject of this particular memo, sir?

A. The subject is a response to anti-Java strategy memo.

Q. Okay.

A. Or reply.

Q. And this is dated September 4th, 1995; right?

A. Yes.

MR. LAMB: Can you highlight the first sentence, Darin, some additional thoughts?

Q. Okay. Can you read that for us?

A. Some additional thoughts. These are all based on my conclusion that Java is already here, and we need to move down the embrace/extend path.

Q. Okay. And now, again, for the Jury, what does embrace mean in this context as used

6625

by Microsoft employees?

A. It's used to indicate a strategy where Microsoft will embrace the standards or the specifications and interfaces of another company's software.

Q. Okay. And what does extend refer to?

A. Once the specifications have been embraced, then Microsoft will extend them and add additional interfaces proprietary to Microsoft.

Q. Okay. When you say add additional proprietary interfaces that are Microsoft's, what impact does that have technologically to other ISVs and OEMs?

A. Well, the result is or the impact is that what was once sort of community development property, the work of the industry and industry participants is appropriated essentially, is taken over by Microsoft.

And then Microsoft takes it and with its proprietary extensions, makes it essentially unavailable on a going-forward basis to the industry participants who were responsible for first developing the specifications and the standards.

6626

Q. Okay. And when Microsoft makes those APIs unavailable to certain ISVs and OEMs, what's the impact to those ISVs and OEMs of their ability technologically to create products?

A. It reduces their ability to create products, especially products that will interoperate with Microsoft's products.

Q. Okay. Thank you, sir.

MR. LAMB: Darin, could you go right above paragraph 2 and highlight that for us? Okay. Do you see the section there, sir, where it says there are a bunch of options, but the answer really revolves around our company strategy. Given that we don't think Java is going to be around or that we don't want to encourage it, we should figure out a way to have our browser sniff the applet tag in HTML (Java object) then prompt the user to fetch the runtime from Sun. Do you see that, sir?

A. I do.

Q. Can you tell that jury, what does that mean? When it references our browser, what is that referring to?

6627

A. Our browser is the Microsoft Internet Explorer.

Q. Okay. And when it says sniff the applet tag in HTML, tell the Jury what that means.

A. Well, what that means is to identify a particular markup language identifier that would indicate that this is a Java applet.

Q. Okay. And then where it says then prompt the user to fetch the runtime from Sun, what does that mean?

A. That means that the user would be asked if he wanted to go and get the Java runtime software, the Java Virtual Machine from Sun and install it on the user's computer.

MR. LAMB: Okay. Go down to the bottom paragraph, Darin. Very bottom paragraph.

And then if you can highlight the second page and add paragraph 3 underneath that.

Can't do that on the same screen? Okay.

All right, it can be done. We have the technology.

6628

Q. All right. Do you see there where it says one strategy is to jump on the Java bandwagon and try to take control of the class libraries and runtime? What are class libraries?

A. Well, I mentioned before in yesterday's conversation that there were these subroutines. Sometimes they were referred to as DLLs. I think I used the term distributed link libraries.

Another manifestation of the same idea, another way of approaching the same idea of taking subroutines and making them available is something called the runtime and class libraries. They are the equivalent, if you will, of subroutines in the Java world.

Q. Okay. Is that something you could diagram for the Jury so they can see what a Java Virtual Machine does?

A. Sure, I can do that. MR. LAMB: Permission of the Court?

THE COURT: You may.

MR. LAMB: Does this matter whether it's on white board? I don't know what the Court's preference.

6629

THE COURT: Why don't you use the easel. Can you use the easel, please?

THE WITNESS: I'll try. I have a tendency to slide down the easels.

THE COURT: Slide?

THE WITNESS: Slide. My handwriting goes, you know, like this.

MR. LAMB: There's some markers in the back there.

THE WITNESS: Thank you.

A. All right. So before we talked about an operating system and we had applications in it and we might have had middleware in here, and these would be tied to a particular platform.

So this would be -- for example, this application would be linked to -- and I believe I used the term locked into the Windows platform.

In 1993 and 1994, the folks at Sun Microsystem came up with this idea of putting between the operating system and the applications a virtual machine. So these.

In Sun's Java world, these applications were known as applets. And the

6630

idea was that you would download them from the Internet and you would make them so they could run on your machine.

But they would run inside something called a virtual machine that would insulate the application from any dependencies on the operating system.

So essentially you could take --

Q. Hold on a second there. When you say insulate the applications from the operating system, technologically, what's the impact of that?

A. That meant that the applications were portable and that the same application could be downloaded from a website and run on a Macintosh computer or on a Windows computer or on a Linux computer without any change.

Q. So the operating system didn't matter?

A. The operating system didn't matter, that's correct.

Q. Go ahead, sir.

A. So the Java Virtual Machine was responsible for maintaining all of the local information, information about the operating system that their JVM -- that's a shorthand

6631

word for Java Virtual Machine -- that the JVM was responsible for managing all of the local interfaces to the operating system, but the application used only the interfaces available from the Java Virtual Machine.

Those same interfaces were available on every system that Java Virtual Machine would run on. And there were, I believe, more than 30 different computer platforms that the Java Virtual Machine software could run on.

And that meant that you could download an application from a website, Java application, and could run on 34 different computers without you having to recode the application or -- a term that I used yesterday -- without you having to port the application by changing the APIs and making other changes.

Q. Okay. You can go ahead and take your seat again, sir. It goes in the back.

Sir, referring again to the exhibit, Exhibit 2403, paragraph 3 there, it says, we should consider support for Java as a platform. As a company, we have two options for embracing and extending Java.

6632

Do you see that phrase, again, embracing and extending; right?

A. I do.

Q. And does it mean the same thing that it meant earlier, in your mind?

A. Yes.

Q. Okay.

MR. HOLLEY: Your Honor, objection. On November 9th of 2006, the Court issued a ruling on motions in limine where the Court said no witness --

MR. LAMB: Your Honor, this is a speaking objection.

MR. HOLLEY: Your Honor, I just need to state the basis of my objection.

THE COURT: Let's take it outside the presence of the jury ....

[PJ: discussion with lawyers and judge out of earshot of jury ensued, redacted.]

(The following record was made in the presence of the jury at 9:08 a.m.)

THE COURT: Please rephrase the question.

BY MR. LAMB:
Q. Again, Mr. Alepin, that phrase embracing and extending Java in paragraph 3 of this exhibit, what did that mean to you?

A. That meant that Microsoft would adopt Java. That is to say, adopt the interfaces. And then it would add extensions proprietary to Microsoft.

Q. Okay. And what is the impact on other developers of the addition of those extensions? Would you explain that to the Jury?

A. Well, the use of those proprietary extensions, those proprietary Microsoft extensions to the Java Virtual Machine APIs would lock the application or the applet to the

6640

Windows computer. Meaning that those applets would only run on or with a Windows computer.

Q. Okay. With the Court's permission, could you get down and show on the diagram that you have what the impact of the addition of those applications would have?

A. Excuse me, the addition of those applications programming interfaces?

Q. Yes, APIs.

THE COURT: Speak loudly, please.

THE WITNESS: I'm sorry.

A. Okay. So here is our Java Virtual Machine. Here are the interfaces between the applet or the application and the Java Virtual Machine interfaces including -- just, for example, allocate memory for me, get input from the keyboard, those kinds of operations.

And what Microsoft extensions would do would be to add additional interfaces. Would add some additional interfaces not available on the other virtual machines that were on other platforms.

When the application developer used those APIs, that meant that the applet would only run on the Windows platform. Those kinds

6641

of functions would be unique to Windows and would lock the applet into the Windows platform.

Q. Okay. Thank you, sir. This e-mail, Exhibit 2403, then goes on to say that there's a couple options. One, we take control of it and add Windows specific classes. Do you see that, sir?

A. Yes.

Q. And explain to the Jury what that would entail, that option.

A. That's the description of what I was just saying.

Q. Okay.

A. So adding the Windows specific classes -- classes are subroutines or the equivalent of subroutines. They're application programming interfaces, which would be specific to the Windows platform.

Q. Okay. And then the second object is we, quote, sandbox, end quote, it, slow it down, and restrict it to a particular domain, betting that we can bring our technology to bear quickly enough to minimize the impact.

6642

Technologically, what does that mean sandbox it, slow it down, restrict it to a particular domain?

A. It means, as a technical matter, relegating Java's applicability to a specific type of environment or purpose so that it would, for example, be not a general purpose solution for the development of applications.

Q. Okay. And then it goes on to say while I would like to pick two, my personal feeling is that we should strongly consider one; namely, fully supporting Java and extending it in a Windows/Microsoft way. Do you see that?

A. I do.

Q. And, again, extending it in a Windows/Microsoft way, does that have the same meaning, in your mind, as it did the way you've testified earlier?

A. It does.

Q. Okay. And is that something that you've seen in a number of Microsoft documents used by a number of Microsoft employees?

A. Yes.

MR. LAMB: Would you pull up Exhibit

6643

5803, please? Okay. If you could go to the from/to line.

Q. Who's this from?

A. This is from Bill Gates.

Q. And who's Bill Gates, sir?

A. He's the CEO, founder of Microsoft.

Q. And who is it to?

A. I think was the CEO and still is the founder of Microsoft.

Q. Okay. Who is this e-mail to?

A. It's to Nathan Myhrvold.

Q. Okay. And, again, this is dated September 30th, 1996.

The subject, what is the subject, sir?

A. The subject is Java runtime becomes the operating system.

Q. Who is Mr. Mhryvold?

A. Nathan Mhryvold was one of the most senior executives at Microsoft.

Q. Okay. Why don't we go to the very first paragraph. And this is Mr. Gates saying I am worry a lot about how great Java/Javabeans and all the runtime work they are doing is and how much excitement this is generating. I am

6644

literally losing sleep over this issue since together with a move to more server based applications, it seems like it could make it easy for people to do competitive operating systems. Do you see that, sir?

A. I do.

Q. Okay. What does the phrase more server based applications mean?

A. Well, one of the great potentials for the Internet is that you can create applications that run on a server computer, like a web server or run partially on a web server and partially on your desktop so that there is a cooperative application that can provide some of the nice responsiveness of a local based application with some of the larger capacity features of servers.

Q. And is this one of the many e-mails that you reviewed in order to help form your opinions here?

A. One of the many.

Q. Okay. Now, as you read this in order to form your opinions, do you see where it says I am worry a lot?

6645

A. I do, yes.

Q. Okay. And does that tell you that Mr. Gates is conveying, at least as you review it, a concern?

A. Well, this is a concern that was widespread among Microsoft employees.

Q. Okay. And can you tell the Jury, in your opinion, what you view Mr. Gates is conveying the concern to be?

A. Well, the concern that Microsoft documents, Microsoft employees discusses the potential that Java had as a technology or as a platform, in particular, to become an operating system and to make it possible to replace the current operating system, the current Windows operating system.

Q. It technologically threatened the Windows operating system platform?

A. That's correct, yes.

Q. Okay.

MR. LAMB: Darin, if you could go down about midway in this document where it says I think that the risk of Sun.

Q. Sir, that says, I think, that the risk of Sun really taking the OS franchise away from

6646

us is much lower than the risk that they cheapen the entire business. They are so hell bent to give things away, and there is so much cross-platform fervor, that it will be hard for them or others to harness this energy toward a single platform.

In the limit, they can make the web totally OS agnostic, but there will still be other things that motivate one platform versus another.

And, again, what is Sun?

A. Sun is Sun Microsystems. They started off as a workstation and had a server company. They had an operating system that -- and still do -- that was based on Unix. Unix was one of the operating systems I put up on the quadrant yesterday.

Q. Okay. Mr. Alepin, the term the OS franchise, what does that mean?

A. The OS franchise is the Windows -- well, the OS franchise is the operating system platform.

Q. You understand Mr. Gates to be referring to Windows?

6647

A. The Windows, of course, yes.

Q. Okay. And, again, Sun created Java; right?

A. Uh-huh. Yes.

Q. Okay. Now there's another phrase -- and I believe you said what it meant yesterday, but if you could go over it again, I would appreciate it -- cross-platform. Do you see where it says there is so much cross-platform fervor?

A. I do.

Q. What does cross-platform mean?

A. Cross-platform is -- refers to the ability of applications to run on different platforms without any effort. This was something that emerged as a result of looking at the potential for the Internet and looking at applications like Netscape's browser and Sun's Java. It created the potential for users to -- an independent software vendors to start thinking in terms of one application across all of the hardware and software platforms out there.

Q. And, Mr. Alepin, technologically

6648

speaking, cross-platform versus single platform is more beneficial for ISVs and OEMs; correct?

MR. HOLLEY: Objection, Your Honor. Leading.

THE COURT: Sustained.

Q. What is the impact of cross-platform in relation to ISVs and OEMs as compared to single platform?

A. Well, there is a significant reduction in the cost of development of software. And this shows itself in several ways, but the first of which is that if you have a platform, a cross-platform application, you develop it once and you can run it anywhere.

That was the tag line, if you will, of Sun's Java, is write once, run everywhere.

The second reduction in cost for an independent software vendor is that the developers only have to learn one platform, one set of interfaces, one way in which to program in order to be able to write programs that run on a variety of platforms.

So if you think of, let's say, a vendor like -- independent software vendor like Intuit, if it wanted to make an application

6649

that ran on Windows and ran on the Mac, it might have to have two teams of developers, each of which were knowledgeable in the interfaces and the design requirements for applications that run on the Mac and run on Windows, or if it was using cross-platform development tool kit and environment, it would only need to do that once.

Q. And what is the impact of cross-platform versus single platform on the common user, the end user, in relation to their ability to download these applets and utilize them?

A. Well, when applets are cross-platform, it expands the number of applications that are available to you so you can go to a website.

And if you have a Linux computer or a Macintosh computer or a Windows 3.1 computer, you can get an application and it will run.

You don't have to either select a specific application or hope that the independent software vendor or the website created the application for your platform. So it would increase the number of applications available to you.

6650

MR. LAMB: Darin, if you could go down to the last two paragraphs and highlight those. No, the one below that.

Q. Mr. Alepin, Mr. Gates goes on to say, this is not to say that Java is unimportant. It is very, all caps, important, paren, just don't lose sleep, exclamation point, close parens.

I think that you are focusing on the wrong, quote, kind, end quote, of threat. We are in danger of losing a new market, which will grow at a pace which is very rapid indeed.

This would be a tragedy to have happen to us, but it is different than a direct assault on our core asset. And our response must also be different. The obvious things to do are, colon.

Now, when Mr. Gates refers to the core asset, what piece of technology, in your mind, is he referring to?

A. Well, the core asset is the operating system. It's the Windows -- at this time it's the Windows operating system.

Q. Okay.

MR. LAMB: Darin, could you go to the

6651

second page under the top paragraph 1? It goes down a couple lines.

Q. Do you see there where it says, one, provide our own means of dramatically improving web pages. Continue to, quote, embrace and extend, end quote, both at the level of new Java tools, like J plus plus, and our broader browser strategy. Do you see that, sir?

A. Yes.

Q. Okay. And based on your experience in the industry and based on your review of all the documents, what is your understanding of the meaning to you of the phrase, quote, embrace and extend, end quote, as Mr. Gates uses it here?

A. It's to copy and adopt the interfaces from others and to extend them in proprietary and unique ways.

MR. LAMB: Could I have Exhibit 5906? Can we do the to/from line.

Q. This is from Aaron Contorer. Do you see that?

A. Yes, I do.

Q. Do you know who that was or is?

6652

A. I believe he was in the developer tools organization.

Q. Okay. You need to speak up, sir. I apologize. I'm really loud. You're really quiet. Okay.

A. Yes.

Q. We're getting there.

A. All right.

Q. Okay. And it's to who?

A. It's to Bill Gates.

Q. Okay. Now, again, if we could go to the first paragraph where it says, the first two paragraphs that starts with today.

It says, today we face the largest threat Microsoft has faced since the success of Windows. For the first time there is a really credible threat to our position as the leading platform for ISVs to write to. Windows faces challenges in satisfying end users and IT organizations, but we have a lot of smart work underway to address these problems.

By contrast, we are not executing on a strategy that lets us maintain our leadership

6653

position as the people who define the platform for ISVs.

Owning this platform is the Microsoft asset. It is the difference between growing to twice our current size in the future, or shrinking to much less than the role we enjoy today. Do you see that, sir?

A. I do.

Q. Okay. And when Mr. Contorer refers to owning this platform is the Microsoft asset, when he refers to the Microsoft asset and the platform, what is your understanding of that terminology?

A. Well, it's the -- as I referred to yesterday, the platform that we speak of is the set of programming interfaces that in this particular case here would be Windows.

Q. Okay.

MR. LAMB: If you could go to the next two paragraphs, Darin.

Q. This memo goes on to Mr. Gates to say, there are three possible ways to address the threat of the Java platform.

One is to do nothing and gradually die

6654

as others innovate around us.

The second is to join the parade of people who are saying, quote, let's kill Microsoft and share their market among us, end quote. Good for everyone else, but reducing us to the much smaller role of a common software company like Lotus or Borland, or even Symantec.

That's a great way to make all our stock options worth zero, even if we would not technically be out of business.

The third choice is to make major innovations to our platform so people still prefer to write to us instead of some tepid cross-platform Java layer. This is our only real option.

Okay. Again, the platform, what's the reference to, as you understand it?

A. The Windows platform.

Q. Okay. And of those three options, based on your review of all the evidence, what option do you believe Microsoft took?

A. It took the embrace and extend option.

Q. Okay. It goes on to say, for over half a year, I have been upset that some people

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at Microsoft are apparently working hard on plan two to destroy the value of the Windows API. Do you see that?

A. Yes.

Q. Okay. What does that mean, the value of the Windows API from a technology point of view?

A. Well, the ability to own and to extend the application programming interface and keep the applications that independent software vendors have developed locked into the Windows platform is the thing of considerable value.

MR. LAMB: If you could go to the next page, Darin. And if you could highlight the last two lines of the first paragraph under switching costs to the end of the paragraph that starts extend. Right there. All right. Thank you, sir.

Q. Okay. Do you see there, it says there is a name for this, colon, it is called, in caps, embrace, and, again in caps, extend. Do you see that, sir?

A. I do.

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Q. Okay. And when you read that based on all your training and experience in the industry and based on all the documents that you've reviewed, what do you understand the phrase embrace and extend to mean?

A. It means to adopt the interfaces and standards and other specifications of another platform or software product. And extend means to add interfaces or specifications to that platform and have those extensions be unique and proprietary to the Windows platform.

Q. Okay. And the next paragraph says, embrace means we are compatible with what's out there so you can switch to our platform without a lot of obstacles and rework. You can switch from someone else's Java compiler to ours; from someone else's web server to ours, et cetera. Customers love when we do this (as long as we don't spend our energy embracing extra standards no one really cares about). Our competitors are not so sure they like it because they prefer us to screw up. In there, what does that mean

6657

embracing extra standards no one really cares about?

A. Well, some standards can run into the thousands of pages and deal with exotic environments and exotic conditions, and there's a -- one needs to be careful that one doesn't spend a lot of time doing a lot of work for special circumstances that are unlikely to arise in the normal course of running some software.

So you don't want to copy everything. The idea is to copy the most specifications that represent the most cases.

Q. And then the next paragraph says, extend means we provide tremendous value that nobody else does.

So, A, you really want to switch to our software, and B, once you try our software, you would never want to go back to some inferior junk from our competitors. Customers usually like when we do this, since, by definition, it's only an extension if it adds value. Competitors hate when we do this because, by adding new value, we make our

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products much harder to clone. This is the difference between innovation and just being a commodity like dot com where suppliers compete on price alone. Nobody builds or sustains a business as successful as Microsoft by producing trivial products that are easy to clone. That would be a strategy for failure. Do you see that, sir?

A. I do. But I think it's like corn.

Q. Like what?

A. Like corn.

Q. Oh, like corn?

A. A commodity like corn.

Q. You're right. We're in Iowa. I should see that. I apologize. Okay.

A. I'm sorry.

Q. No. That's all right. From a technological point of view, what is it you understand he is saying?

A. He's saying that extend means that you add additional functionality that would draw developers to the platform, the extended platform.

Q. But that additional functionality, how

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does that adversely impact other ISVs, OEMs, and other end users?

A. Well, it makes it harder for them, especially if the interface information isn't disclosed or it is very closely tied to other Microsoft proprietary technology.

It makes it very difficult for the rest of the independent software community to take those extensions and make them available to users on other platforms.

Q. And is it necessary, in your opinion, technologically for Microsoft to add this innovation and not disclose the APIs?

MR. HOLLEY: Objection, Your Honor.

THE COURT: Overruled. You may answer.

A. No.

Q. Why not?

A. It's not necessary to -- not to disclose interfaces. There's not -- there's not a technical reason for not disclosing interfaces.

Q. Okay. Thank you, sir. Now, in developing your opinions here yesterday and today, you've reviewed a lot of

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documents; right?

A. I have, yes.

Q. And you've reviewed depositions; right?

A. Yes.

Q. And you've reviewed trial testimony; correct?

A. Yes.

Q. And you've relied on them; correct?

A. Yes.

Q. Okay. And, in part, in relation to your opinions here yesterday and today, you reviewed the testimony of a Steven McGeady, an Intel executive; correct?

A. Yes, I did.

Q. McGeady, I'm sorry. M-c-G-e-a-d-y. I'm sorry. I apologize.

A. Yes.

Q. I'd like to read some of that testimony. It's March 31st, 2004. And it starts:

Question: Let me ask you about the November 7th, 1995, Oregon meeting. First, is there any reason that that meeting, in particular, stands out in your

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head, in your mind or your head?

Answer: Well, at that particular meeting --

MR. HOLLEY: Your Honor, I'm sorry to interrupt Mr. Lamb, but this is a subject that I think we need to address at the sidebar for the reasons that I explained earlier.

THE COURT: Very well....

[PJ: Discussion ensued between the lawyers and the judge, redacted, outside of the jurors' hearing.]

THE COURT: You may continue.

MR. LAMB: Thank you, Your Honor. Before I read the testimony, I want to just get a couple things straight in terms of people. Stephen McGeady, who was he?

A. He was an employee of Intel Corporation.

Q. Okay. And Paul Maritz, who is he?

A. Paul Maritz was the head of Microsoft's -- I believe the head of Microsoft's development organizations.

Q. And, again, you've got to speak up a little bit because you make me sound like I'm yelling.

A. I put the microphone out of harm's way

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during the sidebar.

Q. Okay. Thank you. Now, this is from the transcript.

Question: Let me ask you about the November 7th, Oregon meeting. First, is there any reason that that meeting in particular stands out in your head, in your mind or your head?

Answer: Well, at that particular meeting where Paul Maritz was in attendance, we had a very frank discussion about the Internet, about Microsoft's strategy and their strategy in particular toward Netscape and some other competition.

And Paul and some of the other attendees made some colorful statements that stick out in my memory.

Question: What did Mr. Maritz say that stands out in your memory?

Answer: Well, it was a long meeting. There were two phrases that are easy to remember.

One was that it was Microsoft's plan to cut off Netscape's air supply. Keep them by by giving away free browsers, Microsoft was

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going to keep Netscape from getting off the ground.

And the other phrase, quote, cut off air supply, end quote, is one perhaps that really sticks out clearly in my memory.

And the other phrase that sticks out clearly in my memory was the rather -- well, I won't characterize it, but the description of Microsoft strategy as, quote, embrace, extend, extinguish, end quote.

It was kind of a plan their public strategy of love and embrace and extend, the notion that they would embrace Internet standards, extend them presumably in compatible ways that others wouldn't follow and thereby extinguish the competition.

And, again, Mr. Alepin, is that testimony in part what you relied on yesterday when you made the comment about embrace, extend, and extinguish?

A. Yes.

MR. LAMB: Your Honor, I think it's probably break time. Am I right or wrong?

THE COURT: Well, I'll agree with you.

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....

MR. LAMB: The next slide, Darin. Okay.

Q. Before I do this, though, sir, in relation to Microsoft's employment of Java and use of Java, when you testified about Microsoft's Java interface extensions --

A. Yes.

Q. -- do those interface extensions tie the applets or applications to the Windows operating system?

A. They tie them. Another phrase is they bind the applications or they lock them into the Windows platform. That's correct.

Q. Okay. Thank you, sir.

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Expert Testimony of Ronald Alepin in Comes v. Microsoft - Embrace, Extend, Extinguish - Updated | 264 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections Here
Authored by: entre on Monday, January 08 2007 @ 06:25 AM EST
If Needed

[ Reply to This | # ]

Why not a whole section on hijacked Technologies
Authored by: entre on Monday, January 08 2007 @ 06:33 AM EST
Java is the most visible technology that anyone can follow the course through
but there have been many EEE'ed. Someone could write a book on that subject. PJ?

[ Reply to This | # ]

STEVEN A. LAMB Attorney at Law. Zelle, Hofmann, Voelbel, .............MASON............. & Gette
Authored by: SirHumphrey on Monday, January 08 2007 @ 07:24 AM EST
Judging by the razor sharp testimony just discussed, would that be PERRY Mason?

[ Reply to This | # ]

Off Topic here:
Authored by: SirHumphrey on Monday, January 08 2007 @ 07:26 AM EST
Be nice people :)

[ Reply to This | # ]

I Just Hope the Jury can Follow it All
Authored by: Anonymous on Monday, January 08 2007 @ 08:28 AM EST
This is excellent stuff, I love it, and I am sure that anyone interested enough to read Grocklaw will grasp it all.

But sorry, is this really in front of a jury randomly selected from the public? (I am not familiar with US legal arrangements). If so, are they managing to follow this stuff? Do they nderstand "Middleware", "API's" "platforms", "servers", "application developers" - I know Mr Lamb is getting the witness to define these terms, but won't it all be too much for a lay jury? It's like those of those books that claims it will make you a web developer in 15 minutes. I fear it will be far too technical, and I don't know what the answer is.

In the UK there have serious suggestions that technical cases should be tried by a panel of experts rather than a jury. I mean technical in the broad sense - several high profile fraud cases in the UK have clearly had the wrong verdict from the jury because of their lack of understanding of the financial technicalities.

If Joe & Jane Sixpack (or Joe & Jane Senator, Joe & Jane Journalist, Joe and Jane Trading Standards Officer or Joe & Jane Anybody-of-Influence) understood these issues and technicalities we would not even have come to a trial like this. Microsoft's practices would have be stopped in their tracks long ago.

[ Reply to This | # ]

SCO to "release numbers" on Jan 17
Authored by: crs17 on Monday, January 08 2007 @ 09:23 AM EST

In that quarterly ritual that all publicly owned companies go through, SCO will release its fourth quarter financial results on Jan 17.

Here is the press release.

[ Reply to This | # ]

Question: What type of law would prevent gov funded bodies from only supporting extended APIs?
Authored by: veatnik on Monday, January 08 2007 @ 10:37 AM EST
Question: What type of law would prevent gov funded bodies from only supporting
extended APIs?

Is it likely that there is either national or state laws that could be used to
object to a publcally funded institution forcing the public to use extended APIs
to communicate with said institution. (Especially in the case where use of the
API supports a convicted monopolist).

I am thinking specifically of Publically funded Universities and any other
(computer based) interaction citizens must/can do with government entities and
publically funded entities.

For instance
Would we expect to find laws in place to support a suit asking that a State
University web site would work with all browsers? (or would new legislation be
required to support this?)

In case you are wondering, Yes my wife and kids are at a public school and I
have had to buy and install Windows for them to do their work. This seems
actionable (or at least I wish it were.) I am looking for a way to change it
legally. Your suggestions are very welcome.

If there is an approach to accomplish this then it would be nice to create a
Groklaw resource page to document it.

[ Reply to This | # ]

"Making it up"
Authored by: Anonymous on Monday, January 08 2007 @ 11:44 AM EST
This is from the January 4 transcript, which is available at http://www.iowaconsumercase.com, and shows the exchange with MS's lawyer, Steve Holley, that led to Alepin's elaboration of E3:

Q. Okay. Now, the next concept was extend. It was embrace, extend. What do you mean by that, extend, sir?

A. After the standards have been embraced and adopted, the next step in Microsoft's strategy --

MR. HOLLEY: Your Honor, I object. This is pure speculation. The document says nothing about embrace, extend, extinguish, and he is just making this up.
THE COURT: Sustained.

Q. Mr. Alepin, have you heard the phrase embrace, extend, extinguish before?

A. Several times, yes.

Q. In what context, sir?

A. With reference to Microsoft's strategies.

Q. And was this expression used by people from Microsoft?

MR. HOLLEY: Your Honor, I object. If Mr. Alepin is testifying about anything that he has read in any judicial decision or any judicial proceeding involving Microsoft, he is not entitled to testify about that.
THE COURT: You may ask him where he got this from.
MR. LAMB: I believe that's what I just -- I'll try and ask it again --
THE COURT: Overruled. Ask him where he got it.

Q. Where did you get this information from?

A. It's public in our industry. It's a well-known phrase in our business.

[ Reply to This | # ]

Expert Testimony of Ronald Alepin in Comes v. Microsoft - Embrace, Extend, Extinguish
Authored by: Anonymous on Monday, January 08 2007 @ 11:47 AM EST
A company flooding a market in which they hold a monopoly position with free or
below-cost product is anti-competitive and illegal, at least as far as I
understand the law.

Is e/e/e prohibited by law as well?

If not, why is it important in this trial?

[ Reply to This | # ]

Extend
Authored by: Anonymous on Monday, January 08 2007 @ 12:25 PM EST
At the risk of being politically incorrect, the keystone to the E3 argument sees
to be that everyone beings to USE Microsoft's extensions.

I find the argument here to be a bit condescending to developers. If a developer
(I'm one for personal projects relating to the stock market) is interested in
having a multi-platform solution, all they have to do is ignore MS's extensions
and nothing is lost.

MS's extensions may be tempting - e.g., simple registry calls, better graphics,
etc. But this argument makes it seem like I the developer will (1) be completely
unable to resist the temptation to use MS's extensions, because they're so
great, and (2) will be heedless of the risks of doing so.

Nowhere does the argument talk about CHANGING the API's to make them only work
on Windows if you use MS's extensions. The public gets its VM's from Sun (until
the F/OSS community releases its own improved version now that Java is F/OSS) so
MS can't co-opt the functionality. You just have to ignore the extensions and
all is well.

Isn't this a bit demeaning to developers? I get my dander up when people want to
save me from myself. Inevitably, the cure is worse than the disease.

[ Reply to This | # ]

Is EEE a way of (business) life?
Authored by: Anonymous on Monday, January 08 2007 @ 12:39 PM EST
Reading this, and other materials, I can't help but wonder if EEE is basically the way most businesses operate, but that the problem with MS is the methods they use to do it.

As a business owner you look around for popular items/services, and begin to offer them (embrace). You then look for ways to make your products better (extend). If you do it well enough, your competitor's business suffers (extinguish).

Now, in most situations, there is a level playing field, everyone is required to adhere to certain standards. The standards may have to do with safety, government regulations, and other things not within the control of any one business. Any advantage one business has over another is due to better management, better manufacturing processes, etc.

As I see it, MS's way of doing business is by changing those standards to gain an unfair advantage. I think the ODF/XML issue is a good example of that. The fact that they talk of putting other companies out of business doesn't concern me, we hear that kind of talk all the time, from all sorts of businesses. What is of concern is that they change those standards to try to gain an unfair advantage. They change the rules in the middle of the game. Then toward the end of the game. Then right before the final whistle. And then try to convince the Ref that the last pass was really complete, despite it missing the receiver by 10 yards.

Regarding this quote:
Q. This memo goes on to Mr. Gates to say, there are three possible ways to address the threat of the Java platform.

One is to do nothing and gradually die as others innovate around us.

The second is to join the parade of people who are saying, quote, let's kill Microsoft and share their market among us, end quote. Good for everyone else, but reducing us to the much smaller role of a common software company like Lotus or Borland, or even Symantec.

That's a great way to make all our stock options worth zero, even if we would not technically be out of business.

The third choice is to make major innovations to our platform so people still prefer to write to us instead of some tepid cross-platform Java layer. This is our only real option.
I think this is where the problem lies. Of course, option 1 is stupid for any business. Option 2 isn't really as bad as he would like to believe, and there's a nice dig there at some other companies. And I don't think the Anti-MS attitude would be so prevalent if they played fair. Option 3 is the way to go, provided you keep things on a level playing field, which is what MS hates to do. For some reason they don't think they can compete, all things being equal. Maybe they're right.

I think it all comes down to greed. MS wants to be the only software company.

[ Reply to This | # ]

MS: Developers Are "Pawns"
Authored by: Anonymous on Monday, January 08 2007 @ 03:18 PM EST
More from the Comes trial:

http://www.computerworld.com/action/article.do?command=viewArticleBasic&arti
cleId=9007527&intsrc=hm_list

[ Reply to This | # ]

Expert Testimony of Ronald Alepin in Comes v. Microsoft - Embrace, Extend, Extinguish
Authored by: Anonymous on Monday, January 08 2007 @ 03:32 PM EST
PJ, according to the Des Moines Register the court has allowed the plaintiffs to post the trial exhibits and trial testimony on the web.

Des moines register article

So you can find the complete trial transcripts, and I guess, exhibits soon at:

www.iowaconsumercase.com

[ Reply to This | # ]

"Extend" Does not always add value
Authored by: darkonc on Monday, January 08 2007 @ 06:17 PM EST
Sometimes Microsoft provides extensions, and then just pushes people into using them...

For example, DirectX vs OpenGL... You can use OpenGL, but it'll run really slow, and MS refuses to provide some capabilities, so life is rather unpleasant if you're trying to continue development in both Windows and, say, Linux... Your only real choice is to use Direct-X if you want to provide a good user experience.

OpenGL is really only there for people porting existing code. It's not for people doing onging work.

Direct X is an answer to Java Script. It's entirely proprietary, does very similar things, but it results in severe security problems. Too bad for the user, but it really works in terms of locking people into Windows.

---
Powerful, committed communication. Touching the jewel within each person and bringing it to life..

[ Reply to This | # ]

Comments on the transcripts
Authored by: Anonymous on Monday, January 08 2007 @ 07:03 PM EST
What we need, what we really, really need, is the ability to be able to make
comments on the transcripts, something like the way that GPL3 is being
developed.

I doubt that the court transcripts can be legally copied, so what we need is a
way of annotating them, keeping the comments separate. There used to be software
that would do this, but I don't know of anything now. What we need is a
Javascript based facility, so that no install is necessary. I guess it could
frame the site.

Ideas, world?

Jeff

[ Reply to This | # ]

RIAA and compulsory license provided by Section 115 of the United States Copyright
Authored by: Anonymous on Monday, January 08 2007 @ 07:17 PM EST
The billion dollar ringtones war


“For nearly a century, the US Copyright Law has provided
that once a song or other kinds of musical works have been
recorded and distributed to the public, anyone else can
make and distribute recorded copies of that song by
sending a notice to the Copyright Office and paying a
royalty on each copy to the owner of the copyright in the
song. The amount of this royalty is adjusted from time to
time and is currently 9.1¢ for each sale. Because the
owner of the copyright in a song cannot withhold consent,
this is known as a "compulsory license."”

http://www.theregister.co.uk/2007/01/08/steve_gordon_ringtones/

Does this mean that anyone can download songs, notify the
Copywright office and pay the Copywright office $09.1 per
song and then use the song anyway one

[ Reply to This | # ]

pawns section
Authored by: Anonymous on Monday, January 08 2007 @ 07:22 PM EST
MR. LAMB: Could we have Exhibit 2456, please? Why don't you go to the top so
we can see the heading. No, it goes -- give me a little bit more than that.
Yeah.

Q. This is something called DRG summit dated January 16th, 1996. And the
title is power evangelism and relationship evangelism.

It's presented by James Plamondon and Marshall Goldberg. Do you see that?

A. I do.

Q. Do you know what that refers to?

A. The development relations group, DRG, is the group within Microsoft that
has as their mission the relationship between Microsoft and the developer
community.

MR. LAMB: Darin, can you go to the section that relates to evangelism and
ISVs?

Q. Okay. Apparently, Mr. Plamondon says "there are very valuable pawns
in the struggle…" What do you understand he is referring to as
"they." Is that ISVs?

A. Yes. I believe so.

Q. Okay.

Quoting Mr. Plamondon:

"We cannot succeed without them. If you've ever tried to play chess with
only the pieces in the back row, you've experienced losing, okay, because you've
got to have those pawns. They're essential. So you can't win without them, and
you have to take good care of them. You can't let them feel like they're pawns
in the struggle. I mean, all through this presentation previously, I talked
about how you're using the pawns and you're going to screw them if they don't do
what you want...You can't let them feel like that. If they feel like that,
you've lost from the beginning.

It's like you're going out with a girl; forgive me… it goes the other way also.
You're going out with a girl, what you really want to do is have a deep, close
and intimate relationship, at least for one night.

And, you know, you just can't let her feel like that, because if you do, it
ain't going to happen, right. So you have to talk long term and white picket
fence and all these other wonderful things, or else you're never going to get
what you're really looking for.

So you can't let them feel like pawns, no matter how much they really
are."

[ Reply to This | # ]

  • pawns section - Authored by: Anonymous on Monday, January 08 2007 @ 07:49 PM EST
"... you can't let them feel like pawns ..."
Authored by: Steve Martin on Monday, January 08 2007 @ 07:23 PM EST

Plamodon (from the story linked at the top of this article):

"I mean, all through this presentation previously, I talked about how you're using the pawns and you're going to [redacted] if they don't do what you want, and dah-dah-dah. You can't let them feel like that. If they feel like that, you've lost from the beginning.... So you can't let them feel like pawns, no matter how much they really are."

Am I the only one who sees the incredible irony of him saying this out loud?

---
"When I say something, I put my name next to it." -- Isaac Jaffee, "Sports Night"

[ Reply to This | # ]

The GNU aspect
Authored by: inode_buddha on Monday, January 08 2007 @ 08:18 PM EST
This must be what so irritates Messrs. Gates and Ballmer. The GNU GPL encourages
embracing and extending, but they cannot legally extinguish the competition with
it. Hence they are stuck with purchasing linux companies, harassing others,
shifting standards, and etc. It is known that they like a good game, and they
*hate* to lose. It's not about the money for them; rather, its personal.

---
-inode_buddha
Copyright info in bio

"When we speak of free software,
we are referring to freedom, not price"
-- Richard M. Stallman

[ Reply to This | # ]

  • The GNU aspect - Authored by: Anonymous on Tuesday, January 09 2007 @ 12:59 PM EST
Monday's declaration
Authored by: ikocher on Tuesday, January 09 2007 @ 05:52 AM EST
I would like to know what happens in this case, were Mr. Alepin said, or at
least is written as:

16 I should have mentioned OS/2 was in the PC
17 world in the late 1990s and up through the mid
18 1990s.

at page: 7052

OS/2 was introduced in late _1980_, not 1990!!!


Can microsoft lawyers later in cross examination argue this? Or can it be just
fixed as a fault of the court reporter?

Can be checked in
http://www.iowaconsumercase.com/Volume_XXVI_-_January_8_2007.txt


Ivan

[ Reply to This | # ]

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