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| Authored by: foulis on Wednesday, December 19 2012 @ 05:48 PM EST |
<p
align=right><b>PLAINTIFF'S<br>EXHIBIT<br><u>2156</
u></b><br>Comes v. Microsoft</p>
<u>DOJ - Legal</u></p>
From: Bill Gates<br>
To: Bernard Vergnes; Brian Fleming; Chris Peters; Hank Vigil; Jeff Raikes;
Joachim Kempin; John Neilson; Lewis Levin; Mike Brown; Mike Maples; Pete
Higgins; Peter Pathe; Richard Fade; Steve Ballmer<br>
Cc: Bill Gates<br>
Subject: Office and other revenue<br>
Date: Thursday, October 06, 1994 11:32PM</p>
Some thoughts on Office issues related to pricing.....</p>
<<File Attachement doc1.doc>></p>
<p
align=right><b>EXHIBIT</b><br><u>30</u><br&g
t;6-22-01<br><br>FL AG
002766<br>CONFIDENTIAL<br><br>MX
1395980<br>CONFIDENTIAL</p>
<center>Page 1</center>
<p align=right>(handwritten)VERGNES EXH. 28</p>
<hr>
<br>
To: Steve Ballmer; Mike Maples; Pete Higgins; Jeff Raikes; Bernard Vergnes;
Richard Fade; Joachim Kempin; Mike Brown; Hank Vigil; Lewis Levin; Chris Peters;
Peter Pathe; John Neilson; Brian Fleming<br>
From: Bill Gates<br>
Date: October 6, 1994</p>
<b><big>Office and other revenue</big></b></p>
One way to look at our Office pricing is to remind ourselves that we are still
gaining share of installed base and that is our overriding strategic goal. We
are in a strong enough position that over time our competitors will be cutting
back on their technical and sales investments and we will become a preferred
supplier. I discuss this share opportunity in another memo. However, Office
revenue is critical enough that we should consider if we can do better without
giving up our overriding strategic goal.</p>
Our revenue per Office license continues to fall for a number of reasons. I am
particularly concerned about the drops at the start of this fiscal year. I
discuss here some of the factors I think we need to focus on more
diligently.</p>
License discounts: In the retail channel our average license discount is high
and getting higher all the time. The field should be very involved in tracking
and setting goals for these levels. For example I think the discount should be
lower in countries where we have a high market share. I am not sure why it is
necessary for the percentage of business done with licenses or the average
discount to be going up so quickly. With the myriad forms of licenses including
custom select agreements we may have structured this business in such a complex
way that we can't really understand what is happening. When I discuss the trends
in licenses some people say to me they didn't notice it or they see different
numbers. This is a bad sign. Meanwhile customers find our offerings quite
complex as well. Ideally we should be able to discount prices where it is really
necessary because of competition and not in other cases. We have not come up
with new approaches to achieve this. One particularly discounted
"license" is our Academic license. This has become a much larger
component of our sales in many countries and needs to be investigated carefully.
The first step to dealing with these discounts is to simplify our offerings and
improve our reports so we can actually tell what is happening. Perhaps sales
people should have a clear incentive to avoid discounting. Many times when we
convert an account to licensing it is business we would have gotten anyway at
higher prices. Are these products that we should eliminate from these programs?
What impact would changing discount levels have? Do these licenses distort
revenue timing be[sic] accelerating revenue causing a problem later
on?</p>
Concurrent usage: This is a license discount of a special nature. I have often
worried about its impact over time. The arguments for keeping it are that most
customers don't use it and the customers who do care a lot about it. We are
still trying to increase our share and avoid creating issues where Microsoft is
viewed as being "high priced" or not "customer sensitive".
Eliminating concurrent use even for new versions could trigger that. The danger
is that it as customers demand that network administration tools support this
and demand that applications support LSAPI it will become mainstream. Any
corporation that distributes applications across the network can also track
usage through the network. When a customer switches to concurrent use it cuts
our revenue from that customer by over 50% and sometimes as much as 80%. A
worldwide corporation can take their concurrent licenses around the globe during
a 24-hour period. Associations can be formed to buy groups of license and share
them through a public network structure. Are there products that we should
eliminate from this program? I am not concerned that this will hurt us badly in
the short run like the discounting described above but I don't think we will be
able to stay with concurrency in the medium term. I think we need creative ideas
on how to "ease" our way away from concurrent pricing over the next
2-3 years.</p>
Saturation: As more and more machines are sold as replacement machines and a
high percentage of new machines go into the home our Office volumes could
decline. I know I am reasonably unique is raising this</p>
<p align=right>FL AG 0027667<br>CONFIDENTIAL</p>
<p align=right>MX 1395981<br>CONFIDENTIAL</p>
<hr>
<br>
warning flag. Pete is presenting the results of some work his group has done on
this in the next month. We have lots of large account where our ongoing revenue
is a lot smaller than our peak revenue. Our penetration onto Macintoshes is a
good example of how a shift to the high growth new user markets (home and
education) can negatively impact our sales. The salvation is to get increasing
revenue from the installed base.</p>
Upgrade/Maintenance revenue: I believe that under the right program businesses
will be willing to pay $100 per year (after ALL discounts are applied) to have
their office workers have the best productivity software. This doesn't mean they
want to waste a lot of time installing and learning a new program with no
significant productivity or business benefits. Corporations are sometimes more
open minded to paying for maintenance releases than they are to paying for new
feature releases! I think we may have to give provide a choice of getting the
latest (A,B,C...) type upgrade for Office or getting the new version with
features which may tax the machine resources and require some learning. By
giving corporations that choice I think we should be able to sign Office user up
to $100 per year. I have always wondered if we could lower the upfront price for
Office substantially in return for a commitment to buy upgrade. Compare a 5 year
license at $100 per year in terms of value to Microsoft to a one time office
license with low percentage of upgrade/maintenance. From a cash flow point of
view competitors might not be as generous as to provide this option. Also
customers may not give them as much credit for being able to stay up with
technology and give customers what they need.</p>
Do we understand what percentage of our customers are signing up for maintenance
and what they expect? Do we feel that maintenance and support should be brought
together as a single offering for large customers? I think we should establish
goals and measurements in this area.</p>
Over time our biggest opportunities come from the "sea changes" I
discuss in another memo which has a more optimistic look at what the future
might hold for Office and other revenue. However we need to understand and
optimize our licensing prices to maintain customers understanding of the value
of software.</p>
<p align=right>FL AG 0027668<br>CONFIDENTIAL</p>
<p align=right>MX 1395982<br>CONFIDENTIAL</p>[ Reply to This | Parent | # ]
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| Authored by: JesseW on Thursday, December 20 2012 @ 01:56 PM EST |
Non-responsive material redacted
From: Brad Silverberg
To: Joachim Kempin
Subject: RE: Compuadd EXPRESS
Date: Tuesday, June 02, 1992 11:49 AM
fabulous.
-----------
> From: Joachim Kempin
> To: Brad Silverberg
> Subject: Compuadd EXPRESS
> Date: Tuesday, June 02, 1992 11:04 AM
>
> Signed!
>
>
From: Brad Silverberg
To: Joachim Kempin
Subject: RE: Important -- DR DOS rumor
Date: Tuesday, June 02, 1992 11:52 AM
i do not understand this joachim.
i can easily imagine novell running a big advertisement that says,
Now, Microsoft Endorses DR-DOS. They will go to every one our own
oem's saying how this is proof that their is completely compatible with ms-dos.
Even Microsoft now agrees they will say.
Is this what you want?
----------
> From: Joachim Kempin
> To: Brad Chase; Susan Boeschen
> CC: Brad Chase; Brad Silverberg; Donna Garrison; John Williams; Sergio
Pineda
> Subject: RE: Important -- DR DOS rumor
> Date: Tuesday, June 02, 1992 11:14 AM
>
> You are completely out of line BRAD. We cannot tie MS-DOS sales
> to APPS sales and that is what You
> are suggesting. I take their money for WORKS and continue to
> turn the DOS situation around which we
> lost because we slipped product schedules in the first place.
> > >From bradc Fri May 29 17:58:08 1992
> > To: susanb
> > Cc: bradc bradsi donnag joachimk johnwil sergiop
> > Subject: RE: Important -- DR DOS rumor
> > X-MSMail-Message-ID: 87968F7A
> > X-MSMail-Conversation-ID: 87968F7A
> > X-MSMail-WiseRemark: Microsoft Mail -- 3.0.620
> > From: Brad Chase <bradc@microsoft.com>
> > Date: Fri, May 29 92 17:54:07 PDT
> >
> > this is a difficult mail. i am familiar with OEMs effort to convert
> > them to MS-DOS and in fact one of my people has been trying to assist
> > (Sergio may I pls have an update by end of day tuesday?). Moreover, i
> > do not argue your rights as an application group but we do need to
look
> > at the larger picture here. Over here in systems we go out and tell
the
> > world that DR DOS is not MS-DOS (which it is not) and that one of the
> > key benefits of MS-DOS is compatibility now and in the future. We
> > reinforce that OEMs and ISVs primarily test their applications on
> > MS-DOS and not DR DOS (which is true) and that consequently there is
> > compatibility risk now and in the future if a user goes with DR DOS.
> > This has proven true as DR has already had 5 revs of DR DOS 6 since
> > their sept release.
> >
> > However, if we put ROM Works on this machine it is equivalent to MS
> > endorsing DR as equivalent to MS-DOS. DR can stand up and tell the
> > world (including other OEMs) that even MS apps group thinks DR DOS is
> > fine. Even if you do no work in house by agreeing you are saying you
> > are comfortable with the quality of Works running on DR DOS.
Moreover,
> > MS is helping to sell a machine with an OS that is a aggressive and
> > well funded competitor. Would anyone in this company do a deal with
> > IBM and OS/2? i think not.
> >
> > I realize that if you don't do the deal then it will go to one of
your
> > competitors and I realize there is short term revenue involved but i
am
> > not sure at the macro level that this is the best thing for the
company.
> > Feedback is welcome, i will get a complete brief from Sergio so I
> > understand all the facts (including the revenue for the Works group)
> > and will make sure we re-double our efforts to get ms-dos on this
> > palmtop so the issue goes away. In the mean time this deal has me
very
> > concerned.
> >
> > thx
> > -----------
> > > From: Susan Boeschen
> > > To: Brad Chase
> > > Cc: Brad Silverberg; Donna Garrison; John Williams; Sergio
Pineda
> > > Subject: Important -- DR DOS rumor
> > > Date: Fri, May 29, 1992 2:33 PM
> > > Commodore is creating a palmtop product for the US and Euro
markets
> > > targeted for shipment during the Fall timeframe. They have opted
> > > to go with DR DOS ROM version due to a contractural commitment
> > > with DRI and price issues. There is no option to leverage
> > > an MSDOS/Apps deal. The OEM team is still working to convert
them.
> > >
> > > They have expressed interest in our ROM Works product, and we
have
> > > been nogotiating for a 100K commitment from them. We are not
offering
> > > a special version of the product. This is our regular ROM Works
product
> > > and we have been very clear that we will not change the product
to
> > > address any DR DOS quirks. We've also told them that our product
is
> > > untested under DR DOS. As with all ROM Works projects, we will
> > > do compatibility testing here on campus to insure proper
performance.
> > >
> > > While we're behind the OEM team in their negotiations to get
> > > MS DOS on this machine and will cooperate in any way we can,
> > > we're an application group and will offer our product on
> > > any platform it runs on. We have Mac products and at Bill's
> > > directive went pretty far down the development path in the past
with
> > > both Deakmata and Atari versions as well. In this case we're
> > > not offering any special development work as it doesn't make
> > > sense from a business perspective but "yes" it's
possible we
> > > will cut a ROM Works deal for a DR DOS machine unless the OEM
> > > group can get them to convert to MS DOS.
> > >
> > > We cannot leverage an MS DOS deal with apps, and the OEM team is
> > > going at them hard to convert.
> > >
> > > >From susanb Thu May 28 16:17:17 1992
> > > To: donnag johnwil
> > > Subject: ROM Works
> > >
> > > Date: Thu May 28 16:16:18 1992
> > >
> > > Can you please give me more details on our ROM Works
> > > deal.
> > >
> > > >From bradc Thu May 28 15:30:33 1992
> > > X-MSMail-Message-ID: F2E6E4ED
> > > X-MSMail-Conversation-ID: F2E6E4ED
> > > X-MSMail-WiseRemark: Microsoft Mail -- 3.0.620
> > > From: Brad Chase <bradc@microsoft.com>
> > > To: susanb
> > > Date: Thu, May 28 92 15:26:13 PDT
> > > Subject: Important -- DR DOS rumor
> > > Cc: bradc bradsi sergiop
> > >
> > > Susan could you fill me on on a vicious rumor that we are doing
a
> > > special version of Works in ROM to support the ROM version of DR
DOS
> > > for a Commodore machine? Is it true? what is the scoop?
> > > one of our test mgrs heard this from megen
> > >
> > > thx.
> > > Brad
> > >
> > >
From: Brad Silverberg
To: Joachim Kempin
Cc: Brad Chase
Subject: RE: RE: MS-DOS 3.22 support in FFS
Date: Tuesday, June 02, 1992 11:56 AM
i want to move oem's to the current version. supporting old versions
is a major headache and i believe unnecessary.
the only version i am considering is rom 3.22 temporarily.
i would like to say, "If you want the most current technology (ie,
flash), you need the new version of the os". in addition, other
technologies, like compression, will only be tested for msdos5 and
above.
we've gotten the sie of rom dos 5 down to 3.22 levels or very close.
it should not be an issue
----------
> From: Joachim Kempin
> To: Brad Silverberg
> Subject: FW: RE: MS-DOS 3.22 support in FFS
> Date: Tuesday, June 02, 1992 11:22 AM
>
> > >From rayka Sat May 30 10:58:45 1992
> > To: fernandd sergiop
> > cesman rayks sandyd sheriv
> > Subject: RE: MS-DOS 3.22 support in FFS
> >
> > Date: Sat May 30 10:57:48 PDT 1992
> >
> > I believe that thi is a major problem because companies like
> > Psion, Intel, and my embedded customers have been using FMFS 1.0
> > with older MS-DOS version such as MS-DOS ROM Version 3.22.
> > We don't how many OEMs have been using FMFS 1.0 and will be using
> > FFS with older versions of MS-DOS because Intel, Curtis,
> > Daabooks and Annabooks have sold a number of their Flash development
> > kits with FMFS 1.0.
> >
> > Because of MS-DOS ROM Version 5.0's size, I don't think that general
> > purpose palmtop people like Psion and HP will be switching from their
> > current MS-DOS Versions with their current systems. HP might not be
> > using FSFS1.0 with their HP95LX but FFS makes this more attractive
for
> > their MS-DOS ROM Version 3.22 HP 95LS. In a number of embedded
systems,
> > the OEM will not change the version of MS-DOS that they ROM'd.
you been riding much?
----------
> From: Antonio Salerno (Millennium Micro)
> To: Brad Silverberg
> Subject: RE: RE:
> Date: Tuesday, une 02, 1992 3:35PM
>
> OH... THAT shift level... yeah, wearing the edges
> makes sense.
>
> Don't know the scoop myself. Jobs really tore his
> up regarding being a manager and doing the technical
> stuff of late. Article in the Mercury. Let me
> know if you need the article...
>
From: Brad Silverberg
To: Joachim Kempin
Cc: Brad Chase; Susan Boeschen
Subject: RE: Important -- DR DOS rumor
Date: Tuesday, June 02, 1992 2:46PM
this may have nothing to ddo with endorsement from YOUR point of view
but will have everything to do with endorsement from Novell's. You
will see, Novell will be telling each of our oem's that Microsoft has
now endorsed dr-dos.
------------
> From: Joachim Kempin
> To: Brad Silverberg
> Cc: Brad Chase; Susan Boeschen
> Subject: RE: Important -- DR DOS rumor
> Date: Tuesday, June 02, 1992 3:15PM
>
> This has nothing to do with endorsement. I completely agree
> with Susan. MS-DOS needs to be sold on
> its own merrits. DR-DOS seems to be working fine with WORKS, no
> reason to decline a deal. I
> actually think it is great to close it, not only because of the
> $ I might get but because of the
> alibi. I could actually demonstrate that we do not tie things together.
>
> > >From bradsi Tue Jun 2 12:56:40 1992
> > To: joahimk
> > Cc: bradc
> > Subject: RE: Important -- DR DOS rumor
> >
> > X-MSMail-Message-ID: A1AEE06F
> > X-MSMail-Conversation-ID: A1AEE06F
> > X-MSMail-WiseRemark: Microsoft Mail -- 3.0.620
> > From: Brad Silverberg <bradsi@microsoft.com>
> > Date: Tue, Jun 02, 92 11:52:44 PDT
> >
> > i do not understand this joachim.
> >
> > i can easily imagine novell running a big advertisement that says,
Now,
> > Microsoft Endorses DR-DOS. They will go to every one our own oem's
> > saying how this is proof that their is completely compatible with
> > ms-dos. Even Microsoft now agrees they will say.
> >
> > Is this what you want?
> > ----------
> > > From: Joachim Kempin
> > > To: Brad Chase; Susan Boeschen
> > > CC: Brad Chase; Brad Silverberg; Donna Garrison; John Williams;
Sergio Pineda
> > > Subject: RE: Important -- DR DOS rumor
> > > Date: Tuesday, June 02, 1992 11:14 AM
> > >
> > > You are completely out of line BRAD. We cannot tie MS-DOS sales
> > > to APPS sales and that is what You
> > > are suggesting. I take their money for WORKS and continue to
> > > turn the DOS situation around which we
> > > lost because we slipped product schedules in the first place.
From: Brad Silverberg
To: Sharon Hornstein
Subject: reorg
Date: Tuesday, June 02, 1992 2:47PM
---
(Contact me for comment licensing, e.g. GPL, CC, PD, etc.)[ Reply to This | Parent | # ]
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- PX01339 - Authored by: PJ on Thursday, December 20 2012 @ 11:58 PM EST
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