Microsoft on Standards

There are many delicious morsels in the many exhibits in the Iowa Comes v. Microsoft case. Maybe that is why the official website containing the exhibits was taken down within hours of the case being settled? Luckily websites like Slated Antitrust filled the void and host backup copies of these candid insights into Microsoft’s internal strategies.

Let’s take a look inside.

First, here is the opening “Evangelism is War” section of a report called Effective Evangelism.

Our mission is to establish Microsoft’s platforms as the de facto standards throughout the computer industry. Our enemies are the vendors of platforms that compete with ours: Netscape, Sun, IBM, Oracle, Lotus, etc. The field of battle is the software industry. Success is measured in shipping applications. Every line of code that is written to our standards is a small victory; every line of code that is written to any other standard, is a small defeat. Total victory, for DRG [Developer Relations Group], is the universal adoption of our standards by developers, as this is an important step towards total victory for Microsoft itself: ‘A computer on every desk and in every home, running Microsoft software.’

Then we have this email from Bill Gates:

One thing we have got to change is our strategy — allowing Office documents to be rendered very well by other peoples browsers is one of the most destructive things we could do to the company.

We have to stop putting any effort into this and make sure that Office documents very well depends on PROPRIETARY IE capabilities.

Anything else is suicide for our platform. This is a case where Office has to avoid doing something to destroy Windows.

And here is a excerpt from an email from then Microsoft GM Aaron Contorer to Bill Gates:

Switching Costs

In economics there is a well-understood concept called switching costs – how much it costs for a trading partner to change partners. Our philosophy on switching costs is very clear: we want low swiching costs for customers who want to start using our platform, and we want to provide so much unique value that there are in effect high costs of deciding to move to a different platform. There is a name for this: it is called Embrace and Extend.

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; etc. 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 sure they like it because they prefer us to screw up.

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 products much harder to clone – this is the difference between innovation and being just a commodity like corn 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.

If we fail to embrace, we can lose because there are big barriers to buying our products. But if we fail to extend, or do only humble work that is easy to clone or to surpass, we automatically lose because our competitors will spend literally billions of dollars to clone our work and replace us.

Patrick Ferell, at the time head of MSN tools and applications, worried about the internet’s open standards and protocols:

Looking out from the inside the current MSN strategy some things that concern me about the Internet and the Web are:

1) The Internet is about as open as it gets. This means that an ISV can go and buy a C compiler and a server, rent a wire and create a new service or create an extension to an existing one. The tools are still a little crude but there are very few bottlenecks in this process.

2) The Internet defines formats and architectures that MS has no control over and very little say in. MIME and the WWW helper architectures are crude but quite extensible.

Are there any other good Microsoft quotes out there regarding formats or standards? Post as a comment and I’ll add the best ones to the main post.

Change Log:

02/11/2007 — added Embrace & Extend quote sent in from reader
02/14/2007 — note on the links to the exhibits being broken
02/03/2008 — added MSN strategy quote