Software Execs Blast Microsoft

A key Republican lawmaker, Sen. Orrin Hatch of Utah, stepped up his attacks on Microsoft, inviting several rival software companies to chime into the chorus criticizing the software company's business practices.

Larry Ellison, of top Microsoft nemesis Oracle, was the biggest name on the witness list, but the most provocative testimony so far came from Rob Glaser, a 10-year Microsoft employee who left to found RealNetworks, which makes audio and video software for the Internet.

"Microsoft is taking actions that create obstacles to the freedom and openness of the Internet," Glaser told the Senate Judiciary Committee hearing. "I'm here because Microsoft is taking actions that simply stop our company's products from working for computer users." Microsoft owns a 10 percent stake in RealNetworks.

Glaser said Microsoft's Windows Media Player, which is based in part on RealNetworks' technology, prevents RealAudio and RealVideo from working.

Glaser said Microsoft's Windows Media Player, which is based in part on RealNetworks' technology, prevents RealAudio from working. On large computer monitors in the hearing room, Glaser demonstrated the bug in Microsoft's player.

Sen. Robert Torricelli, D-N.J., produced an affidavit from Microsoft Vice President Paul Maritz that implied that Glaser's testimony was only a negotiating ploy with Microsoft to win a better licensing agreement. Glaser denied Maritz's allegation.

Hatch, R-Utah, defended Glaser. "I know you're an honest man," the senator said. "We're getting complaints from all over the place from people just like you."

A Microsoft spokesman said outside the hearing room that Glaser's demonstration was misleading because he used a beta or test version of RealNetworks' latest audio player. He said Microsoft would work with RealNetworks to resolve the problem with the beta player.

The Justice Department reportedly is widening its antitrust probe of Microsoft to include the kind of multimedia software that RealNetworks writes.

Jeffrey Papows, chief executive officer of IBM's Lotus Development Corp., charged that Microsoft is using its Windows monopoly to drive rival email, messaging and groupware products out of business, "a practice that I believe threatens our industry and its role as an innovative force."

Papows said Microsoft pressured computer makers like Compaq and Acer through "a combination of veiled threats and pricing structures" to dissuade them from including business software applications, such as Lotus SmartSuite, which compete with Microsoft's Word or Office software. He said Microsoft now has a 90 percent market share.

In his opening remarks, Hatch said the critical debate "is the extent to which Microsoft is exploiting its current monopolies both to kill off potential threats , and to leverage these monopolies to control new technologies which will define the future of computing."

Microsoft declined to provie a witness at the hearing, nor did it provide the committee with names of any potential friendly witnesses from outside the company, Hatch said. Notably, the hearing did not include any representatives from Novell, which is headquartered in Hatch's home state and is a major player in networking software.

Others testifying included Sybase CEO Mitchell Kertzman and Michael Jeffress, vice president of Television Host, which produces an electronic television programming guide that competes with a product Microsoft will bundle with Windows 98.

"Bill's strategy is very simple," Oracle's Ellison said of Microsoft CEO Bill Gates. "Just add it to Windows."

Microsoft has been known to invest in its rivals. Microsoft took a $30 million investment in RealNetworks in June 1997, when it also agreed to a license the company's technology for an additional $30 million. Not too long after the ink on that agreement was signed, Microsoft then agreed to buy one of RealNetworks' competitor Vxtreme, and make a minority investment in another one.

Microsoft's own streaming media product, NetShow, is available for free for download and is included in the Windows 98 operating system.

Others testifying included Sybase CEO Mitchell Kertzman and Michael Jeffress, vice president of Television Host.

Written By Rex Nutting