MS/DOJ: Gates e-mail criticises Grove

Microsoft chairman Bill Gates had harsh words for Andy Grove after the former Intel chairman took him to task in 1997 for his 'intensity' and creating an environment that was difficult for collaboration, according to documents made public in Microsoft's antitrust trial.

Microsoft chairman Bill Gates had harsh words for Andy Grove after the former Intel chairman took him to task in 1997 for his "intensity" and creating an environment that was difficult for collaboration, according to documents made public in Microsoft’s antitrust trial.

After a three-hour meeting in October 1997, Gates described the face-to-face with Grove in e-mail to colleagues as "a big attack by him on how we are so hard to work with." Gates also commented to colleagues that Grove "also attacked me personally talking about my intensity being an awful force."

Gates wrote a two-page e-mail to Grove in response and that document was part of hundreds of Microsoft documents made public Tuesday as part of the landmark antitrust trial, which is expected to conclude testimony as early as this week.

"Why do we have a great relationship with Compaq, HP, NEC and many others that include on site people doing great work with us and great field marketing efforts?" Gates wrote on Nov. 2, four days after his meeting. "Why are none of these relationships characterised with the same problems we have with Intel?"

Gates goes on to answer his own questions. "I am sitting here reading the slide entitled 'Rules for Working with Microsoft.' This is not a slide about Intel products and how we help Intel with its products. These are a set of attitudes suggesting Intel entitlement," Gates said. "This is a slide about Intel’s rights to put its software into our products."

The source of the dispute between the two chief executives who had to work closely because they made up the so-called "Wintel" duopoly, was Intel’s growing software development staff and some contentious interactions they had with Microsoft staff prior to the roll out of the Windows 95 operating system. In perhaps the most surprising testimony of the U.S. and state government’s antitrust trial against Microsoft, Intel offered up one of the damaging witnesses. Steven McGeady, the Intel vice president who oversaw the company’s aborted Internet software developments, testified that Microsoft threatened to withhold support for Intel’s MMX and Merced microprocessors because Intel was pushing a multimedia technology called Native Signal Processing that was designed to run with Windows 3.1. McGeady labeled that threat "both credible and fairly terrifying."

“We hire very good software people." Gates wrote to Grove. "You enthuse about how great your software people are and I respectfully tell you that they are good people. My whole career is about hiring and organising great software development. I guess part of that job is telling a chip company that their software people are wonderful even when it is not true."

Gates also details the personal dynamics in the relationship he had with Grove. "Your attack last Wednesday was in many ways much worse than the dinner of many years ago. In this case you not only critiqued my personal style (can you imagine my ever doing that to you?) you said, 'There is something very wrong with the way Microsoft works with Intel' and that was your entire view. You didn’t say anything about how hard we have tried to accommodate Intel fancying itself a software company doing things for our operating systems."

The closing was even sharper. Gates said that the slides Grove presented to him at the meeting suggest that some of the Intel software products, including Native Signal Processing, "were smart." At the trial, Microsoft documented that its officials were upset because the technology had been designed to run with an older version of Windows, not the more recent version that was to ship in combination with Intel’s newest microprocessor chips. That’s why Microsoft objected to the technology.

"The people who made these slides live in a different world than we do," Gates said. "In our world, software has to be small, has to be debugged, has to ship as part of a major initiative, has to avoid compatibility problems, has to avoid end user calls.

"I am sure there are a million things I don’t know about chip development," Gates continues in his conclusion. "When Intel finds someone who has some humility about developing operating systems and the complexities involved then maybe we can try to work together."

Microsoft witness Richard Schmalensee was expected to return to the witness stand tomorrow for a continuation of cross examination by government attorney David Boies, who has been questioning the economist's impartiality based on the amount of funds he has received from Microsoft during the past seven years.

(Wasserman is Washington, D.C., bureau chief for The Industry Standard.)

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