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Date:	Fri, 28 May 1999 18:14:01 PDT
From:	Peter Skye <pskye@peterskye.com >
Reply-To:	scoug-general@scoug.com
To:	scoug-general@scoug.com
Subject:	SCOUG-General: More on Microsoft's royalty bill

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Stan Sidlov was the Event Chair for last year's Warpstock.

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Date: Fri, 28 May 1999 08:57:18 -0400
Subject: NYT: IBM Exec Describes Price Pressure by MS
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http://www.nytimes.com/library/tech/99/05/biztech/articles/28soft.html

Unfortunatly this article on the web, doesn't have the full text of the printed
paper.

Let me quote some items not in the on-line version

"The problems began, Mr. Norris said, at a meeting in November 1994 at which
Microsoft offered IBM lower prices and more cooperation if it would eliminate or
reduce shipments of OS/2.

" Instead, Mr. Norris said, IBM executives said they intended to step up OS/2
sales and "ship it on as many units as we could."

"Mr. Norris said a Microsoft executive told IBM that Microsoft's chairman
William H. Gates, was "surprised and upset" by the decision and after that,
Microsoft was "unresponsive to phone calls and very slow" in supplying advance
versions of Windows 95."

"But Mr. Pepperman recalled IBM's ad campaign against Windows 95 asserting that
OS/2 was faster than Windows 95 and would crash less often. "Why wait for
Windows 95?" IBM's ads asked.

"Mr. Pepperman produced a record of a phone call to senior IBM executives in
July 1995 in which Mr. Gates was irate over "IBM's lack of respect for
Microsoft."

The article goes on to state the pricing that MS charged IBM. Windows 3.1 cost
IBM $9. per copy, Windows 95 cost $45.90 and MS would not sign the contract with
IBM until 15 minutes before Windows 95 release, putting IBM at a severe
disadvantage. Additionally the Win95 contract said that if IBM didn't sell 300K
copies in the first 5 months, there would be a 20% increase in the price. IBM
sold 100K but the MS price went up to only $46.60. [Must have used the Win 3.1
calculator.]

Finally IBM produced evidence that it's license costs went from $40 million
(Win3.1) to $220 million. The last increase cost IBM an additional $3.5 million
a year.

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