Headaches greet Microsoft president

Most new presidents can count on a 100 day honeymoon after their inauguration. But for newly appointed Microsoft president Steve Ballmer, that blissful period is probably going to be something less than 100 hours.

Growing discontent among customers over bugs in Windows 98, delays in the development of Windows NT 5.0, and a rising tide of complaints from competitors will be Ballmer's top three priorities. With Ballmer serving as president, customer satisfaction will be a higher Microsoft priority, and a more business-like discipline will be observed on campus, both company officials and observers said.

Ballmer said the new post "gives me a bigger platform internally to beat the drum louder about our total fixation on customer satisfaction and customer delight."

Ballmer's ascension this week came just as an array of Microsoft competitors testified in front of a US Senate Judiciary Committee chaired by Senator Orrin Hatch (Republican-Utah).

Robert Glaser, chairman and chief executive officer of Seattle-based Real Networks, which has been a pioneer in streaming media, showed the committee how installing Microsoft's new Windows Media Player "broke" the widely used RealPlayer software.

"What Microsoft is doing is wrong, pure and simple. It damages our business and reputation," Glaser said.

Microsoft cried foul, saying the problem comes from a bug in Real Network's RealSystem G2, which has been in beta release for a week. Real Network officials acknowledged that Glaser demonstrated the beta version for the committee, but said the problem extends to its currently available products.

Sybase CEO and Chairman Mitchell Kertzman testified that Microsoft has already begun using NT to eliminate competitors.

"I am now firmly convinced that the unchecked use of Microsoft's monopoly position poses the most serious threat to the vitality of the software industry," Kertzman said.

A little more than one year ago Sybase introduced a new product, Jaguar CTS, a software platform for deploying and developing transaction-intensive business applications on the Internet.

About one week after publishing information on the product, Kertzman said he was called by David Vaskevitch, an executive at Microsoft, who said Microsoft "did not think that [releasing such a product] was a good idea." Kertzman said the executive asked him whether he understood that Jaguar would compete with a similar product from Microsoft -- Microsoft Transaction Server (MTS).

"The overall tone of the call left me with a singular impression that we had received a threat that competition in the market with Microsoft is not acceptable behavior," Kertzman said.

Within weeks of that conversation, Microsoft announced that it was bundling MTS with its Windows NT operating system, Kertzman said.

Jeff Papows, president and CEO of IBM's Lotus subsidiary, said he reluctantly came before the Judiciary Committee because "Lotus has a long and complex relationship with Microsoft. Lotus products are optimized for Microsoft technology and will continue to be," he said. "[But] having gained a solid foothold in the browser market, Microsoft is now turning its attention to messaging and groupware, which are key products in both corporate networks and the Internet."

"We see Microsoft using some of the same behavior to gain market dominance in the messaging, groupware, and server software markets [as] it used so successfully in the desktop suite and Internet browser segments," Papows added.

Oracle CEO Larry Ellison told the committee that Microsoft has been using the Windows platform as a way to dominate the industry.

Ellison recounted Microsoft's assault on Netscape; by first giving away the browser and then incorporating it into Windows, Ellison said the move was a "blatant attempt to destroy the Internet innovator, Netscape."

"Microsoft's response to successful innovation is chilling," Ellison said.

Microsoft last week dismissed reports that the government is investigating whether Microsoft tried to talk Apple Computer out of participating in the the consumer multimedia market.

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