Microsoft Talks Back

By Peter Galli  |  Posted 2004-11-12 Print this article Print

In a statement released Friday, Microsoft disputed those assertions, saying that Novell is using the lawsuit to blame Microsoft "for its own mismanagement and poor business decisions. The record is clear that bad decisions and business mistakes are the reasons WordPerfect fell out of favor with consumers. Its also unfortunate, and surprising, that Novell has just now chosen to litigate over a business it owned for a very short time and that it sold more than eight years ago." The unattributed statement went on to say that even before Novell bought WordPerfect in 1994, that product had already begun to decline. "Indeed, Novells stock dropped 15 percent the day after it announced the acquisition. WordPerfect deliberately chose not to develop a version for early versions of Windows in the hope that depriving Windows of a key application would limit the success of Windows," it said. This and other missteps had led to a decline in WordPerfects popularity that resulted in Novell selling it for about one-eighth of what was paid for it only 20 months earlier, the Microsoft statement said.
There were also other fundamental flaws in Novells complaint, it said, and, given that the company had not owned WordPerfect for eight years, its claims should be barred by the legal doctrine called the statute of limitations.
"It is also surprising that Novell seeks to use the courts findings in the Department of Justice case against Microsoft. That case had nothing to do with WordPerfect or any other office productivity software, and focused almost exclusively on other markets and technologies. In fact, Novell was barely mentioned during the U.S. antitrust trial. Moreover, the U.S. antitrust laws do not support Novells claims that a company is required to share its inventions and trade secrets with its competitors," the statement said. Novells LaSala said that while the lawsuit is unrelated to his companys current business, the claims are important and hold considerable value for Novell. "We intend to pursue aggressively a goal of recovering fair value for the harm caused to Novells business by Microsofts anticompetitive actions" he added. An industry executive at a major software vendor who is familiar with the matter told eWEEK that the settlement of the NetWare antitrust claims had been nine months in the making and had nothing to do with the recent departure of Novell vice chairman Chris Stone. Novell management, with Stones support, wanted to settle that matter so it could "then turn around and hit them [Microsoft] with the WordPerfect suit," the executive said. " "The NetWare suit is three years old now, and the legal costs of continuing would have been astronomical. The $563 million settlement Microsoft paid Novell also helps them." Some users were surprised not by Novells decision to settle, but rather by Microsofts, saying that NetWare is all but a dead platform. "The gravediggers are already working to prep that hole. If a company is currently on NetWare, I think Novell has given them sufficient reason to seriously consider SuSE Linux as a replacement over the standard move to Microsoft," John Kretz, president of Enlightened Point Consulting Group LLC in Phoenix, told eWEEK. The money would be good for Novell and would help fill the coffers drained by the Ximan and SuSE acquisitions, he said. "Im hoping theyll use the money to bolster operations, like development, support and marketing staff." Check out eWEEK.coms for Microsoft and Windows news, views and analysis.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel