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The Jihad Defense

Everybody laughed at Microsoft during the trial -- and now the judge has come down against the zealots in Seattle. Could this have been the plan all along?

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The answer to the question How can Microsoft be so stupid -- allowing itself to be brought to the brink of breakup? is that, not impossibly, it is being incredibly smart.

The company seems stupid, of course -- stupid on an epoch-shaping scale, crowned-heads-of-Europe stupid -- because it has so stubbornly and arrogantly, with a kick me sign, put itself in harm's way. Certainly, it appears to have had no strategic awareness whatsoever that (a) perception figures into the law, (b) what happens in courtrooms is unpredictable, and (c) the evidence has been almost entirely damning.

Throughout the trial, I have taken an informal poll of the people I know who regularly make sorties to Redmond. "Are people at Microsoft prepared for the worst?" I have asked. The answer has been, singularly, that no one in Redmond has ever, even to a spouse, quite likely even to himself -- not even as the mountain of e-mails documenting threats and bullying and near extortion and meanness of competitive spirit of all sorts stacked up in the middle of the courtroom (hello!) -- acknowledged the possibility that Microsoft might not prevail. In Redmond, they scoff.

Even defining what exactly the worst case might be involves a high level of dissonance. The worst-case scenario, in Redmond, is not over, done with, broken-up, transformed, finis; it's appeals that go on so many technology generations into the future (when quite possibly there will be a more sympathetic Republican administration) that it's really not worth anyone's time to worry about. ("It's important to remember," said Microsoft president Steve Ballmer last week, both soothingly and obdurately, "that the court's findings are only one step in a long legal process.")

A few months ago, I was matched as a speaker with a Microsoft lawyer at, of all places, a bar-association symposium. I wasn't counting on a sympathetic audience -- a hall full of lawyers (anti-trust specialists at that). But they laughed merrily as I insulted and ridiculed Microsoft's legal team (just mentioning Sullivan & Cromwell got a big hoot). I enjoyed myself. Everyone, apparently, is willing to acknowledge the obvious: Microsoft's defense was absurd and hilarious. Still, amid the laughter, the Microsoft lawyer didn't blink. He didn't hear the taunts. He was like a guard at Buckingham Palace. He was in another world.

This stoicism and implacability and sense of way-out-there righteousness suggest either an incredible performance on the part of everyone at Microsoft, along with its outside lawyers, advisers, and consultants (from lawyers to programmers, everyone knows the line: "We must protect our right to innovate"), or a substantial problem with reality -- or both.

"Microsoft understands, even epitomizes, the most coldhearted business principle: you only make money off people who are weaker than you or stupider than you."

Indeed, from a distance, this all looks quite mad, actually. But I wonder.

We non-Microsoft people see business in an old-fashioned way. Most of us are looking (pathetically) from the perspective of the old economy. In the old economy, people are attached to the corporations they work for in more or less formalistic, functional, and tangential ways. I work for such-and-such; it pays me; I show up for x number of hours a day; management sucks, but it could be worse. Even to the degree that IBM created a corporate culture -- the songs, the country clubs, the white shirts -- it never went so far as to suggest there was something beyond job security and the corporate ladder to believe in.

In Microsoft, we began to see something else. In this model (the jihad model, you might say), which has been replicated by hundreds of other successful technology enterprises, the company transforms itself and its employees into "us" and everyone else, competitors, lay people, the casual Luddite, the rest of America, into "them." It's one of Microsoft's key assets (an asset that every technology company now tries to develop): the maniacal loyalty of its staff. It results in round-the-clock work hours, war-footing secrecy (loose lips sink products that haven't shipped), and near-ideological fervor (business-model discussions are the closest I've come to the left-wing hairsplitting of my youth). Such loyalty and devotion hardly come cheap -- they cost a hefty part of a company's value in stock options. (Although this turns out to be a self-financing: The more options you issue, the more loyalty you engender, the more devoted your following, the more your stock price goes up.) But even more important, it doesn't end with just the money. To maximize the value of your asset, you have to convert economic devotion into emotional devotion as well.


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