[Down to the Wire]

August 7, 1996

Netscape goes to jail, does not collect $200

Netscape Communications Corp. wants to sell Web servers on Windows NT. O'Reilly & Associates Inc. wants to sell Web servers for Windows NT. Many others do, too. And, why not? That's the Microsoft Corp. gold rush promise, and the reason why vendors are lining up to help create a Windows NT momentum.

The problem is, Microsoft only wants vendors to make money in software that reinforces its hold on the industry -- that is, value-adding software like Windows disk utilities. Strategic areas in which Microsoft dominates or wants to dominate are off limits. And, that includes Web servers.

So, Microsoft is up to its old trick again, and competitors are crying to the U.S. Department of Justice.

The core issue is, naturally, money. The price for Windows NT Server with five client access licenses (the minimum) is $809. Windows NT Workstation sells for $319. Netscape's argument to its customers is that if you want to implement a Web server on Windows NT, use Windows NT Workstation. Otherwise, you are paying Microsoft a difference of $490 for file, print, and other services you don't want or need.

Am I missing something, or does this seem perfectly logical to you, too?

The problem is, Microsoft doesn't want you to let any more than 10 TCP/IP users connect to the Windows NT Workstation product at a time. And, it says so in the license agreement. If you want to run a Web server, Microsoft argues, you should buy the more expensive server product.

Aye, and there's the rub. Windows NT Server includes Microsoft's "free" Internet Information Server (IIS).

By the way, Windows NT Server 3.51 in the 10-user configuration sells for $999, and 4.0 sells for $1,129, so I guess that puts the price of the free Internet Information Server at about $130. (Yes, you can argue that in 4.0, Microsoft adds more than a Web server to the Server product. But then you'd have to explain why Novell Inc. is selling Green River NetWare revision with improvements and a Web server without raising its price).

Regardless, if you're forced to buy Windows NT Server in order to implement your Web site on NT, you get IIS whether you think of it as free, $130, or anywhere in-between. And, if you've already got IIS, what motivation is there to spend even more money on a third-party Web server? Not much, and that's the valid point behind the competition's complaint.

What I find absurd about the Microsoft connection limitation is that it attempts to impose on the Internet the PC LAN server model of licensed client access. But it only does it as far as Microsoft can get away with it.

Look at it this way. If you implement Windows NT Workstation as a Web server, you spent $319 on a "server" with 10 Internet "client licenses." If you buy Windows NT Server in the $1,129 configuration, however, you get a similar license, only for 10 LAN clients. But, you can have any number of Internet "users."

You can pay more to add LAN client licenses to Windows NT Server, but there's no such option for Internet access to Windows NT Workstation. That's because the whole idea of having price points for different numbers of Web hits (clients) is patently absurd. And that's another reason Netscape is screaming about the 10-connection limit.

History in the raking

Microsoft's stated reason for the 10-connection limit is that it's good for you. Windows NT Workstation wasn't tested using more connections, and it could crash if you exceed the limit.

Am I the only one for whom this rings a bell? I seem to remember this machine called an IBM PC/AT, and it had an 80286 that ran at 6-MHz. Users discovered they could replace the crystal in the machine and make it run at 8-, 10-, or even 12-MHz.

When IBM did everything it could to discourage this practice (IBM was even accused of rewriting its BIOS to force the machines to run slower if someone replaced the crystal), IBM claimed that it was doing so for our own good. After all, the machines weren't tested at these higher speeds, and could crash.

Of course, everyone knew that IBM simply wanted you to buy their faster, more expensive machines. Nobody I know even questioned that this was the motivation behind the excuses.

The difference between the IBM tactic and Microsoft's, however, is that IBM didn't include a license agreement with the 6-MHz model that forced you to buy an IBM 12-MHz PC if you wanted to run Microsoft Excel, and then bundle IBM's own spreadsheet with the 12-MHz job.

I have no doubt the IBM of yesteryear would have done such a heinous thing if it were possible. But it wasn't. Anyone could buy another brand of PC and happily run Lotus 1-2-3 at 12-MHz for about the same price as IBM's 6-MHz model.

It's not the same with Windows NT. There is no Windows NT clone you can turn to in order to circumvent the anti-competitive practices of Microsoft. I personally prefer Unix for Web servers, and could cite dozens of reasons why it is a superior platform. But, I'll be the first to agree that moving from Windows NT to Unix isn't the same thing as buying another brand of PC.

Who do you serve?

Some may side with Microsoft and claim as a defense that Netscape wants to be in a position where it can leverage its software to squash competition. I don't know if that's true or not. It could be. But, remember this: The law wasn't designed to take people we think may want to be criminals, and throw them into jail. It was designed to convict people who commit crimes.

I'll worry about Netscape's anti-competitive behavior when it's in a position to be anti-competitive. In the meantime, the only crime Netscape and its buddies have committed is that they continue to feed the hand that bites them by supporting Windows NT and not helping drive the industry to an alternative. And, for that, one might argue they deserve the punishment they're experiencing at this very moment.

I'm gullible. Manage my opinions with e-mail to nicholas_petreley@infoworld.com

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Copyright © 1996 by InfoWorld Publishing Company