IBM Executive Backtracks From Microsoft Accusations

In his third day under cross-examination in the landmark antitrust trial, IBM Corp. executive Garry Norris backed down from his claim that Microsoft Corp. pressured IBM to abandon its competing SmartSuite productivity software and OS/2 personal computer operating system.

Norris, a 17-year IBM veteran who negotiated key software licensing agreements with Microsoft, offered rare insight into the contentious business dealings between the software giant and the world’s largest computer maker. Norris’ story appeared to attract the close attention of presiding Judge Thomas Penfield Jackson, who at several points posed his own questions about the companies’ relationship.

Norris testified Monday that Microsoft had canceled its negotiations with IBM for a new Windows 95 licensing agreement and offered huge financial incentives to get IBM not to compete against Microsoft software. Government lawyers offered his testimony as evidence of illegal anti-competitive practices by Microsoft.

Norris cited a 1995 Microsoft marketing agreement that said the potential discounts would amount to as much as $42 million if IBM were willing to adopt Microsoft’s Windows “as the standard operating system for IBM.”

But Norris acknowledged that the contract did not explicitly require IBM to reduce or stop sales of OS/2 or SmartSuite. And he admitted that IBM ultimately signed a lucrative licensing agreement with Microsoft under which IBM continued to offer its own software on its personal computers along with Windows.

“At the end of the day, IBM got what it wanted from Microsoft,” Microsoft General Counsel William Neukom said outside the courtroom following Norris’ testimony.

The government’s final witness, Princeton computer science professor Edward Felten, will take the stand today in an examination that is expected to last only one day.