12319 1 IN THE IOWA DISTRICT COURT FOR POLK COUNTY ----------------------------------------------- 2 JOE COMES; RILEY PAINT, ) 3 INC., an Iowa Corporation;) SKEFFINGTON'S FORMAL ) 4 WEAR OF IOWA, INC., an ) NO. CL82311 Iowa Corporation; and ) 5 PATRICIA ANNE LARSEN; ) ) TRANSCRIPT OF 6 Plaintiffs, ) PROCEEDINGS ) VOLUME XLV 7 vs. ) ) 8 MICROSOFT CORPORATION, ) a Washington Corporation, ) 9 ) Defendant. ) 10 ----------------------------------------------- 11 The above-entitled matter came on for 12 trial before the Honorable Scott D. Rosenberg 13 and a jury commencing at 8:52 a.m., February 6, 14 2007, in Room 302 of the Polk County 15 Courthouse, Des Moines, Iowa. 16 17 18 19 20 HUNEY-VAUGHN COURT REPORTERS, LTD. 21 Suite 307, 604 Locust Street 22 Des Moines, Iowa 50309 23 (515)288-4910 24 25 12320 1 A P P E A R A N C E S 2 Plaintiffs by: ROXANNE BARTON CONLIN 3 Attorney at Law Roxanne Conlin & Associates, PC 4 Suite 600 319 Seventh Street 5 Des Moines, IA 50309 (515) 283-1111 6 MICHAEL R. CASHMAN 7 Attorney at Law Zelle, Hofmann, Voelbel, 8 Mason & Gette, LLP 500 Washington Avenue South 9 Suite 4000 Minneapolis, MN 55415 10 (612) 339-2020 11 KENT WILLIAMS Attorney at Law 12 Williams Law Firm 1632 Homestead Trail 13 Long Lake, MN 55356 (612) 940-4452 14 15 16 17 18 19 20 21 22 23 24 25 12321 1 Defendant by: DAVID B. TULCHIN 2 SHARON L. NELLES Attorneys at Law 3 Sullivan & Cromwell, LLP 125 Broad Street 4 New York, NY 10004-2498 (212) 558-3749 5 KIT A. PIERSON 6 Attorney at Law Heller Ehrman, LLP 7 333 Bush Street San Francisco, CA 94104 8 (415) 772-6000 9 HEIDI B. BRADLEY Attorney at Law 10 Heller Ehrman, LLP 333 South Hope Street 11 Suite 3900 Los Angeles, CA 90071-3043 12 (213) 689-0200 13 DAVID E. JONES Attorney at Law 14 Heller Ehrman, LLP One East Main Street 15 Suite 201 Madison, WI 53703-5118 16 (608) 663-7460 17 BRENT B. GREEN Attorney at Law 18 Duncan, Green, Brown & Langeness, PC 19 Suite 380 400 Locust Street 20 Des Moines, IA 50309 (515) 288-6440 21 22 23 24 25 12322 1 RICHARD J. WALLIS STEVEN J. AESCHBACHER 2 Attorneys at Law Microsoft Corporation 3 One Microsoft Way Redmond, WA 98052 4 (425) 882-8080 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12323 1 (The following record was made in the 2 presence of the jury at 8:52 a.m.) 3 THE COURT: Everyone else may be 4 seated. Thank you. 5 Mr. Edwards, you're still under oath, 6 sir. 7 The Court neglected to rule on Exhibit 8 1324. That is admitted for nonhearsay purpose, 9 I believe. 10 MR. TULCHIN: Your Honor, thank you. 11 THE COURT: 9808, 9807 the Court 12 previously denied. The Court still denies 13 those two. 14 You may proceed. 15 MR. TULCHIN: Thank you, Your Honor. 16 JOHN EDWARDS, 17 recalled as a witness, having been first 18 previously duly sworn, testified as follows: 19 CROSS-EXAMINATION CONT'D 20 BY MR. TULCHIN: 21 Q. Mr. Edwards, good morning. 22 A. Good morning. 23 Q. I think at the end of the day 24 yesterday, we spoke very briefly about 25 Mr. Noorda, and I just want to ask you a few 12324 1 more general questions about the position of 2 chief executive officer, particularly of a 3 software company. 4 Would you agree with me, sir, that the 5 CEO is very important to the success of any 6 company, but particularly in the software 7 field? 8 A. I think it's important to any company. 9 I'm not sure why the software field carries 10 more weight than any other field. 11 Q. Okay. Well, you agree that the CEO is 12 very important? 13 A. I do. 14 Q. Okay. And the job of a chief 15 executive officer is to run the business on a 16 day-to-day basis; correct? 17 A. And I would also say to -- yes, and to 18 coordinate the efforts of those reporting to 19 him who probably have significant input on any 20 of these issues. 21 Q. Would you also say that the CEO's job, 22 in part, is to make strategic decisions for the 23 company? 24 A. Yes. 25 Q. Would you say that it's very often the 12325 1 the case that the CEO, the chief executive 2 officer, will articulate a strategic vision for 3 the company; that is, where the company intends 4 to be going in the next few years? 5 A. I think that that's pretty customary. 6 Q. And is it often the case, sir, that 7 the CEO is the person who communicates that 8 strategic vision to the marketplace? 9 A. I think it depends on the CEO. 10 I think -- I've seen companies, 11 particularly in our industry, where the CEO 12 does that. I've seen those where he or she 13 will delegate that to a spokesperson or to 14 those reporting to him in the organization. 15 Q. All right. The CEO may himself or 16 herself do it, and sometimes that gets 17 delegated? 18 A. Correct. 19 Q. Mr. Noorda, of course, was a 20 well-known person in the software field going 21 back to the early '90s? 22 A. He was. 23 Q. Okay. And would you agree as well, 24 sir, that the success or failure of a company, 25 let's say a company in the software business, 12326 1 can depend in large measure on the skills and 2 performance of the CEO? 3 A. I think it can. 4 Q. Now, yesterday on direct examination, 5 I think you said, Mr. Edwards, that you were 6 talking about the need on occasion to install 7 an operating system onto a PC; correct? 8 Let me back up and see if I can help 9 you. 10 A. I'm not sure of me saying that. Okay. 11 Q. There was some discussion on direct 12 about the retail channel and the fact that 13 DR-DOS was being sold in large measure when you 14 took over in April '92 into the retail channel; 15 correct? 16 A. I think that's accurate. 17 Q. And you talked about the fact for -- 18 that for people buying at retail, it was a big 19 effort to install an operating system onto a 20 PC; correct? 21 A. Okay. Yes, I believe it is. 22 Q. Now, at the time in 1992, Windows was 23 being sold separately from the operating system 24 on which it ran; correct? 25 A. That's correct. 12327 1 Q. So if you wanted, for example -- 2 A. Well, I think that that's correct in 3 the retail channel, but maybe not so much in 4 the OEM channel. I think that they were 5 bundled and tied together more, what I saw in 6 '92 in the OEM channel. 7 Q. Well, is it your testimony that in 8 1992 Windows was bundled with MS-DOS? Is that 9 your testimony? 10 A. In '92? 11 Q. Yeah. 12 A. No. I'm just saying -- I'm saying in 13 '92 it was presented to OEMs as a bundle. You 14 only could get it together and -- 15 Q. Let's stick with the retail channel 16 just for a minute because that's where I 17 thought we were, and maybe my question wasn't 18 clear. 19 A. All right, very good. 20 Q. In the retail channel in 1992, Windows 21 was sold separately from the operating system 22 on which it ran; correct? 23 A. I think that is correct, as I recall. 24 Q. So for a buyer at retail, you'd have 25 to buy a copy of Windows and a copy, let's say, 12328 1 of MS-DOS or DR-DOS; correct? 2 A. Typically, I think you already have 3 MS-DOS because it came on your PC, and so if 4 you are adding Windows, you would buy that and 5 add it to that environment. 6 Q. And that would be another install, 7 another installation? 8 A. Except that Windows -- it would be 9 another install, an installation, but Windows 10 isn't an operating system. So it would be a 11 different kind of install. It was a graphical 12 user add-on. So it would be installed much 13 more like an application. 14 Q. It's still an installation that the 15 user would have to go through? 16 A. I would agree. 17 Q. And as you said yesterday, that's a 18 big effort for most people; correct? 19 A. I think it is. 20 Q. Okay. Now, yesterday as well I think 21 you were talking just a little bit on direct 22 examination about Digital Research's market 23 share in operating systems around the time you 24 took over in that position in April of 1992. 25 Do you remember that? 12329 1 A. I recall it, yes. 2 Q. And you said yesterday that when you 3 took over, your hope -- you weren't sure you 4 could make this, but your hope was to get to 5 about 6 7 to 10 percent of the market; correct? 7 A. Well, I thought that -- yes, I think 8 that is of the overall market. I think we were 9 probably hitting the top 15 software list in 10 the 7 to 10 percent range and growing at the 11 time. That's how I recall it. 12 Q. Well, in fact, wasn't it the case, 13 Mr. Edwards, that at the time in April of 1992, 14 DR-DOS had about 5 to 7 percent of the 15 operating system market? 16 A. That's probably accurate. 17 Q. And that's what you testified at 18 deposition in 1998. 19 Do you remember that, sir? 20 A. I don't recall that, but it seems 21 reasonable and it fits together for me. 22 Q. So I just want to be clear on this. 23 When you took over this business in 24 April '92 at Novell, DR-DOS, as best you 25 remember it, had about 5 to 7 percent of the 12330 1 market, and your hope was to grow that to 2 somewhere in the neighborhood of 7 to 10 3 percent; right? 4 A. That seems right. 5 Q. And MS-DOS had basically the rest of 6 the market; isn't that right? 7 A. Yes, effectively. 8 Q. So even if your hopes had been 9 realized, Microsoft's DOS operating system 10 MS-DOS would still have been the dominant 11 prevalent mainstream operating system in the 12 market? 13 A. I think that would have been -- for 14 the '92, '93 time frame, I think they would 15 have maintained that position. 16 Q. And I think you said yesterday that 17 DR-DOS customers, people who use DR-DOS tended 18 to be techies. 19 Do you remember that? 20 A. Power users, techies, yes. 21 Q. And you used those terms 22 interchangeably I thought yesterday, power 23 users and techies; is that right? 24 A. Got a great memory, yes. 25 Q. Well, I also have the benefit of the 12331 1 transcript. 2 Okay. So the DR-DOS users tended to 3 be techies, and mainstream users, ordinary 4 people who were not versed in technology very 5 well, tended to use Microsoft's MS-DOS; 6 correct? 7 A. I think that's correct. 8 Q. And was it true as well that in 1992, 9 again at the same time, large corporations in 10 America overwhelmingly were using MS-DOS? 11 A. I believe that's correct. 12 Q. And, in fact, DR-DOS had not been able 13 to gain any significant penetration with large 14 companies in our country; correct? 15 A. Well, I think that that's a fair 16 statement. 17 I mean, you know, what is significant? 18 It had penetration. It had presence. But 19 certainly the dominant operating environment 20 was MS-DOS. And I think that's because of the 21 fact that it shipped on the hardware platforms 22 and people had it preinstalled, which is why we 23 wanted to do the same. 24 Q. Is it your testimony that large 25 corporations did not independently buy 12332 1 operating systems? 2 Or maybe to ask the question in a 3 better way, is it your testimony, Mr. Edwards, 4 that at the time large companies acquired their 5 operating systems through OEMs that had 6 preinstalled it, or did they make separate 7 deals with the sellers of operating systems for 8 their own computers? 9 A. It's my view that it was preinstalled, 10 and as a result, they were predisposed to buy 11 that. But they still purchased through other 12 channels. But that the hardware typically had 13 an operating system installed on it. 14 Q. Well, you were aware, were you not, 15 Mr. Edwards, that in 1992 for most large 16 companies, that company would have an IT 17 person, information technology person or some 18 skilled professional who would be employed by 19 that company and who was knowledgeable about 20 computers and also software; correct? 21 A. I would say that in large corporations 22 there was an IT organization. They were 23 typically highly understaffed and buried, but 24 they were there, yes. 25 Q. And Microsoft had salesmen calling on 12333 1 many of these large corporations; correct? 2 A. I assume so, yes. 3 Q. Well, you knew that at the time when 4 you took over, didn't you? 5 A. I think so, yes. I mean, I think that 6 they would have had people calling on those 7 companies for sure. 8 Q. And Microsoft had a large staff of 9 salespeople at the time; correct? 10 A. I don't know the size of their staff. 11 It always seemed large. 12 Q. DRI on the other hand did not? 13 A. DRI did not. It had a larger staff 14 when it joined the Novell team and could 15 benefit from the size of our staff. 16 Q. But isn't it the case, Mr. Edwards, 17 that you recognized in 1992 that in the past 18 DRI had lacked the resources to actively send 19 salespeople out to try to get the business of 20 these big companies? 21 A. What time period are you talking 22 about? 23 Q. Around the time you took over. 24 You recognize that had been the case? 25 A. Sure. They had fewer resources. 12334 1 Q. Okay. And I want to ask you some 2 questions along these same lines focusing on 3 the same period around the time in April 1992, 4 when you took over this business, the DR-DOS 5 business that was now part of Novell. Okay. 6 So that's the time period for these next 7 questions. 8 Is it the case, Mr. Edwards, that at 9 that time you recognized that Microsoft had a 10 number of business advantages as compared to 11 Novell and DRI? 12 A. I would say on the DOS front, they 13 definitely had a number of advantages, and I 14 would say that that's where their strength was. 15 Q. And I should have been clearer. 16 I don't want to make the comparison 17 between Novell's NetWare and Microsoft's 18 competing product, which I think was LAN 19 manager; is that right? 20 A. Uh-huh. 21 Q. I'm making a comparison between the 22 operating system businesses. 23 A. Certainly. 24 Q. DR-DOS and MS-DOS. 25 And one of the advantages that 12335 1 Microsoft had at the time was brand equity. 2 Would you say that's right? 3 A. I think that's correct. 4 Q. Microsoft had a lot of brand equity. 5 Its brand was very well-known among the general 6 public, at corporations, and in fact, 7 throughout the world; correct? 8 A. I think that's accurate. 9 Q. And for Digital Research, that was 10 much, much less the case; correct? 11 A. I think that's fair. 12 Q. Okay. Would it also be fair to say 13 that at the time Microsoft, again thinking 14 about operating systems, had the business 15 advantage of a very good marketing department? 16 A. Yes. They did good as in the ability 17 to sort of control the message in the 18 marketplace. 19 Q. And the marketing department at 20 Microsoft, unlike at Novell and DRI, was not 21 short of resources; correct? 22 A. Well, I think Microsoft had by far 23 more resources than DRI. And if we do 24 comparisons between the operating system 25 groups, as you said, then I would say that that 12336 1 is correct. 2 Q. Okay. Again, at the same time another 3 advantage that Microsoft had was that thousands 4 and thousands of ISVs -- I hope you can hear me 5 over the noise of the radiator. 6 A. We're not taking off, are we? 7 Q. Sorry? 8 A. We're not taking off, are we? 9 Q. No. 10 A. Not launching at this point? Is this 11 a countdown? Should I start -- 12 Q. We're not launching either a product 13 or into outer space, I hope. 14 A. Just felt like a -- 15 Q. This building I think is a hundred 16 years old, so it probably has an older heating 17 system. 18 A. Taking the steam out of the story, 19 right? 20 Q. Yeah. Okay. Good point. 21 So here was my question. 22 Again at the same time, Microsoft had 23 thousands and thousands of ISVs, software 24 companies, that developed applications that 25 worked together closely with Microsoft; 12337 1 correct? 2 A. I think that's correct. 3 Q. And -- 4 A. Whether they liked to or not, they 5 did. 6 Q. They did. 7 And Microsoft had a group of people 8 internally at the company who were called 9 evangelists whose job it was to go out and work 10 together with ISVs to try to convince ISVs to 11 write their software to the Microsoft operating 12 system; correct? 13 A. It makes sense to me. I mean, I 14 wasn't aware of specifically the title 15 evangelist, but of the function, certainly. 16 Q. Leaving aside the title, you agree 17 with me? 18 A. (Witness nods.) 19 Q. Is that a yes? 20 A. I think that there were evangelists in 21 the marketplace. 22 Q. All right. So even with the title. 23 And DR-DOS was developed to be a clone 24 of MS-DOS; correct? 25 A. I'm not sure of the word clone. I 12338 1 think it was developed to run the same set of 2 applications and services and -- I'm not sure 3 exactly what you mean by a strict definition of 4 clone. 5 Q. Well, let me ask you the question sort 6 of this way. 7 If Microsoft was successful in getting 8 ISVs to write their programs to MS-DOS, it was 9 DR-DOS's hope -- sorry, DRI's hope that DR-DOS 10 would have the same APIs, application 11 programming interfaces, and, therefore, these 12 applications written by the thousands of 13 software developers to the Microsoft platform 14 would run on DR-DOS as well; correct? 15 A. I think that's the hope, yes. 16 Q. That was the idea? 17 A. That was the idea. 18 Q. And if the idea was successful, then 19 DR-DOS didn't need to go out and do any 20 evangelizing with ISVs? All that work had been 21 done by Microsoft? 22 A. I don't think that they had to go and 23 get ISVs to write specifically to their API 24 because if they were writing to the open 25 documented and published APIs for Microsoft, 12339 1 they should have been able to run on both 2 environments. 3 I do think that they communicated and 4 evangelized to the ISV group though. 5 Q. Yesterday you testified on direct 6 examination that on the network operating side 7 of Novell, for the NetWare business, Novell had 8 -- and I think at one point you said you got 9 the responsibility for looking after this. 10 Novell had to go out proactively and 11 go after the ISVs, correct, to get them to 12 write their software to NetWare? 13 A. Yes. That didn't start when I took 14 over the group, though. I mean, Novell had 15 always had -- 16 Q. Right. 17 A. -- an ISV organization to -- 18 Q. Sure. 19 A. -- to elicit support and -- of their 20 API. 21 It's a different type of API in the 22 network operating system, but it's the same 23 concept. 24 Q. I understand. 25 But in talking about the business 12340 1 advantages that Microsoft had as of around 2 April of 1992, one of them was that on the 3 operating systems side of the business, 4 Microsoft had been working for years closely 5 with thousands of software developers, 6 companies that developed applications so that 7 their applications would run well on the 8 Microsoft operating system; correct? 9 A. I believe that. 10 Q. Okay. Another advantage that 11 Microsoft had at the time was that Microsoft 12 had Windows; correct? 13 A. Yes. 14 Q. And the jury heard testimony by 15 videotape last Friday from a man named Phil 16 Barrett who was working at the time at 17 RealNetworks and used to work at Microsoft that 18 as of about this time when you were taking over 19 the business at Novell, corporations in droves 20 were flocking to Windows. 21 Do you agree that that was so? 22 A. I don't. 23 Q. Your impression was that American 24 corporations in 1992, how were they reacting to 25 Windows 3.0 and Windows 3.1? 12341 1 A. I think the corporations thought we 2 were fairly buggy products. I think that they 3 were principally still an MS-DOS world. 4 Particularly those in the IT group that you 5 talked about, users might install it, but they 6 often hid it from the IT people who had 7 standards in place and weren't quite flocking 8 to Windows. 9 I think the perception, Microsoft over 10 the market, was that Windows' decision had 11 already been made. 12 The perception I had was that people 13 wanted MS-DOS to hang around quite a bit 14 longer, and Windows at that time offered a 15 graphical user advantage but didn't offer 16 substantially enough advantages given that the 17 investment that all these users had made in 18 applications were principally written on an 19 MS-DOS platform and the investment that the IT 20 people had in the cost of ownership, the 21 network distribution and management software 22 were principally oriented around DOS. 23 Q. Do you have any recollection sitting 24 here today of how many millions of copies of 25 Windows 3.0 had been sold by the time April of 12342 1 '92 rolled around? 2 A. I do not, and I'm not sure that the 3 issue is how many were sold as much as what I 4 thought your question to me is my perception of 5 what corporate America was doing with it. 6 And I think that they were receiving 7 it. They were receiving it bundled on some 8 platforms. They were receiving it in the 9 marketplace. 10 But for the most part, they were 11 concerned about a migration there too quickly 12 because most of their systems at the time were 13 on another platform. 14 I think it's very similar to the 15 mainframe IT guys who were concerned when the 16 LAN or the Apple and PC originally came out. 17 Most of the development was around the in-place 18 applications, and they fought moving to 19 something principally for a GUI. 20 And then you could go to businesses in 21 a marketing department and they already felt 22 they had a graphical user interface because 23 they had the Mac, so -- but I cannot recite to 24 you the number specifically. 25 Q. All right. I guess you disagree with 12343 1 Mr. Barrett on this point. 2 Let me ask you about this. Do you 3 know who Roger Noll is, N-o-l-l? 4 A. I'm not sure of the name. 5 Q. All right. Are you aware that 6 Professor Noll is an expert for the Plaintiffs 7 in this case? 8 A. I'm not. 9 Q. Have you been told that it was 10 Professor Noll's testimony that Windows 3.0, 11 which came out in May of 1990, was a 12 revolutionary technological leap in the 13 marketplace? 14 A. I have not been informed of that. 15 Q. Do you disagree with Professor Noll? 16 A. I would. 17 Q. All right. 18 Well, let's go back to where we were. 19 I asked you whether one of the Microsoft's 20 advantages in the marketplace around April of 21 '92 was whether it had Windows, and you agreed 22 that that was so; correct? 23 A. I believe that an advantage is that 24 they had Windows, yes. 25 And specifically the promise of what 12344 1 Windows would be, that really came about in 2 probably '95. But it was this idea of what it 3 would be and where it would go. 4 I think that they had advantage 5 because it gave them -- if they could tie it to 6 MS-DOS where they were the dominant providers, 7 they could cause the industry to rewrite the 8 applications and services where they already 9 had a head start, and I think that's the 10 fundamental advantage that they had. 11 Q. And I think what you've just talked 12 about, Mr. Edwards, goes back to something we 13 mentioned earlier, strategic vision. 14 This was a vision that had been 15 articulated by Bill Gates and others at 16 Microsoft; correct? 17 A. I believe so, yes. 18 Q. And by April '92 -- 19 A. I'm not sure that they -- excuse me. 20 I'm not sure that they articulated the 21 tying vision or those kinds of things, but the 22 vision in general of where they wanted the 23 market to move, I think that they did 24 articulate a graphical user interface kind of 25 vision. 12345 1 Q. And it was your testimony just a few 2 moments ago that an advantage to Microsoft in 3 1992 was the promise of what Windows would be; 4 correct? 5 A. I think it was. 6 Q. And that was something that you knew 7 about, the marketplace knew about, and that had 8 been articulated clearly by Mr. Gates and 9 others at Microsoft by that time; correct? 10 A. Yeah. I think it had been 11 articulated. I think one could argue whether 12 it was clearly, but it was out there in the 13 marketplace and there were people that were 14 listening to the Windows presentation for sure. 15 Q. Now -- 16 A. Which is precisely why we wanted to 17 have DR-DOS take advantage of it, because if 18 that was the direction that it was going, by 19 allowing us to participate at an OEM level, we 20 could have an opportunity to combine with 21 Windows as well and be a part of the future of 22 the marketplace. 23 Q. But you would agree with me, wouldn't 24 you, Mr. Edwards, that as of 1992 certainly, 25 and even afterwards, Novell did not have on the 12346 1 market a graphical user interface product that 2 could be combined with DR-DOS? 3 A. We did not. That's why we were aiming 4 to support Windows, so that the users could 5 make a choice between their disk operating 6 system, their flavor of DOS, and that it would 7 move forward with the market and with any 8 future graphical user interface that may become 9 the standard. 10 Q. And in 1992, if I understood your 11 testimony yesterday correctly, you were located 12 in Utah; correct? 13 A. Seemed like I was located on a plane. 14 Q. Well, you traveled a lot. 15 A. But I think I was -- 16 Q. But your office was -- 17 A. My home was Delta Airlines. 18 But, yes, my home and residence was in 19 -- '92 is in Utah. 20 Q. You felt like you were living at Delta 21 Airlines a little bit? 22 A. I did. 23 Q. And DRI had its principal software 24 development facility in England, this we talked 25 about it yesterday, the EDC, the European 12347 1 Development Center; correct? 2 A. They had facilities in Monterey and in 3 England, and then, of course, for the next 4 generation of the product, that was being done 5 in Provo. 6 Q. And Monterey was in California, still 7 is? 8 A. It still is. Beautiful place. 9 Q. Okay. I've been there once or twice. 10 And would you say, Mr. Edwards, that 11 it was an advantage to Microsoft in 1992 that 12 its headquarters and its software developers 13 and its strategic business thinkers were all 14 located in the same place in Redmond, 15 Washington, so that they could work together on 16 a daily basis with one another? 17 A. Well, certainly if you bought into the 18 vision of Mr. Gates, it was sort of the 19 information at your fingertips and you could be 20 distributed in any where, but I think that -- I 21 like groups that are in one location for sure. 22 I don't think it though was a 23 disadvantage to Novell necessarily that product 24 groups had a distributed development 25 environment. 12348 1 Q. Well, certainly if someone in Utah or 2 California wanted to speak to a software 3 developer in England, there is, if nothing 4 else, a big time zone issue; correct? 5 A. There is. 6 Q. You're seven or eight hours different? 7 A. There is. 8 Q. So at 10 a.m. in Utah, it would be 9 what, 5 or 6 in England in the afternoon? 10 A. I'll trust your time zone math, but -- 11 Q. Okay. That would make it -- 12 A. And that's why the product group and 13 the planning group for it was principally in 14 Monterey and the coordination of that focused 15 more over there, and then the development group 16 was all together in England around the specific 17 aspects of the operating system core OS. 18 Q. And it's the case, is it not, 19 Mr. Edwards, as well that in 1992 with respect 20 to DR-DOS as compared to MS-DOS, Microsoft had 21 the advantage of in general charging lower 22 prices; isn't that right? 23 A. I am not certain that that is the 24 case. I'm not sure where that's going. They 25 had the advantage of charging lower prices; I 12349 1 don't know. 2 Q. All right. Well, I think later we'll 3 come to some documents on this. 4 But it's also the case, is it not -- 5 A. Just going back to that last question, 6 I mean, there was a time in '92, in the time 7 period you're talking about, where we offered 8 DR-DOS for free with an incremental revenue 9 stream. 10 So, I mean, the issue around these 11 products, certainly price was there, but either 12 business could have made pricing strategies to 13 get the business that they were going to 14 target. 15 Q. In 1992, do you think that the growing 16 popularity of Windows had any impact on the 17 decrease of DR-DOS sales? 18 A. I do. 19 Q. Okay. And it's the case, is it not -- 20 I think you testified to this on direct 21 examination -- that the integration that you 22 directed, the integration of the DRI people 23 into the Novell organization went on for about 24 six months; correct? 25 A. I think that that's accurate. 12350 1 We started the sales force and support 2 groups fairly quickly right after I took over. 3 Q. In April? 4 A. In April. And then there were 5 streamlining from that point on. 6 I think it was front-loaded, though. 7 I think most of it happened in the first part 8 of that six months, but there was trailing 9 integration issues. 10 Q. And by integration, in part what 11 you're talking about is that when you took over 12 this group, you directed that more of the 13 functions of DRI be moved to Utah, correct, 14 where Novell was? 15 A. I directed the people with functional 16 responsibilities to report in to the then 17 Novell functional leader. 18 So, for example, for the attorneys 19 that were associated with DR-DOS, DRI, to 20 report in to David Bradford. For the sales 21 force worldwide, to report in to Joe Marengi 22 and the general sales organization. For the 23 support people to report in to Richard King. 24 I'm not sure by your question if you 25 mean we tried to have them move their physical 12351 1 location as much as we tried to have the 2 reporting function report in to the corporate 3 services leader for that functional area. 4 Q. Let's just separate this a little bit. 5 Some people were asked to move from 6 California to Utah; correct? 7 A. I don't recall any people -- it could 8 be correct. I don't recall any people that 9 were asked to move from California to Utah. 10 Q. Do you recall that some people 11 declined to move and left the company? 12 A. I do not -- 13 Q. Okay. 14 A. -- recall that. 15 Q. And it's the case, is it not, 16 Mr. Edwards, that an integration of two 17 organizations like this sometimes can be a 18 little bumpy? 19 A. Oh, for sure. 20 Q. And that six-month period that you 21 talked about was exactly the same six-month 22 period that your graph depicted when sales were 23 declining; correct? 24 A. It is. It is. 25 Q. During the time that this integration 12352 1 that you had directed was going on? 2 A. That's correct. 3 Q. Do you think that Microsoft had a 4 business advantage during that six-month period 5 because it wasn't going through this kind of 6 disruptive integration program that you had 7 directed for DRI and Novell? 8 A. I'm not aware of their organizational 9 changes during the period. 10 Q. Okay. Well, let me just stop here for 11 a moment, if I could, and try to summarize a 12 little bit of what we've covered in the last 13 half an hour or so. 14 I've been asking you about advantages 15 that Microsoft had in the marketplace as of 16 around April 1992 in the operating system 17 business, and I think you agreed with me that 18 Microsoft had brand equity; right? 19 A. They did have brand equity. 20 Q. Strong marketing? 21 A. They did. 22 Q. They had been working for years with 23 thousands of ISVs that were writing to the 24 Microsoft platform; right? 25 A. I agree. 12353 1 Q. Microsoft had Windows and the promise 2 of what Windows would be? 3 A. I think that's correct. 4 Q. Microsoft had all its people at one 5 location working together in one organization; 6 correct? 7 A. I don't know. 8 Q. Microsoft was not going through some 9 integration program; correct? 10 A. I don't know. 11 Q. And as far as prices, you couldn't 12 quite remember whose prices were higher or 13 lower at the time? 14 A. No -- 15 Q. Fair enough? 16 A. -- you asked me if Microsoft had an 17 advantage to go lower in price, and I'm not 18 sure that is correct or not. 19 Q. Okay. Fair enough. 20 Well, let me ask you about one other 21 advantage. 22 Would you say it was an advantage for 23 Microsoft in April of 1992 to have as its CEO 24 Bill Gates? 25 A. I think so. 12354 1 Q. And when you took over this business 2 in April 1992, you testified in response to 3 some questions from Ms. Conlin -- I think you 4 said almost immediately you went out to 5 Monterey in California and spent at least two 6 weeks there; is that right? 7 A. Yes, I think that's -- that's what I 8 remember. 9 Q. And you spoke to a number of people 10 and reviewed a number of documents in the 11 files; is that correct? 12 A. Documents, plans, a lot of oral 13 presentations from the people, yes. 14 Q. You tried to familiarize yourself with 15 the issues, advantages, problems of the DR-DOS 16 business; correct? 17 A. I did. 18 Q. All right. And one of the first 19 things you did was to change the strategy that 20 Dick Williams had had in place; correct? 21 A. I put more emphasis on the strategy of 22 going after OEMs. I think they had had some of 23 that there, but I emphasized different aspects 24 of the strategy. 25 Q. Right. And that's what I was 12355 1 referring to. 2 The strategy before you took over was 3 focused more on the retail channel, is that 4 fair, and you wanted to change it and direct 5 your energies at the OEM channel? 6 A. I did. 7 Q. Okay. In the course of conducting 8 these reviews of DRI's recent history, did you 9 have occasion to look at, let's say, memos 10 concerning strategy meetings? 11 A. I don't recall specifically, you know, 12 one of those, but I did go down there to 13 unfamiliarize myself with the business, and I'm 14 not sure I can remember it in terms of specific 15 documents that I looked at. 16 MR. TULCHIN: May I approach the 17 witness, Your Honor? 18 THE COURT: You may. 19 Q. Mr. Edwards, I'm handing you Exhibit 20 232, Defendant's 232. 21 And this is a document dated January 22 29, 1991, apparently written by Steve Tucker. 23 Now, let me just pause here for a 24 moment on the organization chart that you used 25 yesterday. 12356 1 MR. TULCHIN: Maybe we can put that on 2 the screen, 210A. 3 Q. Your name is in big letters at the 4 top. This is as of April 1992. 5 And there's a line from you directly 6 down to the Monterey development center, Steve 7 Tucker, VP engineering; right? 8 A. Correct. 9 Q. And Mr. Tucker was, is it fair to say, 10 the person in charge of software engineering at 11 Monterey in California? 12 A. Yes. 13 Q. And he was that in April '92 and had 14 been in that position for some time; correct? 15 A. I believe that to be correct. 16 I don't know -- I don't have a 17 recollection as to when he started, but it 18 seems like he had been there for a while. 19 MR. TULCHIN: We offer Exhibit -- 20 Defendant's Exhibit 232, Your Honor. 21 MS. CONLIN: No objection. 22 THE COURT: It's admitted. 23 Q. Let's look at the first page of this. 24 This is -- the subject says strategy 25 meeting presentation, and it's written by 12357 1 Mr. Tucker, the vice president of engineering. 2 Do you see that, sir? 3 A. I do. 4 Q. Among the people to whom it's written 5 are Mr. Williams, who was your predecessor, 6 correct? He was -- at the time he was running 7 DRI when it was independent; right? 8 A. That's correct, and it's during the 9 first part of his participation with Novell. 10 Q. Well, this is now January of '91 11 before -- 12 A. Well, you just asked me if he was -- 13 Q. Yes, I understand. 14 A. -- running DRI. 15 Q. You're right. 16 A. And I was just adding that yes, he was 17 there after the acquisition for a while too. 18 Q. Fair enough. 19 Now, Mr. Edwards, when you spent this 20 two weeks or so in Monterey as soon as you got 21 appointed to this position, do you recall 22 having seen strategy meeting presentations such 23 as this one? 24 A. I don't recall this specific one, but 25 I saw these kinds of -- saw presentations that 12358 1 would have been similar to this, at least maybe 2 not contentwise. I'm not sure what's here yet, 3 but we did have strategy presentations. 4 Q. All right. Well, I just want to 5 direct your attention first -- there are some 6 things in the document that we'll talk about, 7 but just to the first page initially, if I 8 could. And just to make something clear for 9 everyone. 10 On the front page, it says, please 11 treat the material on Buxton and MS-DOS 5.0 as 12 strictly confidential to Digital Research. 13 Do you see that right on the first 14 page? 15 A. No, I don't. Where is it at? 16 Okay. Well, yes, I do. Sorry. 17 Q. Okay. 18 A. Time for the glasses to come out. 19 Q. Any time you need them, take your 20 time. 21 Just a small question -- 22 A. Is it possible to take a minute to 23 review this document? 24 Q. Of course. Of course, if you need -- 25 A. I'm seeing it here and -- but go 12359 1 ahead. 2 Q. Okay. If you need time, please let me 3 know. 4 Just a small point on this first page. 5 The fact that this material was to be 6 treated as strictly confidential didn't mean, 7 of course, when Novell owned the company that 8 you couldn't see it; on the contrary, you 9 could; right? 10 A. I would -- when I took over the group, 11 I could have seen it. 12 Q. Sure. 13 A. Yes. 14 Q. And I want to turn your attention, if 15 I could, to the page -- the numbers are a 16 little hard to read, these so-called Bates 17 numbers, but it looks like it ends in 88. 18 You'll see the little numbers in the 19 bottom of the page. 20 And the page is entitled DR-DOS 21 business strategy. 22 MS. CONLIN: All the pages are titled 23 that. 24 Q. There is a whole section. Let me try 25 to help you here. 12360 1 A. They're all titled DR-DOS business 2 strategy. 3 Q. It's the eleventh page of the 4 document, and those little production numbers 5 on the bottom, they're hard to read, but I 6 think -- I think it's 8A. Blowing them up 7 doesn't make it easier. 8 MR. TULCHIN: Maybe you could just 9 highlight those, Chris. 10 A. I think I have it. 11 Q. You've got it? 12 A. I don't think highlighting that is -- 13 if that's a number, then, you have better eyes 14 than I do. 15 Q. No, I don't think I do. But anyway. 16 All right. And what I'm directing 17 your attention to here, Mr. Edwards, on this 18 page, here's a memorandum written by Mr. 19 Tucker, correct, in early 1991 in which he says 20 Windows, critical to offer viable alternative 21 to Windows to maintain 386 and above appeal? 22 Do you see that, sir? 23 A. I can. 24 Q. And 386 is a reference to the Intel 25 386 processor; correct? 12361 1 A. I would assume, yes. 2 Q. And above means Intel processors above 3 that like 486? 4 A. I would think that you picked up the 5 lingo. 6 Q. And Mr. Tucker, the vice president of 7 engineering, held this view, did he not, in 8 1991, and even when you spoke to him in '92, 9 that it was critical for Novell/DRI to be able 10 to have a viable alternative to Windows in 11 order to compete with Microsoft? 12 A. I don't think that that was the 13 general belief I heard. I think the belief I 14 heard was that they had taken a look at that 15 early in '91, had dismissed that idea, and the 16 larger focus was to -- and the focus I directed 17 was to integrate and support Windows and 18 leverage that product. 19 Q. Well, I know, and I remember you 20 testifying to that yesterday that your approach 21 was not to try to develop a GUI; correct? 22 A. That's correct. 23 Q. You had a different approach of trying 24 to integrate NetWare with the DR-DOS operating 25 system and put the features of those two 12362 1 products together; correct? 2 A. Well, yeah, but you're -- I think 3 we're mixing ideas there because you're going 4 from how do you get a GUI to talking about 5 networking features. 6 My approach in the GUI front was to 7 support Windows and then to support any other 8 alternative that came in the marketplace from 9 other providers. 10 My approach was not to have Novell or 11 DRI spend resources developing its own GUI. 12 Q. Right. 13 And Mr. Tucker is saying here that he 14 thinks it's critical for DRI at the time to 15 devote resources to develop its own GUI, a 16 strategy that was different than the one you 17 adopted; correct? 18 A. Well, I think he's saying in a year 19 and three months earlier that that was his 20 strategy. 21 If I look at this document, it's July 22 29, 1991, and you're talking about a time frame 23 with me coming in of April of '92. 24 Q. Right. 25 A. So I think what I would assume, since 12363 1 I haven't seen this particular document, is 2 that this was a part of the exploration of the 3 strategy in late '90 and early '91. 4 That's not what I heard in '92. 5 Q. From Mr. Tucker, is that your 6 testimony? 7 A. That's correct. 8 Q. You didn't hear that from Mr. Tucker? 9 A. I do not recall -- remembering hearing 10 from Mr. Tucker that we had to have -- Novell 11 had to buy or had to build a GUI in order to 12 compete in the marketplace. 13 Q. In any event, on this same page, 14 Mr. Tucker, the VP of engineering, says, 15 short-term features which improve performance 16 of Windows and then long-term Cutlass. 17 And Cutlass was DRI's code name for a 18 project to develop its own GUI; correct? 19 A. That's what I understood. I didn't 20 know a lot about Cutlass. 21 As I testified I believe yesterday, 22 when I came there, Phil Balma pulled me aside 23 and wanted to tell me about that name because 24 he still had some of that opinion that there 25 was an issue there, but I wasn't getting that 12364 1 from Mr. Tucker. 2 Q. In any event, the Cutlass project 3 never came to fruition; correct? 4 A. Yeah, I think that the investigation, 5 as I understand it, happened in early '91, and 6 the decision actually was made not to move in 7 that direction but to instead, their decision 8 prior to the time I got there, of support 9 Windows. 10 So this would have been in my thinking 11 views they had in early '91, late '90, but 12 already before I had arrived, their own 13 internal thinking had switched to the 14 importance of supporting Windows. 15 Q. Okay. Let's look next at the page -- 16 these are hard to read. I think it's 317, 17 which might mean that that other one was 308. 18 I hope you can find this, Mr. Edwards. 19 These numbers are a little bit clearer on the 20 lower right. 21 You'll see the production numbers 22 ending with 317. 23 A. I'm sorry. I think I have it. 24 Q. Okay. And when you took over in April 25 1992, do you recall reviewing what DRI had done 12365 1 in 1991 to defend, as this says, against the 2 introduction of MS-DOS 5.0? 3 A. Back to the introduction, I do recall 4 some of that. 5 Our focus was more on a trailing 6 quarter of two and moving forward. 7 I didn't spend a lot of time going 8 back to what strategies existed in '90 and 9 early '91 because to me they would have been 10 strategies that might -- if you had a few 11 minutes it would be good for historical 12 purposes, but this market changes fast and 13 quickly, let's talk about your planning now and 14 in the go-forward period of time. 15 Q. All right, but clearly it's the case, 16 Mr. Edwards, isn't it, that if it's your job to 17 set the strategy going forward, you'd want to 18 know at least a little bit about the basics of 19 what strategies had been used in the prior year 20 or so? 21 A. You may. I don't know that it's that 22 significant. 23 I think what you'd want to do is 24 inventory what the current market factors are 25 and what the strategy should be on a go-forward 12366 1 basis in terms of, you know, how to go off and 2 compete. Historical strategies may or may not 3 be important. 4 Q. Okay. And just looking at the first 5 point, DR-DOS end user pricing of $199 is 6 vulnerable to planned MS-DOS pricing at $79. 7 Did you learn in 1992 that as of early 8 1991 the retail price, the suggested retail 9 price for DR-DOS was $199? 10 A. I don't recall that. 11 Q. Did you learn in 1992 that Microsoft 12 planned to charge $79 retail for MS-DOS? 13 A. I don't recall the pricing of the 14 individual products at the retail level at that 15 time. 16 Q. And let's go to the next page, if we 17 could, and you'll see at the last point on that 18 page, there is a reference to public relations, 19 preannounce DR-DOS 6.0 under nondisclosure, et 20 cetera. 21 When you took over in April '92, were 22 you aware that DRI had preannounced some of its 23 upcoming software programs to get that 24 information out to the market? 25 A. I don't recall. I mean, this says 12367 1 preannounce under nondisclosure strategic 2 direction. So, I mean, I would have assumed 3 that they would have done things like -- I 4 don't recall specifically knowing about this 5 event here that Steve is offering up to the 6 group as a potential strategy. 7 Q. Well, let me just ask you this before 8 I think it's time maybe for our break. 9 It was common in the software industry 10 in the early '90s, was it not, for companies to 11 preannounce their product in some cases long 12 before the product actually shipped in order to 13 get that information out to the market? 14 A. Yes, to preannounce. I would say that 15 part of it is correct. 16 The definition of long -- I mean, what 17 we would typically do is move into a staged 18 rollout of a product. 19 So we might go to very early large 20 customers under nondisclosure and tell them 21 what was coming. Might go to early long lead 22 time analysts and get their feedback, and there 23 would be a rollout plan typically -- 24 Q. Eventually -- 25 A. -- three to four months before maybe 12368 1 a product came out might be standard. 2 Maybe longer if it was going to 3 require the user some form of alteration or 4 change. 5 Q. Okay. Didn't mean to interrupt. 6 Sorry. 7 And we saw a press release yesterday 8 that Novell actually made to the public about a 9 DOS software program that was issued in 1993 10 and said we expect to have the product out this 11 summer. But the product actually didn't ship 12 until next year; correct? 13 A. I think that's correct. 14 MR. TULCHIN: Your Honor, is this a 15 good time for the break? 16 THE COURT: Sure. 17 Remember the admonition previously 18 given. You can leave your notebooks here. 19 We'll be in recess ten minutes. 20 Thank you. 21 (A recess was taken from 9:46 a.m. 22 to 10:03 a.m.) 23 THE COURT: Everyone else may be 24 seated. Thank you. 25 Sir, you're still under oath. 12369 1 MR. TULCHIN: May I approach the 2 witness, Your Honor, at least once he gets 3 seated? 4 THE COURT: You may, as soon as he 5 gets settled there. 6 BY MR. TULCHIN: 7 Q. Mr. Edwards, I'm handing you what has 8 been marked as Defendant's Exhibit 129, and 9 this is a memorandum from John Bromhead. 10 Who was he in 1992? 11 A. John -- I can't remember his exact 12 title, but John is focused in on product 13 strategy, product marketing, sales, that sort 14 of thing, working with the EDC and representing 15 them over there. 16 Q. And he was located in England, in 17 Hungerford, England? 18 A. Yeah, I think John was located for all 19 of the time in England. I'm not sure if he was 20 one that came over to at some point in Monterey 21 or not, but I remember him as being in England. 22 Q. Do you recognize this document as a 23 memorandum written to summarize items discussed 24 and action items from a meeting with you on 25 May 1, 1992? 12370 1 A. Give me just one second to just -- the 2 date is May 5th summarizing May 1st, and I 3 would have been in the organization. And so, 4 yes, I -- I don't remember the specific 5 document, but the topics look familiar. 6 MR. TULCHIN: Your Honor, we offer 7 Defendant's Exhibit 129. 8 MS. CONLIN: No objection. 9 THE COURT: It's admitted. 10 Q. And if we could look at this, 11 Mr. Edwards, right at the top, Mr. Bromhead is 12 writing to a number of people. One of them is 13 John Constant; correct? 14 A. Correct. 15 Q. And others, all at Novell, part of the 16 DRI organization at Novell; correct? 17 A. Correct. 18 Q. And he's writing about a meeting with 19 you on May 1st, 1992; right? If you looked 20 under the -- 21 A. Yes. It says summary of the 1st of 22 May meeting in Hungerford. Please find 23 attached items discussed and actions from the 24 meeting with John Edwards here on Friday, 1st 25 of May. 12371 1 Q. So this was just within a few weeks 2 after you took over your new job? 3 A. Yes. 4 Q. And you had gone to England and you 5 had had a meeting with various people in the 6 organization at Hungerford; correct? 7 A. That is correct. 8 Q. And down the page a little bit, it 9 says, the briefing covered -- is it DSG? 10 A. Desktop systems group structure. 11 Q. The meeting covered desktop systems 12 group strategy and was well received by all 13 attended. 14 And then it says he covered three 15 primary areas for us to focus on. 16 The he there refers to you; correct? 17 A. That seems right. 18 Q. Right. 19 And number one, the first area 20 mentioned is integration strategy, covering 21 management, network APIs and best of breed. 22 Do you see that? 23 A. I do. 24 Q. And then create alternate platforms, 25 peer-to-peer networking as standard in the OS. 12372 1 My question to you, Mr. Edwards, is 2 this: Right from the outset when you took over 3 this job, it was your idea to come up with some 4 integration strategy; correct? 5 A. Yes. 6 Q. And the exact contours of what that 7 strategy would be were the subject of debate 8 that went on as long as you were part of the 9 group; isn't that so? 10 A. I think that we encouraged people to 11 debate it, discuss it, come up with the right 12 eventual actions. And I think it was debated. 13 Q. And you were the head of DSG, the 14 desktop systems group, for about a year and a 15 half; is that correct? 16 A. I think that is. 17 Q. And again, throughout that entire 18 period, this debate internally about the best 19 integration strategy was going on? 20 A. Yeah, but I wouldn't characterize it 21 as the main voice in the group. 22 I mean, I think the memo says it was 23 well received. I think people liked the idea 24 that we could take all of the benefits that 25 DR-DOS had at the time and we could add 12373 1 additional capabilities as a part of a 2 go-forward strategy. 3 And what was debated was not so much 4 did it make sense to do those kinds of things, 5 but we debated what the name of the product 6 should be, how it should be positioned. I 7 think there was less debate about actual 8 contribution. 9 Nobody was debating, as an example, do 10 I want to put network management into the 11 product and thereby lower the cost of ownership 12 for the user. 13 Do I want to make it easier for them 14 to network? Those kinds of things, I think, 15 were generally believed by everyone. 16 What was debated, I think, on and off 17 during the entire period is how do you succeed 18 in the market with that strategy and in 19 particular how do you position it. 20 Q. And, Mr. Edwards, I think yesterday 21 you testified on direct that what you wanted to 22 do was to put networking services into the 23 operating system; is that right? 24 A. I wanted to put -- I think that that's 25 fair. 12374 1 I think I wanted to make it easier for 2 the desktops to integrate and leverage and use 3 the networking environment out there. 4 Q. And was it your idea to bundle, if you 5 will, some of the functionality of NetWare with 6 some of the functionality of DR-DOS? 7 A. Not so much some of the functionality 8 of NetWare itself because that's on the server 9 side, but the access to NetWare's 10 functionality. 11 So you had to put on the desktop, any 12 desktop, whether it was Mac or OS/2 or Windows 13 or DOS, you had to put an access piece of 14 software that would allow it to use those 15 networks. Much like you would have a browser 16 on a desktop today. You had to have some 17 access. But the real functions were coming 18 from the networking operating systems 19 themselves. 20 Q. And did that wind up happening in 21 Novell DOS 7 that was introduced in 1994? 22 A. I believe they did put an ability to 23 get access into NetWare into other 24 environments. There was protocols put in the 25 products so that they could access, for 12375 1 example, LAN manager or NetWare or other 2 back-in networking environments. 3 Q. Was that the first Novell DOS product, 4 Novell DOS 7, that contained that networking 5 feature or features? 6 A. I don't recall if it was the first. 7 I think in -- earlier in -- even in 8 '92, we tried to do some bundling. So I'm not 9 really sure about when the first time was, but 10 it did include -- at least the plan was to 11 include additional networking functionality in 12 the NetWare DOS or Novell DOS. 13 Q. But as you sit here today, you're not 14 sure if that happened prior to '94; is that 15 correct? 16 A. I'm certain that access happened prior 17 to '94, and so what I'm not certain sitting 18 here today is what was the first time it ever 19 happened, which I think was a part of your 20 question. 21 Q. Okay. Now, would you turn to page 2 22 of Exhibit -- Defendant's Exhibit 129. 23 And just at the top, you'll see -- 24 MR. TULCHIN: Let's go down a little 25 bit further, if we could, Chris. 12376 1 There you go. 2 Q. You're shown as being one of the 3 people who attended this meeting; correct? 4 A. Correct. 5 Q. And the memo says, we then went on 6 with a much reduced meeting to cover the 7 following agenda. 8 And I just want to focus for a moment 9 on Item 2, DR-DOS technical support. 10 Can you cast your mind back to around 11 May 1st or so of 1992 and remember what the 12 issues were with DR-DOS technical support? 13 A. I can remember the general flavor of 14 the issues, I believe. Probably not the 15 specifics. 16 Q. Does this refer in any way to support 17 given to customers who phone in with problems 18 that they're experiencing with their software? 19 A. I don't know. Do you want me to read 20 it and see? 21 Q. Well, if you'd like, sure. 22 A. I mean, I'm not sure if it refers to 23 that, so I would say I don't know. 24 Q. Read it if you wish. 25 I'm not sure you're going to find an 12377 1 answer in the document. I'm asking you for 2 your memory. 3 A. Oh, I'm sorry, I thought you said that 4 this document referred to it. Okay. 5 Q. No, I don't think there's more about 6 that particular subject. 7 And then Item 5 is the same issue of 8 integration of DR-DOS -- and maybe the word 9 should be and, a-n-d, instead of a-n -- Netware 10 Lite. Do you see that? 11 A. Correct. 12 Q. And that's part of the same subject 13 that we were discussing how to integrate these 14 two products? 15 A. These two products being what? DR-DOS 16 and Netware Lite? 17 Q. DR-DOS and NetWare Lite. 18 A. Yeah. Well, that's not the same 19 subject as we were talking about before, which 20 is the integration with DR-DOS and NetWare. 21 So Netware Lite was some incremental 22 add-ons that allowed them to do peer-to-peer 23 networking, which was very different than 24 Novell's traditional form of networking. So 25 these would be kind of separate topics. 12378 1 Q. All right. And the integration refers 2 again -- does it refer to bundling in some way? 3 Is that what we're talking about, bundling the 4 features of two different products? 5 A. I don't think that probably refers to 6 bundling. I think it refers to ensuring that 7 the products worked together and that you 8 create an ability for a seamless integration. 9 The term integration referred more to 10 almost like interoperability. Bundling would 11 have a marketing strategy. Probably would have 12 just said bundling. 13 Q. Yesterday you looked on direct 14 examination at Defendant's Exhibit 204, which 15 is in evidence. 16 I don't know if you still have a copy. 17 If it's buried there, I'll bring you another. 18 A. Let me see. And this is? 19 Q. 204. 20 MR. TULCHIN: Your Honor, may I 21 approach? 22 THE COURT: Yes. 23 A. Please just -- I don't think I have a 24 copy of it. 25 Thank you. 12379 1 Q. Ms. Conlin showed you this document, 2 it's dated August 12th, 1993. 3 It was a memorandum written by Toby 4 Corey, C-o-r-e-y. 5 Do you see that? 6 A. I do. 7 Q. And I think you said yesterday that 8 Mr. Corey was in charge of the DR-DOS business; 9 is that right? 10 A. Mr. Corey was in charge of the 11 marketing programs for DR-DOS, but not 12 necessarily the DR-DOS business. 13 Q. Right, marketing for DR-DOS and -- 14 sorry, maybe I misstated it. 15 Okay. And yesterday you looked at the 16 material right at the bottom of the first page 17 that says proposal. 18 And again, this is in August of 1993. 19 The last document we looked at a moment ago was 20 from May of '92; right? 21 A. Yes. 22 Q. That was Exhibit 129? 23 A. Uh-huh. 24 Q. So here in Exhibit 204 we're now more 25 than a year and a half later; correct? 12380 1 A. Yes. 2 Q. And there's still discussion going on, 3 as this memo from Mr. Corey makes clear, about 4 what strategy to adopt. 5 And if you look at the subject of the 6 memo, what strategy to adopt in combining 7 Novell DOS 7 and personal NetWare; correct? 8 A. Yes. 9 Q. That's part of this debate that we've 10 been talking about that was going on throughout 11 the period that you were in charge of DSG? 12 A. Well, part of the debate, but also 13 just a part of the ongoing discussion about 14 these two capabilities and the best way to move 15 them into the marketplace. 16 And I'm sure that that is fairly 17 common for product groups to continually look 18 about how to update their strategy, what to do, 19 where to take the product. 20 I don't think that that's uncommon, 21 but yes -- so I don't know if I would 22 characterize it as part of the debate as well 23 as just simply part of the ongoing planning 24 around how to deal with these two products in 25 the market. 12381 1 Q. Right. And Novell hadn't yet decided 2 how to deal with the two of them; correct? 3 A. Well, what I think what we had done is 4 probably decided a few times and -- 5 Q. Decision kept changing? 6 A. I think that we did change. I think 7 we decided and had a good feel of what we 8 thought. Factors changed and we updated, so I 9 think that it's not an issue of not deciding; I 10 think it's an issue of revisiting the issue 11 several times. 12 Q. And the company changing its mind? 13 A. I think the company did change its 14 mind on these two issues, yes. 15 Q. Is it fair to say, Mr. Edwards, that 16 it's hard to articulate to the marketplace a 17 strategic vision for your software product when 18 the company itself isn't clear what that vision 19 will be? 20 A. I think that that is -- that is 21 difficult to do. 22 Q. All right. Let's look at this memo 23 just under the top subject line. 24 There is an area that says one product 25 versus two. 12382 1 And Mr. Corey, who is in charge of 2 marketing for DR-DOS, writes this memo and he 3 says, after yesterday's meeting with you and 4 the rest of the gang and our telephone 5 conversation this morning, I recommend that we 6 combine DOS and Personal NetWare into one 7 product. 8 Do you see that? 9 A. I do. 10 Q. So there's still discussion about how 11 to handle these products, and Mr. Corey is 12 making this recommendation. 13 And he then goes on to say, my 14 recommendation is based on several critical 15 data points. 16 Then there are a number of bullet 17 points. And the very first is this: Very 18 limited support from sales for a DOS product. 19 Do you see that, sir? 20 A. I do. 21 Q. Now, Mr. Corey, as head of marketing 22 for DR-DOS, surely was aware of the facts with 23 respect to the extent to which sales for a DOS 24 product were being supported by the company; 25 correct? 12383 1 A. I think he would have a viewpoint of 2 that, and I think he would have it from being 3 fairly close to the issues. 4 Q. And, in fact, he puts the word very in 5 italics to emphasize how little support for 6 this product the company is giving; correct? 7 A. I don't know why he italicized very, 8 but -- 9 Q. All right. Fair enough. 10 And then his next bullet point says, 11 the proposed budget is only large enough to 12 support one product successfully. 13 Now, does this go back to what we were 14 talking about yesterday with Mr. Noorda being 15 fairly frugal? 16 A. No. I think this goes back to a 17 difference in viewpoint as to how to compete in 18 this marketplace. 19 Toby came from a perspective of 20 retail, and he wanted to spend significant 21 amounts of money advertising in the 22 marketplace. 23 Some of us wanted to focus a lot more 24 on going after large OEMs and -- because it was 25 a more efficient marketplace and believed that 12384 1 to try to shout over Microsoft's fear and FUD 2 in the marketplace and spend money, there was 3 no company who could match the spending dollars 4 out there, but a better strategy would be to 5 focus in on going to OEMs. 6 So Toby was just in a camp where he 7 wanted to take on the battle in the Microsoft 8 -- and to your point earlier, with limited, 9 relatively limited marketing presence because 10 they had the brand equity. He wanted to attack 11 that brand equity. 12 There was a stronger group, I think, 13 in the company that -- in the executive level 14 who wanted to go after the problem not by 15 spending significantly large amounts of monies 16 that would satisfy Toby in the marketplace, but 17 by obtaining an ability to go into the OEM 18 market and get these solutions preloaded on the 19 desktop. 20 Q. Well, Mr. Edwards, it's true, is it 21 not, that Mr. Corey, Toby Corey had been with 22 Digital Research for some number of years; 23 correct? 24 A. Toby joined Digital Research just 25 right before the acquisition by Novell. 12385 1 So Toby himself was not one who had 2 years of historical understanding of the DRI 3 business. He came in right before the 4 announcement I think in 1991, and he came in to 5 that group. 6 And so he's probably been on the job 7 here less than, for example, John Bromhead for 8 Steve Tucker or -- 9 Q. Well, certainly for a couple of years? 10 A. What's the date? 11 Q. '93. August of '93. 12 A. He probably was, yes. 13 Q. Okay. And his view about the budget 14 is set forth here. 15 Now, going down through some of these 16 bullet points, you go down two more, and Toby 17 Corey says in his memo, Novell is not in the 18 DOS business (Mary has repeated it many times). 19 A. Yes. 20 Q. Do you see that, sir? 21 A. I do. 22 Q. Now a couple of things. 23 Mary, as you understand this memo, 24 refers to Mary Burnside; correct? 25 A. It does. 12386 1 Q. She was in charge of corporate 2 services. Was that her title? 3 A. That sounds like the right title. She 4 was an executive vice president and she was on 5 the executive staff and dealt with the 6 corporate services. 7 Q. Right. She was executive vice 8 president. 9 So were you. She was on the same 10 level, if I can put it that way, as you? 11 A. Yes. 12 Q. So she was a senior person at the 13 company? 14 A. She was. 15 Q. And she had said many times that 16 Novell is not in the DOS business; correct? 17 A. Well, yes, she had said this -- Toby 18 is reporting here that she had said that, and 19 Mary did say that. 20 Q. And you were aware of that at the time 21 in '93? 22 A. Certainly. 23 Q. That one of your peers at Novell had 24 the view that Novell's not in the DOS business 25 at all; correct? 12387 1 A. In '93 I think that's correct. 2 Q. And her view was that Novell's core 3 business that you should be concentrating on 4 was the networking business? 5 A. This phrase we're not in the DOS 6 business was at the heart of this idea are we 7 going to go off and compete with Microsoft 8 head-on as the dominant player in the MS-DOS 9 world as just another DOS supplier or are we 10 going to approach the business leveraging our 11 incremental strengths to provide a better 12 solution. 13 It did not have to do with her trying 14 to communicate that we're not willing to spend 15 monies or to go after the customers we have or 16 to support them or anything like that. 17 It was a phrase used to coin this idea 18 of where you put the emphasis in the 19 positioning of the product. 20 Q. Mr. Corey, in fact, in the next bullet 21 points -- bullet point indicates something I 22 think a little contrary to what you just said. 23 He refers to the lack of executive 24 support. Do you see that? 25 A. I do. 12388 1 Q. Without significant executive support. 2 And what Mr. Corey is sort of doing 3 here in this memo, I think, and tell me if you 4 agree, is saying it's one thing to compete in 5 the market against Microsoft, it's another 6 thing to try to compete when the executives at 7 our own company such as Mary Burnside, who says 8 we're not in the DOS business, won't support 9 us. 10 Isn't that what's going on here? 11 A. You know, I would characterize it 12 differently. 13 I would characterize it that Toby 14 wanted to have much larger budgets for 15 advertising, end caps, positioning at a -- an 16 end user consumer level. And he was not 17 satisfied unless we were going to spend a lot 18 of money that way because that was his 19 orientation. 20 I think that -- this is also in 1993, 21 where I, as far back as the first part of '93, 22 because of being locked -- a feeling that we 23 were locked out by Microsoft of the market had 24 believed that we were going to have to take a 25 different stand than competing head-on in the 12389 1 retail market. 2 So I don't think that it signifies 3 that executives were not supporting Toby. I 4 think it signifies that they had a different 5 solution to the problem and that Toby wanted 6 his solution, which I think happens in 7 companies. 8 Q. And isn't it fair to say that what 9 Toby's saying is that executives don't support 10 the idea of a stand-alone DOS product that 11 Novell will back in the marketplace? 12 A. You know, I think you could draw that 13 conclusion from this statement. I read it a 14 bit differently, but I think you could draw 15 that conclusion as well. 16 Q. All right. Mr. Edwards, I know you 17 said that you spent at least some of the 18 weekend preparing for this testimony with 19 Ms. Conlin, correct, some of the past weekend? 20 A. I don't think I said that, but I did. 21 I don't think anybody's ever asked me that 22 question. 23 Q. Maybe I just guessed it. I thought 24 you had said. 25 In any event, did you talk to David 12390 1 Bradford at any time about testifying for the 2 Plaintiffs in this case? 3 A. David Bradford called me a year ago 4 and told me something was going on and would I 5 be willing to come and talk, but I didn't -- 6 haven't talked to David in six months about 7 this case. 8 Q. Do you have an understanding with the 9 lawyers for the Plaintiffs in this case that 10 you will be paid for your time in connection 11 with your testimony? 12 A. I've understood that they will 13 reimburse my expenses and that they would pay a 14 -- whatever my daily compensation would be for 15 being here. Although I don't have a big 16 understanding of it, I've just assumed that 17 they will pay for that. 18 In other words, I don't have an 19 agreement. I don't have any kind of thing 20 that's been specified specifically other than 21 just simply that. 22 Q. Okay. Let's leave aside the expenses. 23 You have an understanding that you'll 24 be paid for your time in connection with your 25 testimony; correct? 12391 1 A. Yes. 2 Q. At your normal -- what did you say, 3 normal daily rate? 4 A. Normal living -- normal compensation 5 rate. If I spent these two days working in my 6 normal job, then at that factor. 7 Q. And what is that factor? How much is 8 a day -- 9 A. I have no idea because it's never been 10 talked about in monies. And, frankly, that's 11 -- that has nothing whatsoever to do with why 12 I'm here. It was not a motivation or a reason 13 why I'm here. And I really have not -- nobody 14 has communicated to me what that amount is, and 15 I'm not sure that they have any understanding 16 of what it is. 17 Q. Do you have any view in your own mind 18 as to what the appropriate amount would be for 19 a day's worth of your time? 20 A. I do not. 21 Q. Okay. 22 A. I haven't even thought about it. 23 MR. TULCHIN: Sorry. Give me one 24 moment, Your Honor. I'm looking for the next 25 document. 12392 1 May I approach, Your Honor? 2 THE COURT: Yes, you may. 3 Q. Mr. Edwards, I'm handing you 4 Defendant's Exhibit 16. 5 This is again a memorandum. It 6 appears to be written from Mr. Bromhead to you. 7 Do you see this, sir? 8 A. I do. 9 Q. Do you recognize this document? 10 A. Not really, but I believe that it was 11 sent to me. 12 MR. TULCHIN: Defendant Microsoft 13 offers Defendant's Exhibit 16. 14 MS. CONLIN: No objection. 15 THE COURT: Do you have one for the 16 court reporter? 17 MR. TULCHIN: I'm very sorry, Your 18 Honor. 19 THE COURT: It's admitted. 20 Q. You have in front of you, Mr. Edwards, 21 a memorandum -- this is the same Mr. Bromhead 22 we talked about earlier who was located at the 23 EDC in England; correct? 24 A. That is correct. 25 Q. And he writes you this memorandum in 12393 1 August of 1992. 2 Do you see that, sir? 3 A. I do. 4 Q. All right. Now, the memo is entitled 5 DR-DOS myths and facts, although the word myth 6 may have been misspelled. 7 Do you see that? 8 A. Myrths or something. I can't read it. 9 Q. And then going down to the body of the 10 memo, Mr. Bromhead starts off by saying, I'm 11 writing this memo because I am concerned that a 12 valuable part of Novell's technology offering 13 is in danger of being ignored and forgotten 14 about. 15 And is this part of the same subject 16 we've been talking about -- if I can put it 17 this way -- a little bit of uncertainty within 18 the organization as to where DR-DOS is going as 19 a product? 20 A. I think probably John was writing here 21 right towards the time when we were out in that 22 area meeting with OEMs and seeing the -- a 23 difficulty breaking through those OEM accounts 24 because of the dominant position that Microsoft 25 held, and I think John was writing from the 12394 1 heart and wanting us to win this battle. 2 And later on in the document, I notice 3 he suggests that we adopt this network desktop 4 strategy in order to compete in the 5 marketplace. 6 Q. Okay. Well, let's look down a couple 7 paragraphs below. 8 It starts in the early 1988 -- maybe 9 the word early shouldn't be in there -- it's 10 true that DR-DOS was not much more than a 11 simple clone with a few additional features. 12 Was that your understanding as well, 13 that in '88 or so, DR-DOS was really just a 14 simple clone of MS-DOS? 15 A. I didn't have a real good view of what 16 it was in 1988. 17 Q. All right. And going down a few more 18 paragraphs, Mr. Bromhead says, I believe that 19 it is inevitable that DR-DOS in its own right 20 will die away and be replaced with a product 21 with a new focus. Indeed in May of this year, 22 I recommended we consider the name NetWare DOS, 23 et cetera. 24 Do you see that? 25 A. I do. 12395 1 Q. And do you recall around this time in 2 August of '92 again being informed that there 3 were a number of people at Novell, some of them 4 who had been with DRI for some time, who 5 believed that without a GUI, DR-DOS as a 6 stand-alone product would not be able to 7 survive into the future, that it would die 8 away? 9 A. I don't tie the GUI comment to this 10 comment he's making at all. 11 Q. Well, I don't necessarily either. I'm 12 just asking. 13 A. Well, you just followed up with a 14 question right after that so I'm not sure. 15 Q. Let me try again. 16 A. Okay. 17 Q. I see this comment here from 18 Mr. Bromhead. He says, I believe that it is 19 inevitable that DR-DOS in its own right will 20 die away. 21 Do you see that? 22 A. I do. 23 Q. Okay. Now, my independent question 24 separate from this sentence. 25 Do you recall around this time, in 12396 1 August of '92, and maybe before and maybe 2 after, that people at Digital Research and 3 Novell were expressing the view that without a 4 GUI, DR-DOS eventually would die away? 5 A. The dominant positioning and feeling 6 at the time is that without Microsoft 7 integration and support for Windows, we could 8 not make the jump from the DOS world to the 9 future Windows world. 10 And as I've said before, it was not my 11 view that there was a strong belief that we had 12 to independently write a GUI in order to be 13 successful. There were other strategies. And 14 I don't believe that this document is trying to 15 speak to the issue of a GUI. 16 Q. Well, isn't it true, sir, that you 17 testified at some length about the Star Trek 18 program that you were working on with Apple? 19 A. Certainly. 20 Q. And Novell devoted a lot of time and 21 energy and resources to the Star Trek program; 22 correct? 23 A. We spent about three, four months, and 24 the resources we spent were a few, a few 25 coordinating people. 12397 1 The development side of it was 2 actually by Apple. 3 And the view there was to position in 4 the marketplace coming from an alternate source 5 a new GUI. Probably the standard in the market 6 at that time was the Apple system and finder. 7 And it was not -- that is not a position to me 8 that speaks of us writing a GUI or us 9 developing a GUI. It is a position of trying 10 to find alternatives. 11 And that came at a point in time when 12 we felt locked out because of an inability to 13 penetrate the OEM market. 14 Q. Well, wasn't it the case, Mr. Edwards, 15 that the GUI -- this project, this Star Trek 16 project, you were thinking about a GUI that it 17 would operate with DR-DOS; correct? 18 A. That is correct. 19 Q. That was the whole idea of the 20 project. 21 Novell had DR-DOS as its asset, Apple 22 had the Macintosh GUI as its asset? 23 A. Yes. 24 Q. And the two companies were working 25 together to see if they could combine the two 12398 1 and come out with an operating system product 2 that would have the two tied together; correct? 3 A. I think that that is accurate in the 4 sense that the two companies were -- had 5 reached a point -- Novell had reached a point 6 in my mind that we were not going to get a fair 7 and level playing field with respect to 8 Windows. We needed to look at other 9 alternatives in the marketplace. 10 Apple had a graphical user interface 11 and it seemed logical to give it a try, will it 12 work, will it be there. 13 Apple had then the responsibility to 14 go sell it and provide it. 15 That would have left the market with a 16 couple of choices out there provided one by 17 Microsoft, one by Apple. 18 Apple had some resources to move that 19 forward. And either DOS operating system could 20 have been selected. 21 So it would have been a very open 22 environment allowing freedom of choice for the 23 users. That was the intent with the Apple. 24 Q. And when was this going on? Just to 25 set this in time here in -- 12399 1 A. This would have been going on -- I 2 know we had a proof of concept prototype in 3 October of '92, and my guess, six weeks before 4 that maybe -- I'm not certain of the time it 5 started -- would have been the initial kind of 6 conversations. 7 Q. And this memo is August of '92? 8 A. It is. 9 Q. So roughly speaking, it's six or eight 10 weeks before October? 11 A. Yeah. 12 Q. Okay. And, in fact, I think you've 13 testified that you were quite disappointed that 14 that project with Apple never worked out? 15 A. I was. I think it would have been 16 great for the industry. 17 Q. And I think you've testified as well, 18 perhaps yesterday, that it was Apple that 19 backed away and decided it didn't want to go 20 forward with Novell on that project of 21 combining DR-DOS with the Apple GUI, the 22 Macintosh GUI; correct? 23 A. Correct. 24 I think it's helpful to point out that 25 that project was not started by the folks 12400 1 within my group, actually. 2 The project was started, initiated by 3 Darrell Miller and Jack Blount looking at 4 alternate strategies for the company. 5 Our group quickly got involved 6 because, of course, if they were going to put 7 something on DOS, it would require our 8 participation. But I think it was evidence of 9 looking at the thing that we looked at a lot in 10 that marketplace, how to provide a lot of 11 alternatives. 12 Q. And, of course, we'll never know what 13 might have happened in the marketplace if 14 Novell and Apple had combined that way; 15 correct? 16 A. Precisely. 17 Q. I want to go back just very briefly to 18 a subject that you testified about yesterday. 19 And if you need copies of the 20 documents, let me know. 21 A. All right. 22 Q. But I think you'll remember that there 23 was a press release in March of '93 about 24 Novell DOS 7. And it's in evidence as 25 Plaintiffs' Exhibit 9052. 12401 1 MR. TULCHIN: Maybe we can just put 2 this up on the screen. 3 Q. And again the first paragraph -- 4 remember you talked about this press release 5 yesterday, Mr. Edwards? 6 A. I do, yes. 7 Q. If you need another copy, let me know. 8 A. No, I think it's right. I think I've 9 got it right here. 10 Q. Do you have it? 11 A. Uh-huh. 12 Q. And the press release went out in 13 March of '93 now. 14 And it starts out by saying, 15 reflecting the company's commitment to the 16 world's largest installed operating system and 17 the needs of DOS customers for enhanced 18 functionality and better networking support, 19 Novell today announced Novell DOS 7, et cetera. 20 That's the first sentence; right? 21 A. It is. 22 Q. And, in fact, in March of '93, it's 23 correct, is it not, Mr. Edwards, as you've 24 testified at length today, that internally at 25 Novell, Novell wasn't committed to the DR-DOS 12402 1 operating system at all? 2 A. I don't think I've testified at length 3 that Novell was not committed to the DR-DOS 4 operating system at all. 5 I think that I've testified that in 6 fact we were committed to dealing with that 7 product correctly. 8 Q. But you were thinking about combining 9 it with NetWare or Netware Lite, lots of 10 integration, perhaps having only, as Mr. 11 Corey's memo said, having one product out there 12 instead of two, and that product might have 13 been NetWare with the operating system features 14 incorporated into NetWare; correct? 15 A. Those all sound like activities that 16 are in support of DR-DOS, not activities as you 17 characterized as evidence of having no desire 18 to move forward with the DOS business. 19 Q. Well, I don't want to overstate it, so 20 I won't say no. 21 A. Okay. 22 Q. But certainly there was a lot of 23 discussion about what form the operating system 24 product would take going forward and indeed 25 whether you'd have a stand-alone operating 12403 1 system product at all; correct? 2 A. There was discussion about how to 3 position the product in the marketplace. 4 There wasn't an abandonment of 5 supporting the current customers that we had 6 out there or moving the product forward in an 7 appropriate way. 8 It was an issue of positioning. As I 9 think I've said a number of times, how are you 10 going to position it. 11 There were customers in the 12 marketplace that would love if we just said 13 here's your new DOS because that was their 14 orientation. 15 There were customers in the 16 marketplace that would prefer that we say, here 17 is NetWare DOS with an emphasis on I'm a 18 NetWare customer, this is something that's 19 going to extend that capability. It's a 20 positioning battle here. 21 I also think that it's a method 22 battle. 23 Do you go after the marketplace by 24 trying to shout louder than Microsoft in the 25 marketplace from advertising dollars, or do you 12404 1 go after it by trying to get the help of the 2 OEMs? 3 But I think it's really an 4 overstatement to try to say that Novell was not 5 committed to the DOS business. 6 Q. Well, Mr. Edwards, I'm looking at your 7 testimony from yesterday and -- let me just ask 8 you this. 9 Didn't you testify yesterday on direct 10 examination that by the end of 1992, you and 11 others in a group -- as a group had concluded 12 that unless the market changed, we were going 13 to stop proactive involvement in the DOS 14 business? 15 A. I believe that unless something 16 happened, Novell could not succeed without the 17 help of the OEMs in the marketplace. But I 18 think that is a really different concept than, 19 for example, we are going to strand our current 20 customers or not give them an update path. 21 I think it's a statement about whether 22 or not we're going to continue to knock our 23 head against the wall going after the OEM 24 channel if, in fact, we are precluded from 25 succeeding there and -- 12405 1 Q. I hear you, Mr. Edwards, but -- 2 A. -- I don't think that that's possible. 3 Q. I don't mean to interrupt. 4 I hear your testimony, but you did 5 testify yesterday, and you reaffirmed it today, 6 that by the end of '92 you had concluded that 7 unless something was changing drastically in 8 the market, Novell was going to stop proactive 9 involvement or support for DR-DOS? 10 A. I mean, you've got the testimony. 11 Could I just have it read back to me? Because 12 when you say stop proactive involvement, I 13 mean, is that something I'm using and saying? 14 Q. Yes. 15 A. Okay. 16 MR. TULCHIN: May I approach counsel 17 table, Your Honor? 18 THE COURT: You may. 19 Q. I hate to add to your pile of paper. 20 MR. TULCHIN: May I approach the 21 witness, Your Honor? 22 THE COURT: Yes. 23 Q. This is the transcript from yesterday, 24 and it's page -- there are a lot of pages at 25 this trial -- 12180. 12406 1 A. 80? 2 Q. Yes, 12180. 3 MR. TULCHIN: Forgive me. I'm sorry, 4 these clips are flying now. 5 No one was struck. 6 A. I see it there. We are going to stop 7 the proactive involvement in the DOS business. 8 Q. Right. 9 And you say there that that -- you had 10 concluded that by the end of '92. 11 A. By the end of '92. 12 Q. So I just want to go back to my 13 question about this exhibit, Plaintiffs' 14 Exhibit 9052. 15 Despite the conclusion you reached at 16 the end of '92, this press release in March of 17 '93 starts out by saying that what you're doing 18 reflects the company's commitment to the 19 world's largest installed operating system, 20 meaning the DOS operating system; correct? 21 A. Yeah, the MS-DOS users as well as just 22 any DOS users out there. 23 Q. Right. 24 A. So it's our commitment to enhanced 25 functionality and better networking support, 12407 1 and that is exactly what we were trying to 2 provide. 3 Q. All right. I want to go back -- we 4 talked earlier this morning about advantages 5 that Microsoft had in the marketplace, and 6 there's one more that I neglected then to ask 7 you about, and I'd like to ask you now. 8 As of 1992 and 1993, when you were in 9 charge of the desktop systems group at Novell, 10 it was correct, was it not, Mr. Edwards, that 11 Microsoft then had software products to offer 12 the market in the operating system business, 13 the network operating system business? 14 Microsoft also had a number of different 15 applications available and also had a number of 16 different tools, software writing tools 17 available to offer to the marketplace; correct? 18 A. That's correct. 19 Q. And is it fair to say that no other 20 software company at the time, '92 to '93, had a 21 similar range of product offerings that were 22 available? 23 A. I think that that's true. 24 Q. And do you think that was an advantage 25 to Microsoft, for example, with IT managers at 12408 1 large corporations who could sort of engage in 2 one-stop shopping, they go to one company and 3 they can get everything they need? 4 A. I think it's an advantage -- I think 5 it could be viewed as an advantage by them. 6 Q. And was it also an advantage at the 7 time for Microsoft that Microsoft had a suite 8 of business applications on the market called 9 Office? 10 A. I believe so. 11 Q. I mean, it was not until later on 12 beginning in '94 that Novell attempted to get 13 into the spreadsheet business and the word 14 processing business through acquisitions so 15 that it could compete in the suite field; 16 correct? 17 A. Novell's view was to allow the best of 18 class, best of breed software from any company 19 to come together and to interoperate together. 20 Microsoft's strategy was to get people 21 locked into everything from Microsoft. 22 And their actions in the marketplace 23 to me indicated that they wanted you to go to 24 that one-stop shop and not allow the best of 25 breed services to come from an industry from 12409 1 multiple players. 2 But from an IT customer perspective, 3 they definitely had, because of how well we 4 could and others could make them work together, 5 they definitely could get a suite -- a 6 continuous -- actually, a broader set of 7 capabilities at the time by viewing and using 8 what I would call best of breed applications. 9 As an example, WordPerfect or Lotus 10 had superior capabilities in my view and market 11 share to Office at the time. 12 NetWare was an operating system that 13 -- network operating system that, yes, 14 Microsoft had one, but we had one that we felt 15 was better. 16 DOS for Microsoft was their dominant 17 product at the time. 18 You know, I felt like and the company 19 undertook a strategy to allow these best of 20 breed applications to come together and to wo