UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Civil Action No. 98-1232 (TPJ)
STATE OF NEW YORK, ex rel.
Attorney General ELIOT SPITZER,
Civil Action No. 98-1233 (TPJ)
DECLARATION OF ERNEST VON SIMSON
DECLARATION OF ERNEST VON SIMSON
I, ERNEST VON SIMSON declare
- In October 1999, I joined Ostriker, von Simson Inc. and
its operating arm Cassius Advisors, a consultancy assisting large global
enterprises in e-commerce related activities. I also serve on the boards of
directors and advisors of several web product and service providers.
- For the previous 25 years, I was senior partner and
co-founder of the Research Board, a private sector think tank and forum, serving top
Chief Information Officers of over 100 of the largest firms in North
America and Europe. There I directed research on a variety of areas including IT best
practices, advanced technologies and the ever-evolving business models of
suppliers large and small in the computing and communications sectors. The Research
Board's widely acknowledged prestige and influence resulted from the
caliber of the membership, the scale of enterprises represented and the quality and
objectivity of the research. (As one measure of this objectivity, we accepted no
revenues from companies in the computing and communications sectors.) As a
consequence, the Research Board's regular meetings and research processes received
very high levels of cooperation from the CEOs and other top executives of all
the major computing companies including Microsoft as well as Apple, Compaq,
Dell, Hewlett-Packard, IBM, Oracle, SAP, Sun and many others.
- I have examined the remedies proposed by the plaintiffs in the Microsoft
case in the context of my experience. And provided my personal view of
their likely impact on large corporate information technology customers
based on two criteria:
- That the remedies will foster competition and greater innovation
in the technology sector. Such increases in competition and
innovation will have broad benefits for large enterprises.
- That the remedies cause no significant harm or inconvenience to
large business enterprises.
- The structural separation of Microsoft into an operating system company
and an applications/internet company would meet both criteria.
- It would increase competition and innovation. As one
example, I would expect the applications/internet company to make
widely used Microsoft applications like Office available to the users
of non-Microsoft operating systems. The importance of this availability cannot be overstated as Office components like
Word have become de facto document exchange standards for
many very large businesses. The costs of switching to another set of office products would be unacceptably high for most
enterprises. And so the unavailability of Office on other operating
systems has doubtless retarded the acceptance of those operating
systems in the some important business markets.
- Equally, I would expect the Microsoft operating system
to work actively to attract and assist the suppliers of all
applications including those in competition with the
applications/internet company. The innovation brought
increased competition can only benefit businesses large and
- This separation would not cause significant inconvenience
large enterprises, including those that already buy
products on a routine basis.
- In my view, this separation is much preferable to any
separation or conduct remedy suggested by the press and
elsewhere. Specifically, the separation of Microsoft into
operating system companies would cause significant
to large enterprises, in my view. The proposed separation will
not do that. And it is clearly less intrusive and bureaucratic
conduct remedies that require perpetual monitoring and
- Most of the proposed conduct remedies would provide interim
impetus to competition.
- The legal requirements for interfaces that are both open and
disclosed, and for restrictions against discriminatory practices
with OEMs would simply match practices followed voluntarily to
some degree by most of the computer industry for many years. By
ensuring open and complete access to all information necessary to
interoperate with the Microsoft operating systems, they would
assist independent software developers in bringing innovative
products to market on a much more timely and efficient basis.
Thus they would support not harm the interests of large
- Other pro-competition provisions may be less helpful to
large enterprises in the near term (though they could be desirable
in other markets). But fortunately, the proposed remedies leave
large enterprises the choice of either taking the new options or
acquiring a complete Microsoft solution as they do today. In this
realm, are the provisions allowing OEMs to delete Microsoft icons
while substituting their own icons and products; or the provisions
allowing OEMs to introduce their own opening screens. Some
large enterprises will opt not to take advantage of these provisions
for a variety of sound business reasons. But other types of
corporate customers or end-user consumers might choose
differently. The proposed remedies permit all a choice which is
not available today.
I declare under penalty of perjury that the foregoing is true and
correct. Executed in (unreadable) on April 27, 2000
Ernest von Simson
Ernest von Simson is a Senior Partner of Cassius Advisors, a trans Atlantic
consultancy he co-founded with facilities in New York, London and Muenster,
Germany. The firm assists the largest worldwide enterprises deploy non-financial
resources and knowledge assets to become the partners of choice to select
e-commerce providers. Clients include British Petroleum, Daimler-Chrysler, Dow
Chemical, Fedex and JP Morgan.
Mr. von Simson was also the co-founder and senior partner of the Research Board,
a private sector think tank sponsored by the top IT executives from financial
services, retail, transportation and manufacturing. A sampling of service sector
members included ABM/AMRO, Allianz, American Airlines, American Express,
AXA, Bechtel, British Airways, Cigna, Citicorp, Dresdner Bank, Home Depot,
NationsBank, Natwest, Prudential, Schwab, USAA, Wal-mart and Zurich
Mr. von Simson had full responsibility for the research staff and all aspects of
assessing the practical economics of current and upcoming information
technologies. The firm was also expert on the business models and strategies of
technology companies from Microsoft, Sun, Oracle and IBM to the newest group
of B2B e-commerce providers.
Previously, he was Director of Research at the Diebold Group and systems
executive for a large insurance company. He holds a BA from Brown University
and a MBA from New York University. He is on the Boards of Directors of Asera,
Icarian, LinuxCare and Spotwired, and chairs the advisory board of E.piphany. His
articles have been published by Harvard Business Review, Fortune, Leaders,
Computerworld and other publications.