Even after it was clear that Blu-ray would win the DVD format race, Microsoft continued to stand behind the rival HD DVD.
The software maker may have had many reasons, including the fact that its technology was used by HD DVD, but another reason was that Microsoft had promised HD DVD format backer Toshiba that it would do so as part of its effort to win a patent cross-license deal with the Japanese electronics giant.
That's among the interesting tidbits tucked away in Marshall Phelps' new book, "Burning the Ships," which I wrote about earlier Tuesday. Phelps, a top Microsoft lawyer, and co-author David Kline suggest that Microsoft had already decided to back HD DVD, but that the company redoubled its support as part of its effort to woo Toshiba to become the first big Japanese firm to take a cross-license to Microsoft's patents.
Microsoft lawyer Anne Kelley and her team were trying to get Toshiba to sign a deal in a matter of weeks as opposed to the year or so such an agreement would normally take to hammer out. The HD DVD pledge was only part of Microsoft's effort, which also included sharing some of the future things it was working on that might interest Toshiba.
"Kelley's team also reaffirmed its support for Toshiba in its battle with Sony over DVD formats," Phelps and Kline wrote. "As she put it, 'we let them know that Microsoft would stick with them till the end.'"
The battle between the formats was a high-stakes affair, with Toshiba and Blu-ray proponent Sony each trying to line up backers for their formats. In the computer world, Intel and Microsoft backed HD DVD, while Dell and HP aligned with Blu-ray.
At the same time, winning the deal with Toshiba was key for Microsoft in its efforts to convince large companies, even those with broader patent portfolios, to cross-license Microsoft's technology.
In the second half of 2004, Microsoft struck roughly 20 new deals, including with some big names such as Cisco and Samsung, but the company was having a tough time striking deals with Japanese PC makers.
In February 2005, Microsoft general counsel Brad Smith held a mid-year review meeting in Building 43 on Microsoft's campus, stressing the importance of cracking that market. "I conveyed my concern in the meeting about the lack of progress in Japan," Smith is quoted in the book as saying, "and I started to push Anne and the team pretty hard on how and when we might improve this."
The company decided to focus on winning a deal with one company: Toshiba.
"We did everything we knew how to do to show them that this was a new Microsoft they were dealing with," Kelley says in the book. "We studied Japanese, we went to cultural training and we constantly reminded ourselves that we needed to create a relationship, not just get a deal done."
The strategy ultimately paid off, as Microsoft went on to sign a host of such deals, including with other Japanese firms such as Fuji Xerox, Seiko Epson, and NEC.