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Chapter 14: Microsoft and Compaq

  1999, March 13th

  Eve walked into the conference room, radiating confidence. She was followed by her new assistant, Anastasia, or Ana for short. She was paid $25/hour and had proven herself useful for a week now.

  Inside the conference room, two men sat. They were the representatives from Microsoft and Compaq.

  The Microsoft representative was a man in his late forties, wearing an expensive suit that screamed corporate lawyer. His name tag read "Richard Morrison - Senior Legal Counsel." Beside him sat a younger man, perhaps early thirties, wearing a Compaq polo shirt under a blazer. "Jack Nelson - VP of OEM Relations, Compaq."

  Eve took her seat at the head of the table. Ana positioned herself slightly behind her. The sunlight streamed through the window, illuminating the room. Eve's smile didn't reach her eyes.

  "Gentlemen," she began. "Thank you for coming to our offices. I understand you have some concerns you'd like to discuss."

  Richard Morrison leaned forward, his fingers steepled. "Ms. Maxi, let me be direct. Microsoft has had a long-standing partnership with Compaq, and we're concerned about the recent... complications."

  "Complication?" Eve's voice remained neutral and level.

  He nodded, "We've heard about your agreement with Dell. We're hearing that Quantum Innovation is approaching other manufacturers with similar OEM partnerships."

  She smiled, her teeth showing, "You're late, Mr. Morrison. We've already struck a deal with Acer, Hewlett-Packard, and IBM. It seems words travel slowly in this business."

  He narrowed his eyes, ignored her last comment, and continued, "Well, Compaq has agreements with Microsoft that include certain exclusivity clauses-"

  She cut in, "Which doesn't prevent them from offering an alternative operating system. Trust me, I've read Microsoft's standard OEM contracts. They're strongly incentivized toward exclusivity, but not legally binding in that regard."

  His smile tightened, "Ms. Maxi, you're very young. Perhaps, you don't fully understand the complexity of these business relationships-"

  At the time, the door burst open, and a man with a long coat walked in. He was William. William looked at the situation, "Oh my, are we in a meeting?"

  Richard stared at him, "Who are you, kid? You don't belong here. We're having a business meeting here."

  William looked at him curiously, like looking at an interesting specimen, "Oh, another old man who thinks they own the world. I'm the CEO. I can stay wherever I want in my own building. And a business meeting? You were discussing her age, weren't you?" He pointed at Eve. "I thought business meetings weren't supposed to be too personal? Perhaps you're forgetting more with your age, old man."

  "You're going too far," Richard said.

  "Am I? Oh, I didn't realise that you were so fragile. I must be dumb. Please forgive me, old man. I didn't realize I went too far," his tone was mocking as he sat down next to Eve, leaning back on the chair. "Mr... Morrison, was it? Look, we've read your standard OEM deals, as Ms. Maxi here had told you before. And there's no legal obligation here for Compaq to only allow one OS on their platform. And frankly, Mr. Morrison, it's embarrassing if you're threatening us with legal pressure after just four months of our company being established. We're very familiar with our legal counsel, who's very familiar with antitrust laws."

  Richard opened his mouth to speak, then thought better of it. His face was red as he gathered his papers. "We'll be in touch," he said as he started to leave.

  William smiled as he looked at Jack, who had a nervous smile, "Now, please. You can continue your discussion with Eve. My job here is done."

  After William walked out, Jack let out a sigh of relief. "Is that really the CEO, Ms. Maxi?"

  She nodded her head, "Yes, Mr. Nelson."

  He sighed again, "I used to be like him. Strong, full of vigor. Unfortunately, age has caught up to me."

  She tilted her head, "I understand, Mr. Nelson. Now, may we resume our negotiation from a week ago?"

  This tale has been unlawfully lifted from Royal Road; report any instances of this story if found elsewhere.

  "Ah, yes. Of course. Is what we discussed last time still on the table?"

  She shook her head, "Unfortunately, we can no longer do $35 per license. It has now gone up to $40/license, due to some internal policy change. I hope you understand." There's no policy change, she thought to herself.

  He sighed sadly, "Of course. We can agree to that. Regarding our distribution deal, Ms. Maxi, we have decided to offer you 15% of our starting line rather than the previous 10%."

  Eve's eyes lit up, though her expression remained neutral, "That's quite generous, Mr. Nelson. May I ask what prompted the increase?"

  Jack slightly leaned back in his chair, more visibly relaxed now that Morrison was gone. "To be frank, Ms. Maxi, we've been running our own tests on the OS. Needless to say, our technical team is very impressed. They said it ran faster than anything they've tested or worked on."

  "I'm glad to hear that," Eve nodded, unsurprised.

  "More than that, we've been watching the market. Your OS went from 20% to 25% in the US market in just the last month. It's quite unbelievable."

  Ana took note behind Eve, her pen moving fast.

  Jack pulled out a folder from his briefcase. "Here's what we're proposing: 15% of our consumer desktop line starts immediately. We're looking at roughly 200,000 units in the first quarter alone. At $40 per license, that's $8 million in guaranteed revenue for Quantum Innovation."

  Eve maintained her composure, though internally she was calculating rapidly. $8 million from Compaq alone. Add Dell, Acer, HP, and IBM... "That's a significant commitment, Mr. Nelson. We appreciate Compaq's confidence in our product."

  "There's more," Jack said, sliding the folder across the table. "We want first-mover advantage in certain markets. Specifically, we're proposing exclusive bundling rights for Quantum OS in the education sector for six months. Schools and universities are a growing market, and frankly, they're frustrated with Microsoft's licensing costs."

  Eve picked up the folder and scanned through it.

  "Ms. Maxi, Compaq didn't get to where we are by putting all our eggs in one basket. Microsoft has been a good partner, but they're getting complacent. Their OEM pricing keeps going up, their support has gotten slower, and frankly, Windows 98 isn't as revolutionary as they claimed it would be, compared to your product."

  Eve nodded and set the folder down. "The education sector exclusivity, six months is reasonable. But we'll need to include a performance clause. If we can't meet demand or if there are significant technical issues, you can open it up to other manufacturers early."

  Jack nodded. "Fair. We'll also want priority technical support for any OEM-specific issues."

  "Agreed. We're already planning to expand our support team." Eve shot a look at Ana and she immediately took a note.

  "There's one more thing," Jack said, his tone becoming more serious. "Microsoft isn't going to take this well. When they find out Compaq is shipping Quantum OS on 15% of our line, they're going to retaliate. Probably with pricing pressure, possibly with delayed access to new Windows versions, maybe even with legal threats."

  "Can you handle that?" Eve asked directly.

  "We can. Compaq is one of the largest PC manufacturers in the world. Microsoft needs us as much as we need them. But I want to make sure you can handle it too. If Microsoft decides to make an example of Quantum Innovation, they have a lot of resources to throw at the problem."

  Eve thought about Richard Morrison's threat, about William's confidence, about the momentum they'd built. "Mr. Nelson, let me be clear. Quantum Innovation isn't going anywhere. We have the product, we have the funding, and we have the will to compete."

  Jack studied her for a moment, then smiled. "You know what? I believe you. Alright, Ms. Maxi, I think we have a deal. I'll have our legal team draw up the formal contracts. Should have them to you by next week."

  "Excellent." Eve stood and extended her hand. "Welcome to the partnership, Mr. Nelson. I think this is going to be very profitable for both of us."

  They shook hands, and Jack gathered his materials. "One last thing. Your CEO. Is he always like that?"

  Eve smiled, "You have no idea. But he's brilliant, and he's right more often than he's not. You'll get used to it."

  "I look forward to working with both of you," Jack said, heading for the door. "I'll show myself out."

  Eve sat in front of William in his office. He was looking through the files and working on streamlining the expenses. "Damn. Your entrance was so good."

  William shrugged, not looking up, "You told me to make my entrance as dramatic as possible and to make my entrance as soon as he makes it personal."

  Eve smiled, showcasing her teeth as she combed her hair with her hand, "What can I say, Will? I'm just a genius at reading people."

  He rolled his eyes, "Whatever you say, Ms. Genius.":

  "Says you. You were ruthless. You didn't even use facts to dismantle him and just mocked him relentlessly."

  "That's kinda the point, no? From what I've observed about him, he seems to be the type to ignore anything factual and feel too emotional. So I just went for the most effective route."

  "Guess that makes sense. How's your musical journey going anyway?"

  "Not great, I would say. I've learned the basics of the guitar, but I can't for my life learn how to compose anything original."

  She shook her head, "That's normal. You've only just started learning instruments a month ago."

  He looked up at her, "That's true, I guess. You still remember how to play the piano, right? Can you teach me?"

  She walked up behind him and hugged him, "Of course, dear."

  He narrowed his eyes, "What made you this lovey-dovey today?"

  She blinked and acted innocent, "I don't understand..."

  His eyes squinted further, almost closing, "Eve..."

  "I may or may not have baked some cookies for you."

  He sighed, "I told you, I'm not eating those godforsaken cookies of yours, Eve."

  "I promise they're different this time!" She whispered into his left ear, "Don't you wanna make me happy?"

  "You're really good at this, huh? You really are good at reading people. I'll humor your cookies one more time, alright?"

  She jumped and kissed him on the cheek, "Thanks, Will. You won't regret it."

  He shot back, "I'm pretty sure I will, but let's see your progress."

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