The agreement signed by the State of Israel and the State of Microsoft is ridiculous. Microsoft, Bezeq and NetVision, each of them a monopoly in its field, are the big winners of the walk-over war without struggle over the Israeli Internet and accompanying software market. Israel emerges as a banana republic, whose real rulers are Bill Gates and his emissary Steve Ballmer.
Prime Minister's Office director general Moshe Leon last week signed an agreement with Microsoft associate president Steve Ballmer, according to which every telephone owner in Israel will receive an e-mailbox from NetVision (partner to the agreement), with a Bezeq number (partner to the agreement) instead of a user name, which he will be able to use gratis one hour per month, a considerable amount for personal e-mail needs in Hebrew. All this is accomplished with the aid of Microsoft's mail software. This was the first sin.
The second sin is the distribution to those subscribers of Microsoft's Hebrew-language browser Explorer 4.0 (or a more updated version), through which it will be possible to connect up to the online project "available administration", a favorite of Michael Eitan - whereby services can be obtained via the ministerial offices' Intranet network. What has happened here? It is painfully simple. Microsoft got away with another of its monopolistic marketing activities, only this time, it cast its spell on an entire government and sold it electronic mail for all.
It is unclear who will foot the bill for the deliveries, the printing of instructions for use, customer service, or the several dozen employees who will make their living out of the deal. Probably the Ministries of Communications and Science. And if Microsoft finances the above, the donation will be tax deductible. It will not suffer any loss. Following mass distribution, the whole of Israel will be in the pockets of Bill Gates, Ruth Alon (NetVision) and Ami Arel (Bezeq). Nothing more will ever be heard of Netscape's browser, for example. There will be those who will claim that the company deserves it, since it did not bother to translate its Navigator into Hebrew.
It is astonishing that Israel, supposedly a state upholding the rule of law, can sign an agreement with a commercial foreign company, whose wildest dream is to do the same in every country in the world, without issuing a public tender. What about the Mandatory Tenders Law, Moshe Leon? Who do you think it obligates if not you? Have you heard of the Israeli company NetManage that also has e-mail software in Hebrew, called Chameleon? Perhaps it is not as sophisticated as Bill Gates's program, but, were you to publish a list of requirements for the tender, perhaps it would have met the criteria. We are not talking about multimedia, just electronic mail.
Why, for example should NetVision, an Israeli Internet monopoly, be the electronic mail box supplier, and not Internet Gold, or any other Internet company? Just like that, without a tender, a commercial Internet company is given access to every Israeli household? Who will ever hear of Internet competitors after this?
And as for Bezeq, it finally realized its dream. Internet in every home, and with a Bezeq number. What will Minister of Communications Limor Livnat say to potential Bezeq competitors in the domestic market, which she would like to open up in 1999? Perhaps she will tell them she is sorry, she was simply mesmerized by the name Bill Gates and his billions. Make no mistake, the initial condition for a good market is direct access. Usually a commercial company purchases direct access to customers, through different methods, paying considerably for it. Direct access to an entire country is priceless. It simply does not exist in any marketing theories. Unless it is provided gratis, merely in exchange for a handshake from Steve Ballmer.
Published by Israel's Business Arena April 27, 1998