Thursday, May 17, 2007

Microsoft's Plan to Profit from Open-Source

Our CEO Weighs In-

I've always wondered what the plan in Redmond was to deal with open-source. There is no question that open-source solutions have been cutting into their market share in recent years, and having witnessed Bill Gates' ability to corner markets before, I expected at some point Microsoft would emerge with a strategy to use open-source to their financial benefit. I had no idea they would take the "SCO Group" path of intimidation.

Microsoft knows that you can bully all of the people some of the time, and you can bully some of the people all the time. But evidently they have decided to try and bully all of the people all of the time. For those unfamiliar with the situation, Microsoft has announced that (according to them and them alone) various open-source projects violate 235 of their patents. They want users of the software to pony up by way of licensing agreements with Microsoft, or face the possibility of expensive lawsuits. To be clear, a patent violation does not necessarily mean that someone has swiped Microsoft code somewhere and put it into open-source programs. It generally means that a patented "process" is being used without permission. A process, of course, is a way of doing something. When new ways of doing things on the Internet are discovered, the inventors usually get a patent. After patented their process of serving up ads in search engine results, Google found themselves on the business end of a lawsuit when they launched their own similar process at Google settled the dispute.

What is happening here though is that Microsoft has come to the table with nothing other than words. They have not named any specific infringements, nor pointed to any actual code they feel may be in violation. Linus Torvalds, the creator of Linux, summed this issue up perfectly in a recent article by Charles Babcock of InformationWeek.

"Naming them would make it either clear that Linux isn't infringing at all (which is quite possible, especially if the patents are bad), or would make it possible to avoid infringing by coding around whatever silly thing they claim."

In Babcock's article, Torvalds went on to make an interesting statement about Microsoft, saying
"It's certainly a lot more likely that Microsoft violates patents than Linux does. If the source code for Windows could be subjected to the same critical review that Linux has been, Microsoft would find itself in violation of patents held by other companies."

So Microsoft has decided that they cannot join open-source (and make it profitable) so they are going to try and beat it. Much like with SCO Group, the strategy here is to hope that enough large businesses will determine that it is cheaper to pay Microsoft licensing fees than to fight them, while enough small business become so fearful that they abandon (or avoid) open-source products altogether, sticking with expensive Microsoft "solutions".

As the CEO of a company heavily involved in the use and distribution of open-source software (and the development as well though to a lesser extent), I can say without hesitation that Microsoft has severely underestimated the open-source community. They may get some companies to bite, as SCO Group did, but in the end they will create a new generation of enemies, and the negative buzz surrounding their actions will only help their competitors. Alienating and scaring one's customers is simply not good business practice. It may work for dictators of third world countries where the "customers" are citizens with no ability to fight back. The open-source community, and consumers of software in general, can and will fight back.

Jason Opdyke
CEO- Rokland LLC

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