Microsoft's annual 10-K filing with the SEC has a few lines in it about open source as a competitor that has raised more than a few eyebrows. I'm scarcely surprised, especially since it highlights Microsoft's schizoid behavior over open source.

Most of the attention directed at the report seems to revolve around the following paragraph:

A number of commercial firms compete with us using an open source business model by modifying and then distributing open source software to end users at nominal cost and earning revenue on complementary services and products. These firms do not bear the full costs of research and development for the software. Some of these firms may build upon Microsoft ideas that we provide to them free or at low royalties in connection with our interoperability initiatives.

This graf is in the section entitled "Risk Factors", as advice to potential investors about what real-world conditions may affect the price of Microsoft's stock.

One thing that people single out is the line "These firms do not bear the full costs of research and development for the software", which does sound like it could be read two ways. 1) They're using Microsoft's efforts to get where they are, or 2) The R&D for open source is spread out across a community of developers and contributors, with Microsoft's ideas being one part of that. The vagueness of the language is annoying -- but again, this document is targeted at investors and not programmers. (Small wonder the language is sloppy enough that they describe Mozilla as a competitor -- possibly accurate if you think about how Firefox isn't platform-centric and is in some sense an application framework.)

If there's anything I've learned about Microsoft in the last couple of years, it's that it is quickly turning into two companies. On the inside, you have a great many rank-and-file people who "get" open source, and who want to do positive things with it. On the outside, you have the face the company presents to the industry and its shareholders. I'd gather the latter have a very shaky understanding of open source when they're not actually investing in it -- but with more companies turning to open source as a business model and using it in a sustainable way, I don't expect that attitude to be ... well, sustainable, for lack of a better word.