Three Scenarios For How Microsoft's Open Source Threat Could End
From peace in software to blowing up in Microsoft's face, here's where this brinkmanship could lead.
Microsoft executives are escalating their open source rhetoric, asserting that 235 company patents are being infringed by the Linux operating system, OpenOffice desktop applications, and other open source code.
This time, Microsoft's remarks go well beyond an off-the-cuff comment from CEO Steve Ballmer. General counsel Brad Smith and his deputy for intellectual property and licensing, Horacio Gutierrez, made the assertions in an interview with Fortune magazine, then Microsoft followed up with press releases to underscore its point.
In November, Microsoft struck a two-way deal with Novell that protects Novell's customers from any potential patent claims by Microsoft while giving Microsoft customers patent protection from Novell. Microsoft has made clear since then that other Linux users, especially those of Red Hat, lack protection from any patent claims it might eventually make. Red Hat last week assured customers they could "deploy Red Hat with confidence."
Where does Microsoft take this saga next? Critics note that the company won't say which of its patents are being violated. "The whole, 'We have a list and we're not telling you' itself should tell you something," says Linus Torvalds, Linux's lead developer. Microsoft's ambiguity, Torvalds argues, prevents Linux developers from writing around a violation or disproving a bad claim. In an interview with InformationWeek, Gutierrez contends Microsoft has, in fact, shared details about offending code with some competitors, including Red Hat.
235, count 'em
Photo by Sacha Lecca
Customers, meantime, hate getting pulled into this game. Microsoft is "out to strong-arm other companies," says Eric Simon, VP of IT at Brookfield Homes, a California-based home builder that uses both Windows and Linux. "Shame on Microsoft for trying to squelch innovation," says an IT director who requested anonymity.
Microsoft's not eager to head to court. Company officials say they aren't planning to sue open source customers, who almost certainly would also be its own, though they're not ruling it out. What Microsoft really wants, they say, are cross-licensing agreements with other technology companies of the kind Microsoft struck with Novell. They're using the uncertainty they've created to push negotiations in that direction.
Microsoft, however, must proceed with caution. Implicit in its deal with Novell is the subtlety that Microsoft products may be violating the patents of other technology companies. Says Jim Zemlin, executive director of the Linux Foundation: "Microsoft has to be careful about what it starts because it doesn't know where it will end."
We don't either. But here are three plausible scenarios.
SCENARIO 1: HANDSHAKES ALL AROUND
"This is not a case of some accidental, unknowing infringement," Microsoft's Gutierrez told Fortune.
That's the kind of tough talk that gets others to toe the line. Dell is now a party to the Novell-Microsoft agreement, and Gutierrez says Microsoft has approached Linux users and--surprisingly--gotten some to sign licensing deals. But he won't say which customers, or how many, or how much they're paying.
Here's how the deal making might go: After a show of indignation, backed by a battalion of lawyers and a bottomless war chest, Microsoft slowly convinces more open source providers that they need to pay Microsoft royalties, and convinces more customers that they need to license its technologies, too. Microsoft thumps the law books but doesn't actually take anyone to court, and the agreements are relatively inexpensive, especially for the first companies that sign up. Still, they help Microsoft convince the holdouts it's better to give up a little cash now than risk all-out war later.
As Microsoft impresses the world with the number of companies honoring its patents, it slows migration to open source products. Microsoft, meanwhile, tries to be more like its competitors, delivering more software as services, for example. "The statement on 235 patents buys it time as it works on a viable strategy," says Todd McClelland, an attorney with Alston & Bird, a patent law firm.
As it builds a stable of license partners, Microsoft gains a stake, however small, in the expansion of open source. Through its deal with Novell, Microsoft now gets money from every SUSE Linux license sold. It tries to double, triple, quadruple that.
Microsoft quietly gears up its Open Source Software Lab, headed by Sam Ramji, which ensures that Windows works smoothly with JBoss middleware and other open source code. It accelerates the half steps it had been taking toward open source-like practices in its own development and release cycles. It responds more quickly to user feedback and generates an active, critical, and more open community around its Windows and Office franchises.
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