Microsoft News Tracker

It’s been little known outside the enterprise software market that IBM has been offering variants of open source Open Office desk top software as part of their Lotus Notes email and collaboration package for several years. Today they went a step further in offering them as a free standalone package called Lotus Symphony as IBM’s Ed Brill explains:

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Microsoft CEO Steve Ballmer apparently so liked the hole he was digging with his vague dyspeptic grumblings about Linux infringement on Microsoft patents that he called on the Microsoft legal department to dig the hole deeper as Fortune reported over the weekend. The new chief ditch diggers are Microsoft General Counsel Brad Smith and licensing chief Horacio Gutierrez who are claiming that 235 Microsoft patents are infringed by open source products:

In an interview with Fortune, Microsoft top lawyer Brad Smith alleges that the Linux kernel violates 42 Microsoft patents, while its user interface and other design elements infringe on a further 65. OpenOffice.org is accused of infringing 45, along with 83 more in other free and open-source programs, according to Fortune.

Having fallen into this pit, the next step is inevitably to reveal which 235 patents are being infringed although Microsoft seems to be a bit coy about that (from the Fortune article):

Gutierrez refuses to identify specific patents or explain how they’re being infringed, lest FOSS advocates start filing challenges to them.

The opens source crowd is already rubbing their hands at the prospect. Due to the nature of the patent system which relies on challenge and litigation for clarification and the vagueness of many software patents, I’m sure Microsoft can make a more credible case than the laughable performance by SCO in their Linux copyright lawsuit against IBM, but they run a substantial risk as well.

The real question though is where Microsoft thinks they are going with this. Steve Ballmer’s Big Ditch may be a useful marketing bullet, but I find it hard to believe that Microsoft is going to sue any major customers for using open source programs, because they are almost certainly major Microsoft customers as well. Microsoft could always find some little businesses to pick on, but the publicity from that would be really ugly. About the only thing left is to sue open source software distributors, but now we’re talking a variety of deep pocket companies like IBM, Dell, Sun Microsystems, Hewlett-Packard, Motorola and Oracle who are as equally adept as Microsoft in prosecuting and defending patent lawsuits:

So if Microsoft ever sued Linux distributor Red Hat for patent infringement, for instance, OIN [Open Invention Network of major companies backing open source] might sue Microsoft in retaliation, trying to enjoin distribution of Windows. It’s a cold war, and what keeps the peace is the threat of mutually assured destruction: patent Armageddon - an unending series of suits and countersuits that would hobble the industry and its customers.

Now that would certainly be exciting! I’m chalking this all up to Microsoft marketing FUD unless the Microsoft executive suite has collectively taken leave of their senses.

Some Microsoft news items from last week that did not get a post of their own.

Microsoft competitor VMware is profiled in the NY Times. Uh-oh! Someone just said “Microsoft” and ”bundling.”

Wii outsold PS2 which outsold Xbox 360 which outsold PS3 in January big box retail sales in the US. Think there might be a message from consumers there?

Windows Vista Express Upgrades could finally begin shipping next week:

If you purchased a PC before January 30 and took advantage of the Vista Express Upgrade program, you know by now that this program is everything else but “Express”.

Blu-ray disc sales finally passed HD DVD, but the question is why the attach rate is so low given that Blu-ray players outnumber HD DVD about 5 to 1. Could it be that most Blu-ray players are the Sony PS3?

Details of Exchange 2007 SP1 revealed. Beta coming in April with final release alongside Longhorn server.

Configuration Manager 2007 Beta 2 is now available for public download. It’s the rebranded old favorite, Systems Management Server (SMS). Also, RC1 of System Center Essentials is now publicly available.

Microsoft to launch new consortium aimed at Oracle users on Feb. 26. It’s all about interoperability, I’m sure.

The South African government plans to switch from Microsoft to Open Source. So does Cuba. Meanwhile in the USA, Dell users demand Linux and OpenOffice on PCs via the new Dell company blog.

Microsoft sued over “Office Live” trademark.

And last, but not least: Microsoft offers to take Iowa antitrust jurors to dinner. I wonder if they can pay with vouchers?

Microsoft has raised a media alert for a press conference at 2PM Pacific time where CEO Steve Ballmer will make “an industry announcement.” There are no more official details than that, but the Wall Street Journal is reporting (actual WSJ link here, subscription required) that Microsoft and Novell are entering into a partnership whereby Microsoft will offer sales support for Novell’s SUSE Linux and the two will work on technologies that make it easier for users to run both SUSE Linux and Windows. It sounds to me like a Microsoft Virtual Server deal in the same vein as Microsoft’s agreement with Xensource in July.

Update: The actual deal was rather bigger than I had guessed:

Microsoft Corp. and Novell Inc. today announced a set of broad business and technical collaboration agreements to build, market and support a series of new solutions to make Novell and Microsoft® products work better together. The two companies also announced an agreement to provide each other’s customers with patent coverage for their respective products. These agreements will be in place until at least 2012.

Removing the spectre of Microsoft patent lawsuits is nice for the Open Source crowd and I suppose vice versa, but here’s the fine print:

Under the patent cooperation agreement, both companies will make upfront payments in exchange for a release from any potential liability for use of each other’s patented intellectual property, with a net balancing payment from Microsoft to Novell reflecting the larger applicable volume of Microsoft’s product shipments. Novell will also make running royalty payments based on a percentage of its revenues from open source products.

So at one stroke, Novell gets cash and Microsoft establishes the position that Linux in some way infringes on Microsoft patents. Nice.

But wait, there’s more:

Under the agreement, Novell is establishing clear leadership among Linux platform and open source software providers on interoperability for mixed-source environments. As a result, Microsoft will officially recommend SUSE Linux Enterprise for customers who want Windows and Linux solutions. Additionally, Microsoft will distribute coupons for SUSE Linux Enterprise Server maintenance and support, so that customers can benefit from the use of an interoperable version of Linux with patent coverage as well as the collaborative work between the two companies.

I’m somewhat doubtful that Microsoft salesmen are going to be giving SUSE Linux more than a footnote for sheer personal economic reasons. Could you blame them? The fine print says that Microsoft is purchasing 70,000 coupons from Novell so my take is that this is merely another cash transfusion.

The two companies will create a joint research facility at which Microsoft and Novell technical experts will architect and test new software solutions and work with customers and the community to build and support these technologies. The agreement between Microsoft and Novell focuses on three technical areas that provide important value and choice to the market:

• Virtualization. Virtualization is one of the most important trends in the industry. Customers tell Microsoft that virtualization is one way they can consolidate and more easily manage rapidly growing server workloads and their large set of server applications. Microsoft and Novell will jointly develop a compelling virtualization offering for Linux and Windows.

• Web services for managing physical and virtual servers. Web services and service-oriented architectures continue to be one of the defining ways software companies can deliver greater value to customers. Microsoft and Novell will undertake work to make it easier for customers to manage mixed Windows and SUSE Linux Enterprise environments and to make it easier for customers to federate Microsoft Active Directory® with Novell eDirectory.

• Document format compatibility. Microsoft and Novell have been focusing on ways to improve interoperability between office productivity applications. The two companies will now work together on ways for OpenOffice and Microsoft Office system users to best share documents, and both will take steps to make translators available to improve interoperability between Open XML and OpenDocument formats.

I question how much of a player Novell is in any of these areas where there are already substantial ongoing efforts, but heck, why not share the love? Finally, the press release is replete with encomiums from executives at Intel, AMD, HP, Dell, IBM, and SAP, but it’ll be interesting to see how it plays in the broader Open Source community.

To net it out in one line: Microsoft bought some legitimacy in the heterogeneous environments that predominate in larger businesses while Novell got cash and perhaps a slight advantage in the Linux commercialization business.

Some of the good news is that Microsoft’s business is booming in Russia:

Microsoft says sales in Russia have surged 72 per cent in the year to July as piracy declined and incomes rose, boosting demand for licensed products.
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The national piracy rate fell four percentage points last year, to 83 per cent from 87 per cent of the market, Microsoft says.

Looks like there is plenty of upside potential left.

Also good news is that Microsoft launched the Xbox 360 in India:

Peter Moore, Corporate Vice President, Interactive Entertainment Business, Microsoft Entertainment and Devices Division formally launched of Xbox 360 in India yesterday. Microsoft has chosen Bollywood actor Akshay Kumar and cricketer Yuvraj Singh as the Brand Ambassadors for Xbox 360 in India.

The company also announced ‘Yuvraj Singh International Cricket 2007′, a new gaming title around cricket, which has been created specifically to cater to the tastes of the Indian gaming market. The game, which features Yuvraj Singh, encapsulates the spirit of cricket, and provides gamers a real-life experience of playing for and against the teams of their choice.
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The Xbox 360 will be now available across Microsoft’s 1200 strong retail network across top 7 cities in the country including New Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata and Pune.

I presume the Indian market isn’t expected to be too large, thus the belated announcement.

Now for the bad news - China is readying an antitrust law that seems to be pointed right at Microsoft:

China is drafting an anti-monopoly law that might force companies such as Microsoft to give up leading market shares in the world’s fastest-growing economy.

Under the law, local or overseas companies with more than 50 percent of China’s market share for any product will be investigated.

Those using dominant market positions to set unfair prices will be fined as much as 10 percent of annual sales, according to a draft obtained by Bloomberg News.
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Microsoft’s Windows operating system has more than a 50 percent share of the desktop-computer market in China, according to Edward Yu, chief executive of Beijing-based technology market research firm Analysys International.
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The draft law defines abuse as when products are sold at “unfairly high” prices or bought at “unfairly low” prices, without specifying what constitutes unfair.

Sounds like a license to extort.

And finally, the city government of Munich, Germany started the long promised conversion to Linux:

Munich has begun its migration to Linux on the desktop, a year later than planned and nearly three years since the city announced its move to open source software.

“There have been some delays along the way but we’re now moving steadily ahead,” Florian Schiessl, manager of the Limux project for the city of Munich, said Thursday by telephone.

Since Tuesday, the first 100 of the city’s 14,000 PCs have been switched from Microsoft’s Windows operating system and Office applications to Linux and OpenOffice.

“Today, we’re still working in both the Windows and Linux worlds,” Schiessl said. “But over the next two years, the Linux world will get bigger, while the Windows world will get smaller.”