Open Source at Microsoft IV
My personal opinion and comments in {orange}. Check the link for full context.
| Part I | Part II | Part III | Part IV |
|---|---|---|---|
Horatio Gutierrez (VP of Intellectual Property and Licensing)
[On the assertion of FLOSS projects infringing no fewer than 235 Microsoft patents.]
This is not a case of some accidental, unknowing infringement. There is an overwhelming number of patents being infringed.
{I love the implication here that FLOSS are intentionally infringing. Like FLOSS developers are gathered around a project road-map with a list of Microsoft patents in one hand and asking each other, “Alright, how can we work in an infringement against this patent here? Think man! We must infringe a patent soon, or the entire project is for naught!”}
It’s important for everyone to understand that there is a real problem with Linux patents and that there is a need for a solution.
If every effort to license proves not to be fruitful, ultimately we have a responsibility to customers that have licenses and to our shareholders to ensure our intellectual property is respected.
Dan Nault
Maintaining Gap vs. Linux
1. Keep network effect with Applications
- Migrate applications to .NET framework
- BUT keep framework proprietary to Windows
- Patents required to implement clone
[...]
- Linux was noted as a big factor; a small share could grow quickly. While we have not seen material Linux clients, we are losing in academic areas, and professors using Linux are entrenched.
[...]
Business Situation – Industry
- We want [Intel] to favor Windows over Linux and they are imprecise there. [...] It was noted that [Intel] are much less Linux focused that 1 year ago, and 2 reasons were given: 1) they were less positively disposed towards us than now; 2) they were playing other hands; there were legal and personality reasons why it was hard to play their hand with us. It was also added that now IBM has them scared and that Linux is double-edged for them relative to us; it could pull us into a closer relationship, or could alienate us.
[...]
Competitive Situation
- Linux was listed first not because of where it is now, but because of where it is going with their engineering inertia. RedmondLinux is a look-and-feel close with installer and it is good; if we stand still they will catch us.
[...]
Maintaining Gap vs. Linux
- The .NET framework contains the latest developer platform for the future, and it must be licensed like Windows. Subsets have gone about as far as they should go in the standards bodies, but we need a compact subset for phones and TVs. It was noted that we have to be careful because once the horses are out, they are out forever. At the right royalty, we can have discussions around technology beyond this.
[...]
- The plan in that images, inks, and still formats will not go to Linux like some of our digital media formats will. This would mean that if someone downloads images, it might violate patents. There was a discussion of a new format where as one takes pictures, the pixel resolution compresses.
[...]
Strategy Axioms Technical Axioms
- Invest in formats/protocols (ensure we are not blocked; gather IP advantage if possible)
- 2005 “Highly Confidential” presentation given to Bill Gates, Steve Ballmer, and others.
{Ah yup, the entire Mono gambit already foreseen and prepared for – and that’s granting Mono is actually trying to compete with Microsoft, and not just straight-up compete for Microsoft.
Microsoft was (and is) clearly aware of exactly what standardizing C# and the CLR meant, and exactly how much of a danger it would be to Microsoft (not at all), how useful it would be (very), and how to later leverage it against Linux. }
Orlando Ayala (Senior VP, Emerging Markets)
[On the so-called Education and Government Incentives Program - basically a slush fund to bribe decision makers.]
Bottom line do our best to show the great value of our software to these customers and ensure we get paid for it under no circumstances lose against Linux before ensuring we have used this program actively and in a smart way. [Emphasis in original]
[...]
- We can not and will not compete with Linux/StarOffice and other open source providers solely on price, however the price allure of ‘free’ must be addressed as part of competitive response, including where necessary matching competitive offers.
[...]
Anatomy of a Deal
Name: Girls Schools in Saudi Arabia
Desktops: 20,000 (1200+ servers)
Revenue: $4MM (50% OEM)
Competitor: Linux/StarOffice
Product Mix: Windows2000 Server, Windows 2000/XP Pro, Office XP Pro, Front Page 2002, VB 6.0
Microsoft Investments to win:
- Create special package including media and guidance
- Highlight customer accomplishments (shared PR)
- Commitment to invest in E-Ministry ($450,000)
- SE and two admin for a year (Contingent Staff)
- Train 220 FTE’s on Office Tools
- Initial implementation services
- Minimal application development
Story: The local team created a special 3 CD kit that included CD’s for Tools, Teachers and Students with appropriate content and products. They also agreed to fund a special ministry of education training pilot. This investment ($450k) was funded through the additional margin on the per desktop price.
{One thing I like here is another example of putting the lie to the TCO argument: Microsoft loves to argue one reason Linux is “more expensive” is because of training costs. But here, they roll in a big old training program and even some full-time staffing to make the deal happen.}
Brad Smith (Senior Vice President and General Counsel)
Today Novell is the only company in our industry that is able to provide a customer not only with the code to run Linux, not only the service and support for it, but the patent, a patent covenant that runs for Microsoft Corporation, and that we think is very important, again, as you heard from Ron [Hovsepian, Novell CEO and President], for all of the customers in the industry.
There is, of course, a little bit of economics involved, as they always are, and you’ll see in the press release some references to this, although you’ll also see that we’re not announcing any numbers today. But, as you’ll see in the press release it makes clear that on the patent side, we dealt with both of these sides of the equation. We dealt with the need for an up-front balancing payment, a balancing payment that runs from Microsoft to Novell, reflecting among other things the large relevant volume of the products that we have shipped. And you’ll see, as well, an economic commitment from Novell to Microsoft that involves a running royalty, a percentage of revenue on open source software shipped under the agreement.
[In this article, Brad Smith asserts that Linux and other FLOSS projects infringe on no fewer than 235 Microsoft patents.]
The only real solution that [the free-software] folks have to offer is that they first burn down the bridge, and then they burn down the patent system. That to me is not a goal that’s likely to be achieved, and not a goal that should be achieved.
