Subba’s Serendipitous moments

May 21, 2007

Microsoft threatens and then seemingly retracts

Filed under: Business,Competition,Model — Subbaraman Iyer @ 2:17 am

Microsoft clearly made threatening gestures against the entire open source community by making the claim that open source software like Linux violate Microsoft’s patents. It took a very aggressive stance towards open source and wanted royalties. The specific accusation was that the Linux kernel, the GUI, the Open office suite, the email all infringe Microsoft’s patents and hence royalties accrue to Microsoft.

Now, this is where it gets interesting – Will Microsoft sue the Linux distributors, the organizations who use Linux or the FOSS (free and open source software) which essentially is a community of developers? Well, they certainly can’t sue FOSS and Microsoft will find it difficult to get royalties from the Linux distributors like Novell and Red Hat because by virtue of being part of the FOSS, the distributors distribute Linux free and don’t have to pay any patent royalties. Suing the organizations who use Linux would be detrimental to Microsoft’s basic cause.

Clearly Microsoft has been building its patent arsenal for quite some time. Microsoft was emboldened to take this aggressive stance of demanding royalties, because in the recent agreement between Microsoft and Novell, Novell agreed to pay a percentage of  its Linux revenues till 2011, which some view as a tacit admission that Linux did infringe on Microsoft’s patents. What complicates this that Microsoft indirectly sells Novell Linux through a coupon system and hence subject to the GPL licensing policy, though Microsoft claims it is not subject to GPL licensing policy.

This has serious implications for Linux distributors as most users would end up buying their software from Novell itself and hence feel secure against any law suits coming their way. The sales of other smaller distributors and that of Red Hat would suffer.

Will Microsoft sue end users who are Linux users? It looks unlikely at this stage. But, the threat and possibility can’t be ruled out.

In a surprise move, just a couple of days after the Fortune interview, Microsoft representatives in an interview with IDG News service, seem to indicate the Fortune article did not "correctly represent their strategy." The Microsoft representative seem to indicate that it was not a threat issue, but was trying to resolve an intellectual property issue.

It may not come as a surprise, if the Linux and the FOSS supporters make a counter claim against Microsoft for patent violation. Should that happen, we are likely to see a prolonged litigation, which may harm the open source movement.

Clearly tumultuous times are ahead for the Open source movement. As it is many systems integrators are reluctant to propose / include open source software because of the impact it has on its revenue streams. Now, with this threat of law suits and sorting out of patent rights, the systems integrators will avoid open source software till some clarity emerges.

Unfortunately, that clarity may take a long time to emerge.

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