Microsoft at the power point [why Linux is slandered at FR]

The Economist ^ | 13 September 2003 | Economist staff

[chilepepper]

Governments like open-source software, but Microsoft does not

IN MAY, the city of Munich decided to oust Microsoft Windows from the 14,000 computers used by local-government employees in favour of Linux, an open-source operating system. Although the contract was worth a modest $35m, Microsoft's chief executive, Steve Ballmer, interrupted his holiday in Switzerland to visit Munich and lobby the mayor. Microsoft even dropped its prices to match Linux—a remarkable feat since Linux is essentially free and users merely purchase support services alongside it. But the software giant still lost. City officials said the decision was a matter of principle: the municipality wanted to control its technological destiny. It did not wish to place the functioning of government in the hands of a commercial vendor with proprietary standards which is accountable to shareholders rather than to citizens.

Worryingly for Microsoft, Munich is not alone in holding that view. Across the globe, governments are turning to open-source software which, unlike proprietary software, allows users to inspect, modify and freely redistribute its underlying programming instructions. Scores of national and state governments have drafted legislation calling for open-source software to be given preferential treatment in procurement. Brazil, for instance, is preparing to recommend that all its government agencies and state enterprises buy open source.

Other countries are funding open-source software initiatives outright. China has been working on a local version of Linux for years, on the grounds of national self-sufficiency, security and to avoid being too dependent on a single foreign supplier. Politicians in India have called on its vast army of programmers to develop open-source products for the same reasons. This month, Japan said it would collaborate with China and South Korea to develop open-source alternatives to Microsoft's software. Japan has already allocated ¥1 billion ($9m) to the project.

Why all the fuss? Modern governments generate a vast number of digital files. From birth certificates and tax returns to criminal DNA records, the documents must be retrievable in perpetuity. So governments are reluctant to store official records in the proprietary formats of commercial-software vendors. This concern will only increase as e-government services, such as filing a tax return or applying for a driving licence online, gain momentum. In Microsoft's case, security flaws in its software, such as those exploited by the recent Blaster and SoBig viruses, are also a cause of increasing concern.

Government purchases of software totalled almost $17 billion globally in 2002, and the figure is expected to grow by about 9% a year for the next five years, according to IDC, a market-research firm (see chart). Microsoft controls a relatively small part of this market, with sales to governments estimated at around $2.8 billion. But it is a crucial market, because when a government opts for a particular technology, the citizens and businesses that deal with it often have to fall into line. (In one notable example, America's defence department adopted the internet protocol as its networking standard, forcing contractors to use it, which in turn created a large market for internet-compliant products.) No wonder Microsoft feels threatened—the marriage of open-source software and government could be its Achilles heel.

Policymakers like open source for many reasons. In theory, the software's transparency increases security because “backdoors” used by hackers can be exposed and programmers can root out bugs from the code. The software can also be tailored to the user's specific needs, and upgrades happen at a pace chosen by the user, not the vendor. The open-source model of openness and collaboration has produced some excellent software that is every bit the equal of commercial, closed-source products. And, of course, there is no risk of being locked in to a single vendor.

That said, open-source is no panacea, and there are many areas where proprietary products are still far superior. Oracle, the world's second-largest software company, need not worry (yet) about governments switching to open-source alternatives to its database software. But Microsoft is vulnerable, because an open-source rival to its Windows operating system exists already, in the form of Linux.

If Microsoft is indeed squeezed out of the government sector by open-source software, three groups stand to benefit: large consultancy firms and systems integrators, such as IBM, which will be called in to devise and install alternative products; firms such as Red Hat or SuSE, which sell Linux-based products and services; and numerous small, local technology firms that can tailor open-source products for governmental users.

As a result, the company has been fighting back. Microsoft and its allies have sought to discredit open-source software, likening its challenge of proprietary ownership to communism and suggesting that its openness makes it insecure and therefore vulnerable to terrorism. The firm also created a controversial slush fund to allow it to offer deep discounts to ensure that it did not lose government sales to Linux on the basis of price. And Microsoft has paid for a series of studies, the latest of which appeared this week, which invariably find that, in specific applications, Windows costs less than Linux.

More strikingly, Microsoft has been imitating the ways of the open-source “community”. Last year, the firm launched a “shared source” initiative that allows certain approved governments and large corporate clients to gain access to most of the Windows software code, though not to modify it. This is intended, in part, to assuage the fears of foreign governments that Windows might contain secret security backdoors. Microsoft has also made available some portions of the source code of Windows CE, which runs on handheld PCs and mobile phones, to enable programmers to tinker with the code. Tellingly, this is a market where the company is a straggler rather than a leader.

Jason Matusow, Microsoft's shared-source manager, says that developing software requires leadership and an understanding of customer needs—both areas where proprietary-software companies excel. As for proposed legislation that would stipulate one type of software over another, it is anti-competitive and could leave users hamstrung with products that are not the best for their specific needs, says Robert Kramer, executive director of the Initiative for Software Choice, a Microsoft-supported lobby group. Microsoft will advance these views next week in Rome, where it is hosting the latest in a series of conferences for government leaders. But the signs are that many of them have already made up their minds.

[Salo]

You must not hit the tech threads that often. Debate is usually quite robust: the MS guys haven't shown up in force yet. I think the bickering and fighting that takes place is generally a good thing: you learn more. At the point where people begin refering to each other as communists or playing Martyr is when it gets pointless.

As far as the os that government pants after not being a good thing, the dept of homeland security just got spread-golden-eagled over their desks for MS, so you might not be far off. ;-)

From the looks of nearly all the posts on this thread, LINUX is WORSHIPPED on FR, NOT slandered. For my part, any OS that GOVERNMENTS pant after can't be all good.

[irv]

I simply know some industrical organization and economics of R&D.

I never said Open Source is the only way to make new stuff. I said it's a way that has worked. Maybe that doesn't fit into your economics, but some of us find it quite useful and even profitable.

Forget these little theories you "know." Reality matters more.

[PokeyJoe]

This is because private ownership stimulates innovation. Undertaking a new enterprise is risky, and the only compensation for an increased risk is higher reward. Remove that possibility --- and there is no reason to take risk; no reason to develope new products.

from this qoute . . .

to the point . . .

Linux is already available in 64bit versions (not XP), that Linux already has clustering capability (not XP), that Linux has a choice of over 4 desktops (not XP), that Linux can read HPFS, NTFS, FAT, UFS, DFS, and has a working version of a filesystem driven database-style transactional updates (not XP), and I could go on . . .

Innovation requires the FREEDOM to innovate.

[Nick Danger]

What also had in mind is that, placed in the public domain...

This was a thread about linux and Microsoft. What does the concept of public domain have to do with either of those things? Why would you introduce that concept into this thread?

[general_re]

Huh?

Linux is already available in 64bit versions (not XP)

What's this?

Linux already has clustering capability (not XP)

Clustering has been available since NT 4.

that Linux has a choice of over 4 desktops (not XP)

Huh? I can think of a half-dozen drop in replacements for Windows Explorer off the top of my head. Here's one. Here's another one.

that Linux can read HPFS, NTFS, FAT, UFS, DFS

Just don't think you can write to an NTFS partition under Linux. Anyway, you can get drop-ins to read (and write) all of those under Windows, plus ext2, ext3, and a lot more.

and has a working version of a filesystem driven database-style transactional updates (not XP)

Not ready for prime-time. So does the next version of NTFS. If you want production-ready, BeOS had one five years ago.

Nothing wrong with preferring Linux over Windows, but it's usually wise to be aware of the actual facts first...

[PokeyJoe]

But I get it all for FREE with Linux dood.

[general_re]

If that's the point you wanted to make, you should have made that point ;)

[Southack]

"IN MAY, the city of Munich decided to oust Microsoft Windows from the 14,000 computers used by local-government employees in favour of Linux, an open-source operating system."

One of the ways that MicroSoft could handle this sort of situation is to begin releasing its code for the versions of its OS's that it no longer supports.

Consider: Windows 95, 98, and NT 4 are no longer officially supported. MicroSoft is no longer selling those OS's, yet MicroSoft still has the source code for all of the above.

So why not earn REVENUE, marketshare, and goodwill from that source code?! Windows 95 could become Open Sourced.

MS Windows 95 code could easily be placed online. Let anyone use it for free. Volunteer teams could readily be assembled, especially with MicroSoft's corporate direction and guidance, and open source versions of Windows 95 could begin being developed out in the wild.

Such releases could be free for everyone, with the caveat that reselling such new releases would have to cut MicroSoft in on 15% of the gross. For developers who don't resell such new enhancements but rather instead use them internally, there would be no cost.

Poof! In one easy step MicroSoft would own the open source market, would gain goodwill, would add a new revenue stream for obsolete software code that they aren't even supporting, and could win back customers such as Munich as well as stop new defections to Linux.

It would be tough to argue against open source MicroSoft, after all!

This move would also have the effect of dampening MicroSoft's current over-enthusiasm for obsoleting (i.e. ceasing corporate sales and support) their releases quite so fast. Bean counters in Redmond would push to extend corporate support (a needed action) rather than see perfectly good proprietary software on the open source fast-track.

Moreover, MicroSoft would have a new pool of code to dip into for innovations. Naturally MicroSoft would retain the rights to use any enhancements made by open source groups to its code, so when the occassional gem comes along MicroSoft will get to incorporate that new code for free into its new systems.

The alternative, of course, is to continue to lose market share to open source projects from competitors, as well as to continue to lose any benefit from their old, retired software code in their unsupported and now obsoleted software (e.g. Windows 95).

[Bush2000]

One of the ways that MicroSoft could handle this sort of situation is to begin releasing its code for the versions of its OS's that it no longer supports. Consider: Windows 95, 98, and NT 4 are no longer officially supported. MicroSoft is no longer selling those OS's, yet MicroSoft still has the source code for all of the above. So why not earn REVENUE, marketshare, and goodwill from that source code?! Windows 95 could become Open Sourced. MS Windows 95 code could easily be placed online. Let anyone use it for free. Volunteer teams could readily be assembled, especially with MicroSoft's corporate direction and guidance, and open source versions of Windows 95 could begin being developed out in the wild. Such releases could be free for everyone, with the caveat that reselling such new releases would have to cut MicroSoft in on 15% of the gross. For developers who don't resell such new enhancements but rather instead use them internally, there would be no cost. Poof! In one easy step MicroSoft would own the open source market, would gain goodwill, would add a new revenue stream for obsolete software code that they aren't even supporting, and could win back customers such as Munich as well as stop new defections to Linux.

That's a bit naive. First, Microsoft isn't a charity. It isn't practical for MS to support old software forever -- just as it isn't practical for RedHat to support Linux versions forever. Second, if Microsoft were to release Windows 95 under an open source model, it wouldn't own anything other than a pretty useless copyright. That's the whole point of the OSS model: It belongs to everyone. Third, there would be no enforcement mechanism for collecting revenues gained under this new model You're suggesting that MS become a shareware-like company. That isn't realistic. Fourth, the Windows 95 codebase is dead. Microsoft moved away from that code after Windows 98 SE, when it built Windows XP on top of Windows 2000. So, frankly, nobody would want to build on top of Win9x, anyway.

[Southack]

"So, frankly, nobody would want to build on top of Win9x, anyway."

No, there are large numbers of players who would love to be able to have that source code, along with the rights to develop, enhance, and use. Most shelfware and large amounts of proprietary code still runs on Windows 95, you know.

Besides, if nobody wants it, what does MicroSoft have to lose? Make it Open Source.

At the very least MicroSoft can gain goodwill and have an irrefutable talking point for the Linux crowd; i.e. that anyone can develop on Windows 95 because we've just made it an Open Source code base.

And if some developer comes up with some outstanding enhancement or niche market for resale, then MicroSoft is going to get 15% of the profits (read: a **new** revenue stream).

Corporate goodwill, free development, and a new revenue stream all from software code that you freely admit is "dead."

How can you beat that tri-fecta?!

[Southack]

"Second, if Microsoft were to release Windows 95 under an open source model, it wouldn't own anything other than a pretty useless copyright. That's the whole point of the OSS model: It belongs to everyone."

There's no downside. Windows 95 is already dead, so MicroSoft's copyright on that code is essentially useless already.

So why not allow an Open Source community to rally around that Windows 95 code base rather than Linux?!

My firm would take up the charge in a heartbeat, for instance. We'd love to be able to tell our clients that **we** could supply them with a Windows-compatible OS that we would be willing to support for them for as long as they desired.

Hell Yes we'd love to lock our clients into our proprietary version of Windows 95-on-steroids!

[Southack]

"Third, there would be no enforcement mechanism for collecting revenues gained under this new model You're suggesting that MS become a shareware-like company. That isn't realistic."

No, I'm suggesting that some money coming in from currently dead code is more profitable to MicroSoft than would be no money coming in.

Large commercial resellers of Open Source Windows 95+ systems would clearly pay MicroSoft a percentage of the gross rather than face lawsuits or jail.

What I'm suggesting is that MicroSoft allow there to become a "Redhat" for the very old, already dead versions of Windows (e.g. 95, 98, NT 4, etc.).

A "Redhat," mind you, that would be willing to pay MicroSoft 15%!

[Southack]

"That's a bit naive. First, Microsoft isn't a charity. It isn't practical for MS to support old software forever -- just as it isn't practical for RedHat to support Linux versions forever."

No, what I'm saying is let 3rd party companies provide such support and enhancements after MicroSoft reaches its own cutoff points/times.

Think about the movie industry. Hollywood first starts out with theatre releases, followed by pay per view cable sales, followed by DVD/video sales, followed finally by network TV releases.

I'm suggesting applying a very similar model to MicroSoft's sales. MicroSoft releases first, then supports it, then offloads it to a few preferred vendors, then finally makes it fully Open Source.

In contrast, MicroSoft currently kills the revenue stream from each release after a fixed time. Why? Why not follow the Hollywood movie model and continue to bring in revenue from old releases?

[rdb3]

I like your thinking. The only thing I would change is Win95 to NT 4.

[Bush2000]

Besides, if nobody wants it, what does MicroSoft have to lose?

Erosion of the marketplace for its future products.

[Southack]

"Fourth, the Windows 95 codebase is dead."

Ding! Ding! Ding!

We have a winner!

Windows 95 is currently generating ZERO $$$ in new revenues for MicroSoft.

That's like burning the old movie reels after an early Hollywood theatre release instead of selling the movie on DVD or to TV.

Let firms such as mine have first crack at Windows 95. Earn revenue from them, and when they tire of it, release the code completely onto the Open Source world where at least MicroSoft can pick up a percentage of the resales.

Sell the movie on DVD and to TV. There's more to the release than just the big publicity and the glory release in the theatres!

[Bush2000]

So why not allow an Open Source community to rally around that Windows 95 code base rather than Linux?!

I wouldn't wish Windows 95 on anyone but our ChiCom enemies.

[Bush2000]

No, I'm suggesting that some money coming in from currently dead code is more profitable to MicroSoft than would be no money coming in. Large commercial resellers of Open Source Windows 95+ systems would clearly pay MicroSoft a percentage of the gross rather than face lawsuits or jail.

And the money coming in for these dead OSes wouldn't be spent on its new products...

[Bush2000]

Windows 95 is currently generating ZERO $$$ in new revenues for MicroSoft.

But Windows XP is. There's virtually no upside for MS in your plan.

[Southack]

"Erosion of the marketplace for its future products."

Fine, but do the math.

Compare how many customers like Munich's 14,000 desktops you are losing to Linux versus what sending an old, dead OS like Windows 95 into Open Source would do.

Is Windows 95 really a threat to new MicroSoft OS releases?! I have a tough time swallowing that claim, anyway.

It's dead already. It's useless to Microsoft, so earn some revenue by following the Hollywood release model.