EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

05.25.07

The Economics of FUD

Posted in Courtroom, Deals, Deception, Finance, FUD, Intellectual Monopoly, Law, Microsoft, Novell, OpenOffice, Patents, Red Hat, SUN, Ubuntu at 9:13 pm by Shane Coyle

Once upon a time, I had opined that Microsoft’s true bounty in the Microvell deal was Novell’s complicity in Microsoft’s attempts to undermine the E.C. Decision and fines, and that the FUD was merely a bonus.

Apparently, I hadn’t any appreciation for just how much of an economic interest the monopolist has in using any and all means to defend their position for as absolutely long as possible. While reading through the Linux Foundation’s response to Microsoft’s recent patent saber-rattling, I was taken aback at the truly staggering sums involved:

In the time it will likely take you to read this article, Microsoft will have made $500,000 in net profit. It’s instructive to note that the majority of that profit comes from its Windows operating system and Office suite of business software. Not coincidentally, those are the two product lines most threatened by Linux operating systems and Open Office.

Given the high stakes involved, it’s not surprising that Microsoft would take steps to protect its turf. In fact, it makes perfect sense. Let’s face it: If you were making $1 billion a month, what would you do? Perhaps engage in rhetoric and hyperbole to generate some old-fashioned FUD (fear, uncertainty, and doubt)? Just looking at the numbers, it’s easy to see that even if the scare campaign merely delays a customer’s migration from Windows to Linux by a single day, Microsoft is $34 million dollars better off.

Think about that – just one week of Novell-Fueled FUD pays for all of those SUSE subscriptions (7 days @ $34M each = $238M, MS payed $240M for 350,000 SUSE subscription coupons). Each and every day that Microsoft has been able to use Novell’s capitulation to FUD Linux since November 9th 2006 has been pure profit.

Does anyone still really want to argue that Novell was the party of advantage, as evidenced by the relatively larger (but insignificant to Microsoft, as these number indicate) payment for the patent covenant?

As far as the statement from the the Linux Foundation, they have called on Microsoft ("a rational actor") to "work with the Linux ecosystem to restore confidence in the patent system by making sure they are issued only for truly unique, innovative, and novel functions that advance the state of the art." The statement also includes not-so-subtle reminders to Microsoft that they are not the only people to hold significant patent portfolios.

Joining in the patent cold war recently, on the side of Free Software and toting a significant and focused patent portfolio of their own, was Sun’s Jonathan Schwartz, who has pledged to rally to the aid of Red Hat and Ubuntu, if need be. (It should be noted that Sun engaged in a controversial deal with Microsoft back in 2004, in which Sun secured protection from potential IP claims regarding OOO by MS for only Sun StarOffice customers – sound familiar?)

Of course, neither Microsoft nor Sun want to truly test their spurious software patents in a court of law, but moments such as these allow us some insight into the dispositions, and motivations, of the "leaders" of the software industry.

In this case Microsoft, Novell and Sun all have a vested interest in the perpetuation of the software patent myth, and would prefer just an adjustment of the broken system.

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

2 Comments

  1. Roy Schestowitz said,

    May 25, 2007 at 10:53 pm

    Gravatar

    Good take on the main issues.

    What I cannot understand if what Zemlin has described in the past as “admiration” (IIRC) for Microsoft. We have seen some shades of this in Mark Shuttleworth recently. All in all, they seem to be constructive as long as no exclusionary contract is involved.

    Zemlin: “We ask Microsoft to stop engaging in FUD campaigns that only serve to undermine confidence in the U.S. intellectual-property system. Instead, please work with us to make the patent system tighter, more reasonable, and efficient for everyone in the software business.”

  2. Shane Coyle said,

    May 25, 2007 at 11:04 pm

    Gravatar

    If you are in the software business (or looking to be), you may do well to invest heavily in OpenOffice.org development – it seems that whichever company is the primary contributor to the codebase gets a visit (and a check) from MS legal in exchange for your tacit acknowledgement of their "IP"

    If you haven’t any morals, it could be a winning business plan.

What Else is New


  1. Links 24/7/2014: Oracle Linux 7; Fedora Delays

    Links for the day



  2. Valerie Strauss Explains Why Gates Foundation's Lobbying for 'Common Core' (Privatisation) is a Swindle That Makes Microsoft Richer

    Continued criticism of the Gates Foundation's lobbying and masquerading, with more journalists brave enough to highlight the corruption



  3. USPTO Officially Sets New Guidelines to Limit Scope of Software Patents in the United States

    Even patent lawyers finally acknowledge that the incentive to file software patent applications has been reduced, as the scope of patents on software has been noticeably narrowed and they are harder to acquire, let alone enforce in a courtroom



  4. UK Government Adopts OpenDocument Format (ODF) and Microsoft Already Attacks the Government Over It, Showing Absolutely No Commitment to Open Standards

    Only "Microsoft as the standard" is the 'standard' Microsoft is willing to accept, as its response to the Cabinet Office's judgment reveals



  5. Microsoft Layoffs of 2014

    Another quick look at Microsoft's horrible state of affairs and why it has virtually nothing to do with Nokia



  6. Links 22/7/2014: Linux 3.16 RC 6, New UberStudent

    Links for the day



  7. Links 20/7/2014: Jolla in India, Mega Censored in Italy

    Links for the day



  8. Longtime Mono Booster Joins Microsoft-linked Xamarin

    Jo Shields almost joins Microsoft, settling instead for its proxy, Xamarin



  9. Linux Foundation Welcomes Patent Aggressor Red Bend Software

    The Linux Foundation's AllSeen Alliance welcomes as a member a company that uses software patents to sue Free/Open Source software



  10. Matt Levy From Patent Progress (and CCIA) Does Not Really Want Patent Progress

    Matthew ('Matt') Levy moved into a foe of patent progress last year, but he still runs a site calls Patent Progress, in which he diverts all attention to patent trolls (as large corporations such as Microsoft like to do)



  11. Attacking FOSS by Ignoring/Overlooking Issues With Proprietary Software

    The biasing strategy which continues to be used to demonise Free/Open Source software (FOSS) along with some new examples



  12. Links 19/7/2014: CRUX 3.1 is Out, CyanogenMod Competes With Google Now

    Links for the day



  13. Microsoft's Massive Layoffs Go Far Beyond Nokia; Nokia's Android Phones Axed by Microsoft's Elop

    Microsoft's rapid demise and permanent exit from Nokia's last remaining Linux platform (after Microsoft had killed two more)



  14. Patents on Software Already Being Invalidated in Courts Owing to SCOTUS Ruling on 'Abstract' Patents

    The Federal Circuit Appeals Court has just "invalidated a software patent for being overly abstract," says a patents expert



  15. OpenSUSE 'Community' is Crumbling, AttachMSFT Killed SUSE's Potential (Except as Microsoft Tax)

    Not much too see in the land of SUSE and Attachmate, or formerly the company known as Novell



  16. Links 18/7/2014: Slackware Turns 21, Spotify Switches to Ubuntu

    Links for the day



  17. Links 16/7/2014: Manjaro 0.8.10 Third Update, SIA Migrates to Red Hat

    Links for the day



  18. Microsoft's Latest Round of Massive/Bulk/Large-scale Layoffs

    Microsoft boosters are preparing 'damage control' pieces ahead of massive layoffs at Microsoft



  19. Secrecy Allows British Government to be Manipulated by Microsoft for Spyware Behind Closed Doors

    Dependence on malicious software from NSA ally Microsoft is highly dependent, at least in Britain, on government secrecy and vain refusal to comply with Freedom of Information (FOI) requests



  20. Software Patent Applications Already Being Rejected in the US Owing to SCOTUS Ruling, Some Patent Lawyers Are Fuming

    Good news on the software patents front as the USPTO starts rejecting software patent applications, based on patent lawyers' words



  21. Links 15/7/2014: New Plasma, Google Announces Project Zero

    Links for the day



  22. Interest in Free Software Coverage and 9 Months With Tux Machines

    Thoughts about the level of interest in Free/Open Source software (FOSS) and growth of at least some sites that focus on GNU/Linux



  23. White House Backs Away From Appointing Patents Zealot to Top USPTO Position

    Philip Johnson is no longer poised to become the Director of the USPTO, which is basically an establishment that provides protectionism to primarily US-based corporations



  24. Professor James Bessen Presents the Case Against Software Patents After Important SCOTUS Ruling

    The debate about software patents in the Unites States continues, with academia on one side and greedy patent lawyers on the other



  25. Software Patents Demising in the US as Microsoft Patent Attacks on Android/Linux Suffer a Huge Setback

    M-Cam's assessment of Microsoft's bundle of extortion (using software patents) shows toothlessness, irrespective of the SCOTUS decision to effectively annul "abstract" software patents



  26. Links 13/7/2014: KDE Activity Surge

    Links for the day



  27. Pro-Microsoft Spin in Microsoft-Funded News Networks

    The rogue media (misinformation) campaign of Microsoft benefits from networks which have been paid by Microsoft over the years



  28. Cronyism at Play: European Hostility Towards Free/Libre Software Despite Espionage and Moles

    Europe continues to be held hostage with back doors, lock-in, and massive payments to foreign powers, despite evidence that these powers are destructive and hostile



  29. Wirelessly-Controlled Contraceptives and Other Villainous Bill Gates Initiatives

    Remote controls for people's reproductive systems are now in the making and Bill Gates is a prominent investor in the technology



  30. Links 12/7/2014: CrossOver, New Wine

    Links for the day


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts