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10.26.08

Microsoft Q1 2009: The Things Microsoft Does Not Tell About Its Continued Decline

Posted in Finance, GNU/Linux, Microsoft, Office Suites, Search, Vista, Windows at 7:40 pm by Dr. Roy Schestowitz

And GNU/Linux is partly responsible for it

Graph decay

WHEN Microsoft unleashed its previous financial report, we provided evidence to show that decline was muchly inevitable. A lot of what we put forth back then still applies. Since then, we have presented past allegations of financial fraud at Microsoft. These allegations came from the very inside, indicating or at least suggesting that for quite some time Microsoft had been playing the infamous ‘bucket game’ to improve perceptions around its financial results and overall health. Novell may be the same thing, but that’s another story.

At the moment, Microsoft may be heading towards debt, which its board of directors has already approved. In the mean time, in order to keep up appearances, Microsoft turns its savings into acquisitions, i.e. revenue through artificial growth. This is a very important observation which is worthy of special attention, so again:

Microsoft converts its cash reserves into revenue and income, but this is not sustainable because Microsoft’s bottom line is declining.

With that in mind, let us start today’s assessment of Microsoft’s financial results, which it published on Thursday. We rely on external sources that we reference, so accusations of inaccuracy — if any — should not necessarily be directed at us.

Bad Forecast

Microsoft cut its forecast last week. The stock sank as a result, but some people quickly forgot all about it due to the important report which came shortly afterwards.

Microsoft had already lowered its forecasts in previous quarters in order to meet or to beat them. This is another important point which is missed by many reporters. Microsoft adjusts and readjusts its goals based on its prospective ability to satisfy the market, so it always gets to say that it beat expectations and its public image benefits from this.

Here is some articles about the latest forecast being altered:

The Microsoft-focused Ivy Lessner, who is almost always bullish when it comes to this company, was not impressed. Who could possibly describe such a thing as good news? There are some answers to this question in the IRC logs.

Microsoft Cuts Outlook, Wary of Economy

The company’s lower financial outlook on Thursday is assuming a mild-to-deeper recessionary environment, CFO Chris Liddell said on the company’s fiscal first-quarter earnings conference call.

It is rather amusing that only a day later, Microsoft and its more obedient press pretended that Microsoft was not (or was hardly) affected by the economical climate. How quickly they forgot.

Results

Joe Wilcox, who is biased in Microsoft’s favour, summarised it thusly:

Microsoft started off fiscal 2009 with solid quarterly earnings. But the future doesn’t look as bright.

Market Watch had a similar take:

Microsoft shares gyrate after mixed report

Software giant beats estimates, but trims forecast for current period

This still misses some of the facts which a divisional break-down would expose. Not everyone could be easily deceived and not everybody was impressed. Here is a portion of an article from IDG:

Microsoft Corp.’s Client revenue, which virtually all comes from sales of Windows Vista, grew just 2% year over year to $4.22 billion in its first quarter of 2009.

“That fell pretty far short of Microsoft’s expectations,” said Matt Rosoff, an analyst at independent research firm Directions on Microsoft. “That’s always a worry, since it’s the core of the company’s business.”

Shelved away are some interesting figures suggesting a significant change in operating system sales. It is down 1% in terms of revenue as customers adopt non-Premium (i.e. not Ultimate and Business) versions of Windows Vista. There are actually other reasons for this and shall come to this in the moment. It’s to do with Windows XP.

Erosion of Savings and Budget Cuts

As stated at the beginning, Microsoft’s cash piles grow thinner, but let’s look a little more closely at some numbers in order to explain what is happening.

For starters, as stated in TGDaily, Microsoft’s market value has sunk like a rock since the beginning of the year. It’s already below $200 billion.

Microsoft market cap drops below $200 billion

Tech stocks was hit once again hard during a rough trading session that shaved 514.45 points from the Dow and 80.93 points from the Nasdaq index. A quick look at stock values revealed a few winners and losers so far this month.

On the winning side are Motorola, Ebay, Apple, Cisco, Google, Novell and Oracle, all of which were able to either keep their stock values stable or even showed a slight increase during this shaky month.

The value of the company (including assets) is one thing, but another is bank balance. As reported and shown by Venture Beat, Microsoft’s cash is being thrown away, partly due to its relentless attempts to grow revenue.

Buried in the first quarter earnings report from Microsoft is an astounding fact. For the first time that I can remember, Microsoft closed the quarter with less cash than Apple. Cash, cash equivalents and short-term investments for Microsoft add up to $20.7 billion. Apple, meanwhile, closed the quarter with $24.5 billion.

For visual evidence, see the chart here.

As Microsoft’s bank balance approach zero (heavy buybacks still in progress), there are budget cuts too. This new one is measured at half a billion dollars:

The unexpected news in today’s Microsoft’s earnings conference call? The company’s statement that it would cut up to $500 million from its budget this year.

An anonymous Microsoft employee, along with many of the responses in his blog (mostly Microsoft employees), indicates that prospects do not seem rosy even to those who view it from the inside where optimism and morale are pervaded.

So, if your team had to get by with 10% less budget, how do you think it would be best addressed?

IDG published the article “Microsoft CFO outlines plan to weather economic crisis.” Microsoft is aware of the fact that it is by no means immune to anything.

To lure and retain customers who are looking “to do more with less” in the challenging economy, Liddell said Microsoft will focus on providing “high-value products at a low total ownership cost as a competitive advantage.”

GNU/Linux Harms Microsoft’s Profits

The decline in Windows revenue was mentioned earlier and it echoes a similar trend which was spotted and reported back in April of this year. The reason for that, according to many sources, is the sudden rise of sub-notebooks, many of which (estimated at 40% or higher) run GNU/Linux. Here are some articles or posts about it:

1. Microsoft sales tumble from quarterly high

Netbooks running Windows mean growth but relatively low income as they do not run money spinning versions of Windows, like Windows Vista Premium Edition. Microsoft said it was too early to say how much netbooks are cannibalizing traditional sales.

2. Linux Netbooks Impact Microsoft Sales

Now, for the twist: It’s no secret that multiple Linux distributions — particularly Canonical’s Ubuntu and Novell’s SUSE Linux, among others — have gained major momentum on Netbooks. In response, Microsoft has had to cut its Windows OEM prices to make sure Windows is a major force in the Netbook market.

The VAR Guy predicted in July that Netbooks running Linux would proliferate the market. It’s already happening.

How much does Microsoft charge Netbook makers for Windows? Alas, The VAR Guy must concede that he doesn’t know for sure. But clearly, given Microsoft’s latest financial statements, the move to new hardware form factors coupled with open source is causing the software giant some pain.

3. Microsoft: Client Revs Whiff; Blame The Rise of Netbooks; Reduced Guidance Reflects Anticipated Recession

The company notes that growth in the client division was four points short of guidance.

4. Netbooks Slam Shut On Vista Sales

Revenue from Microsoft’s key Windows franchise grew just 2% in the most recent quarter as more PC buyers opted for smaller, more nimble, netbook-style devices that don’t need a fat OS like Vista. Does Redmond have an answer for this trend?

[...]

Redmond’s problem: An increasing number of computer buyers, mostly in high-growth, price-sensitive emerging markets, are realizing that they can get by with so-called netbooks for most of their online requirements. It’s a fact that’s leaving Windows Vista out in the cold in some of the world’s fastest growing tech markets.

Netbooks, from offshore manufacturers such as Taiwan’s Asus, typically lack the horsepower to run the big and bulky Vista. But they’re fully capable of performing routine computing tasks such as e-mailing, Web surfing, and instant messaging. Many models feature the free Linux OS.

5. Microsoft: NetBooks Affecting Windows Revenue

Matt Rosoff, an analyst with Kirkland, Wash.-based research firm Directions On Microsoft, said one area of concern for Microsoft is the falling percentage of premium priced versions of Windows versus non-premium versions, which could be the result of more people buying NetBooks.

In order to fend off GNU/Linux, Microsoft brought back XP and it 'sells' Windows for mere pittance. Fortunately, there is no free lunch and dumping proves costly.
Miserable and predatory pricing is all that remains, just as Glyn Moody predicted.

Web Failures

The Web division performed abysmally also. Examples of this can be found in:

1. Microsoft 2.0 feels data center pinch

All that spending, though, has meant losses and increased costs associated with any revenue that it does earn. Losses more than doubled suddenly in the summer’s fourth quarter while revenue has fallen each quarter since January.

2. Windows to the future

The problem for the Seattle-based group is that it is approaching a crossroads. For decades, it has sold PC users, both professional and consumer, a full suite of products. Yet the future is à la carte. Instead of buying a software licence for everything that might conceivably be needed, customers will pick and choose – a slice of word processing please but hold the PowerPoint. Software will increasingly be offered as a (low-margin) service, run from the internet and piped into the building as necessary.

3. When will Microsoft regain its identity?

And given its laughable search market share and its inability to make any headway in the advertising market, I think it’s safe to say that Microsoft committed a major blunder.

And now, it’s happening all over again.

4. Earnings: Microsoft’s Profits and Revs Up; Online Losses Increase

Earnings: Microsoft’s Profits and Revs Up; Online Losses Increase

[...]

Division wide: in its Entertainment and Devices Division (EDD), which includes XBox and Zune, revenues came in at $1.81 billion, down from $1.93 billion in the year-ago quarter. Operating income for the division was $178 million, up from $167 million in the year ago quarter. In its Online Services Business (OSB) unit, which includes MSN and other online advertising services, revenues came in at $770 million, up from $671 million in the year ago quarter. Operating losses for the division widened significantly, to $480 million, from $267 million in the year ago quarter.

We recently mentioned parts of Microsoft’s Web division getting shut down.

Not So Entertaining Anymore

Microsoft’s other divisions did not receive much love either. Such as the case with products like Zune and XBox 360, which suffered further decline. By the numbers:

1. Microsoft Revenues Down at Xbox/Zune Division

Xbox 360 and PC game revenue decreased by 22%, which the company attributed in part to the absence of a blockbuster like last year’s “Halo 3.”

2. Microsoft’s Q1 was not particularly riveting

Microsoft (NASDAQ: MSFT) had, if you’ll pardon the pun, a soft first quarter. The data just didn’t do anything for me. The software giant, which competes with Apple (NASDAQ: AAPL), Yahoo! (NASDAQ: YHOO), Google (NASDAQ: GOOG) and IBM (NYSE: IBM), reported after the close of the regular session on Thursday. The stock was down slightly in the after-hours session, which seemed reasonable enough to me.

[...]

Sales for Xbox 360 declined 6%. Microsoft has to get the word out that the Xbox 360 is the console to own. The gaming device is a key growth area for the company.

Analysts

The National Post published “Tough times ahead for Microsoft, analysts predict.” Here is a portion from it.

Like most technology companies, Microsoft Corp. has seen its fortunes dwindle over the past year. Through a failed acquisition of beleaguered search operator Yahoo! Inc. to the bad public relations image it has tried to shake off through a much-ballyhooed advertising campaign with Jerry Seinfeld, Microsoft’s stock has dropped almost 30% over the past year, including a 7.8% plunge during Wednesday’s trading session on the Nasdaq index to US$21.53.

Even the Microsoft enthusiasts over at Motley Fool were rather disappointed

Yes, the days of fat feasts at Mr. Softy are over. Last night’s fiscal first-quarter results for the world’s biggest software company confirm it.

Conclusion

At risk of seeming repetitive, it ought to be stressed that whenever Microsoft releases figures, it is important to look more closely at the sobering figures for oneself. This rule applies to almost any company and every press release or conference.

A lot of journalists are lazy or biased (or both), so they merely echo Microsoft’s claims, which shrewdly obscure all the weak(er) points. Also important to realise is the fact that Microsoft is losing money based on its bank balance, but it’s buying assets that continue to give an illusion of growth. Despite acquisition, Microsoft value as a company continues to drop pretty fast.

“There is such an overvaluation of technology stocks that it is absurd. I would include our stock in that category. It is bad for the long-term worth of the economy.”

Steve Ballmer

Novell Does Not Care About Ogg Anymore, Embraces Microsoft WMV Instead

Posted in Microsoft, Novell, Videos at 5:55 pm by Dr. Roy Schestowitz

The continued ‘Microsoftification’ of Novell?

As we mentioned before, Microsoft's influence on Novell is increasing. Watch Novell’s video archive for BrainShare in 2007 (we include screenshots as that may change in the future).

Novell videos in 2007

Watch what happens in 2008. No Ogg. None. However, Microsoft’s patented formats are added as an option.

Novell videos in 2008

Here is a printout of the complete Web page [PDF], for future reference.

Eye on Microsoft: All of Windows Compromised, Windows Mobile Claimed Dying

Posted in Apple, Asia, GNU/Linux, Security, Windows at 5:28 pm by Dr. Roy Schestowitz

Broken glass

Another week, another tough week. Later today we’ll expose some of the realities behind Microsoft’s financial results — things that Microsoft nonchalantly (yet successfully) concealed from the press, but not all of it. First off, however… Microsoft’s latest headaches and signs of rapid decline in the technical sense.

Security Nightmare

As quoted in ZDNet, Microsoft admits that Windows turns perfectly-functional PCs into zombie PCs within minutes, which isn’t particularly surprising given the prevalence of them (roughly 320,000,000 PCs are believed to be zombies).

“How did we end up this way,” some people inquire.

Well, look no further than earlier this week when another gaping hole in Windows got exposed. Merely every version of Windows is affected, as one should expect.

Microsoft Sends Windows to the Emergency Room

[...]

Microsoft identifies 16 affected Windows versions, including service packs. Reminder: Microsoft only lists service packs that are currently supported. So, the number of actually affected Windows versions is much larger. That said, enterprises should be running newer, or the newest, supported service packs anyway.

How severe is this flaw? Look no further than this merciless reality:

Microsoft is about to issue an emergency security update to plug a vulnerability which could allow an internet worm to be spread via a computer without the user doing anything.

Yes, it’s user intervention-free. Just plug-and-[let-the-crackers]-play.

Here is some further (and later) analysis.

While Microsoft has labeled Thursday’s emergency patch MS08-067 as “critical” and provided a rare out-of-cycle fix because its exploit could easily be used as worm on a compromised network, one security researcher doesn’t think it will happen that way.

“It’s likely we’re going to see this packaged with some other attack.” said Ben Greenbaum, senior research manager at Symantec. “A Web-based attack, for example. We’re looking out for are exploits of this being bundled with client-side exploits or Trojans so that the worm can get past corporate firewalls and get behind that firewall into the internal network.”

This hole is already being actively exploited.

A day after Microsoft released an emergency patch for a critical flaw that could allow self-replicating attacks, researchers have identified a nasty trojan that attempts to exploit the vulnerability.

The alarming news made in into many blogs, such as this one. This was severe enough to be covered very widely, including in top publications:

This won’t the last such vulnerability. It happened before.

Microsoft Fights Against “Addicted” Users

Some famous quotes can never be repeated excessively.

“They’ll get sort of addicted, and then we’ll somehow figure out how to collect sometime in the next decade.”

Bill Gates, about the Chinese people

We wrote about Microsoft’s new behaviour in China several days ago. There are still a lot of reactions to this development in English-speaking blogs, but Chinese bloggers are said to be fuming.

This gives a wonderful reason for the world’s largest Internet population to migrate to GNU/Linux and also provides a good opportunity (or ‘ammunition’) for existing Chinese GNU/Linux users to persuade their friends, family, colleagues or poor peers to liberate their PCs. Microsoft flexed its muscles to show that Windows is not free (neither libre nor gratis).

The kerkuffle there is far from over because Microsoft is now targeting local shops, not just users.

TWO computer retailers in Sim Lim Square accused of peddling counterfeit Microsoft programs have agreed to pay $70,000 in damages, the software giant said yesterday.

The shops’ directors will also do 144 hours of community service, which includes providing IT services to charities, as part of an out-of-court settlement.

Large news sites which covered the latest situation include:

  1. Reuters: Chinese surfers see red over Microsoft black-outs
  2. InformationWeek: Chinese Hackers Angered By Microsoft’s Epic Fail
  3. New York Times: Chinese blast Microsoft over ‘black screen’ piracy notice
  4. Telegraph: Microsoft faces boycott in China over ‘virus’ which shames pirated software users

There were some bad articles out there too. Here are some examples.

“Now it compares them to people who murder with swords and pistols.”Associated Press, a notorious fighter against Fair Use, had Jessica Mintz use propaganda words like “piracy”, which the editors approved. The article’s headline proudly proclaimed that “Microsoft goes black, making Chinese see red,” but the article starts with “An anti-piracy tactic…” Associated Press charges a lot of money for quoting more than 4 words, so stopping here is a must.

USA Today put the word “piracy” right inside the headline, which was “Microsoft anti-piracy tactic turns computer screens black.”

The Wall Street Journal seems to have changed its headline from a propaganda-packed “Microsoft Stirs Up Pirates” to “Microsoft Tactic Raises Hackles in China.” Maybe the editor/s changed the headline after it had been published because there is clear inconsistency in the feeds.

Anyway, here we have people that Microsoft victimised like drug dealers (by its very own admission). Now it compares them to people who murder with swords and pistols. Not so noble, is it? They should have gone with Red Flag Linux rather than surrender to short-term favours from Microsoft.

The British press blew it too. This one has an image of a skull (symbolising death), so it’s not just a bad headline: “Microsoft sued over anti-piracy activity.” Is copyright infringement compared to murder now?

California’s Antitrust Case Against Microsoft

Illegal monopolisation efforts by Microsoft have already had it settle before prosecution in California. There, too, Microsoft had abused its dominant position to starve competitors and harm consumer by over-pricing. Based on the Los Angeles Times, however, citizens have not yet received their compensation from Microsoft. This seems almost like a farce.

Most of Microsoft settlement for California school computers untouched

[...]

But most of the money — nearly $200 million — remains untouched.

“That’s troubling to us,” said Richard Grossman, a partner with Townsend and Townsend and Crew in San Francisco and co-lead attorney for the plaintiffs. Grossman said the state’s schools will probably receive even more money, once a final piece of the lawsuit is settled.

Some of this money is used for deployment of GNU/Linux at Californian schools, thanks to people like Christian Einfeldt. It’s not another classic case of ‘funny money’, where the abused party that can only use compensation funds to license more overpriced and shoddy software from the very same convicted monopolist.

“Some of this money is used for deployment of GNU/Linux at Californian schools, thanks to people like Christian Einfeldt.”One reader highlighted this potion of the article: “The windfall was part of a $1.1-billion settlement of a class-action lawsuit against *Microsoft* that alleged the company had plotted to monopolize a portion…”

“Alleged?” says this anonymous reader, “what kind of apologistic writing is that from the LA Times? Microsoft was found not just guilty but guilty enough to warrant punishment. Also, I thought that settlement was because Microsoft was guilty of price-gouging.”

“That’s $1.1 billion that Microsoft is keeping out of the California economy,” he adds.

“Also, is it wise for the journalist Evelyn Larrubia to be so flexible with the facts? Not only is knowingly backing Microsoft a general liability, but misrepresenting court documented facts in a newspaper is not the way to stay employed as a journalist. Endorsing Microsoft is a liability. Definitely not a safe move.”

Further, argues the reader, “here is a start of a longer list [of the problems at hand]:

  • HIPPA / privacy violation.
  • Security failure (see latest remote access hole)
  • Overcharging (as documented in court in most of the 50 states)
  • Incompatibility (even with other version of own products)
  • Poor documentation (see recent Ars Technica article)

“The software is sold ‘as-is’ so the fault does lie squarely on the shoulders of the chumps who decided to push ideology ahead of technology and deploy Microsoft instead of following best practices.”

Microsoft Employees Settle for Change

Windows ‘monopoly retention’ seems to be eroding, even at Microsoft.

One poster wrote: “I’ve been an MS employee for a long time, and I knew we were toast the first time I laid hands on a Vista based machine. When I replaced my personal laptop this summer, sorry to say, I went with a MacBook…”

Watch the comments too. Some Microsoft gurus may moving to GNU/Linux as well (older news).

In another new abrasive campaign, Intermedia characterises those who stick with Microsoft as sheepish.

Intermedia has launched a whimsical ad campaign that pokes fun at Microsoft’s hosted-services partner program to encourage customers to partner with Intermedia instead of the software giant.

The ad campaign and accompanying Web site advise partners who are considering offering Microsoft hosted business-productivity services not to be “sheep” by “handing all of your customers to Microsoft.”

Microsoft does not appear to have responded to this.

Windows Mobile is Dying

The early eulogy — if not a sad obituary — of Windows Mobile (WM) continues. Recently it was Om Malik who claimed WM was in trouble, as we noted in this post. Over a month ago we saw the product missing shipment targets and there are other ongoing issues.

Cringely has published an excellent article where he predicts that Windows Mobile will die and Joe Wilcox argues that iPhone “beats Windows Mobile 6.x into Coma.”

Windows Mobile’s star is rapidly falling. Coming into 2008, RIM pushed Microsoft out of second place for smart phone operating systems, according to Gartner. Apple has surely knocked Microsoft into fourth place. The question: Is it fourth behind RIM or Apple? That depends on whether Apple snatched second place from RIM.

Interestingly, this conclusion isn’t based on any personal preference or subjective analysis. I’m not saying that Windows Mobile is bad, just that it is probably doomed. It’s a simple matter of market economics.

[...]

And where will Windows Mobile be in 2011? There way things are headed now, given that Microsoft can’t really afford to be anything but first or second on the platform that supplants Windows, I’d say Windows Mobile will be dead.

So, a lot of distinguished and respected voices have lost faith in the not-so-promising future of Windows Mobile. At least one of these voices used to AstroTurf for Microsoft. Earlier this week it was only a Microsoft talking point, Rob Enderle, who was throwing one cellphone ‘article’ at some more small site, denying the death of Windows mobile, despite claims to the contrary from some very major Web sites, including PBS and the Microsoft-friendly New York Times.

Patent System Status in the United States, European Union

Posted in America, Europe, Law, Microsoft, Patents, Red Hat at 11:18 am by Dr. Roy Schestowitz

Software patent on rise

North America (United States)

THE problems spawned by software patents affect not only Free software developers. They harm developers as a whole, but Free software is subjected to other (mis)treatment because of the way the software is distributed. Red Hat’s legal team has just published a post to explain the severity of this issue. [via Digital Majority]

There are now more than 200,000 software patents, and there is no practical way to be sure that a new program does not infringe one or more of them. A patent lawsuit can cost several million dollars in attorneys’ fees. The risk of patent litigation is one that the FOSS community has learned to live with. But it hardly seems likely that the risk is doing anything other than inhibiting software innovation.

This number, two hundred thousand at the least, is exceptionally high. It boils down to a human capacity issue and there is clearly a lot of overlap, i.e. duplicates. It’s not only problematic to developers but also to examiners who work at the patent office.

USPTOIs any developer bold enough to internalise all of that reading material and then engage in a task as simple as typing away on a computer keyboard, as opposed to a process more complicated such as designing and manufacturing a machine to perform a particular function? Software is not unsophisticated, but the barriers to entry are very different and the amount of software out there is vast. This imperils studies of prior art and planning of development that’s safe from patent violations.

“Software is not unsophisticated, but the barriers to entry are very different and the amount of software out there is vast.”The simplest fact is that barriers in the face of trivial tasks and creations only discourage more such creations. This was not the goal of the patent system, was it? This issue must be faced and recognised. Only then can it be properly addressed.

Microsoft is meanwhile obtaining some very trivial patents in order to brag about numbers (quantity over quality). In reality, the poorer the patent, the easier it is to invalidate, but at the same time, the poorer (broader and more trivial) the patent, the more companies and products it jeopardises. It causes unrest and Amazon’s one-click shopping is a good example of this.

The ‘bleeping patent’, which was previously summarised here, is making its appearance in The Times.

Microsoft patents web moderator robots

[...]

There’s a danger, though, that it could go too far. Who’s to say that an overzealous Microsoft employee might not accidentally on purpose blacklist the names of rivals such as Apple and Linux?

Worse, there are governments around the world that would probably go further still, suppressing dissent not with guns and clubs but by preventing people from even discussing concepts such as “protest” or “freedom”. And that, I’m sure you’ll agree, is a freaking scary idea.

Ethical issues aside, there is little merit to be found in this so-called ‘invention’. The PgUp/PgDn patent, which was previously mentioned in [1, 2, 3, 4, 5], raised similar questions.

To show how trivial some of Microsoft’s patents can be, here is a slightly older one:

theodp writes “Microsoft was just granted U.S. Patent No. 7,392,326 for Text Entry in an Electronic Device. From the patent: ‘the invention may automatically add a ‘www.’ and a ‘.com’ to the text the user is entering and display this combined text’. To get the point across, Microsoft included an illustration showing the ‘invention’ in action, transforming ‘foo’ into ‘www.foo.com’. Sure it’s not sorcery we’re dealing with?”

How about…

  1. Transaction-safe FAT file system
  2. Method of swinging on a swing

This is innovation???

Europe

Alison Brimelow

A few days ago we wrote about the latest important development in Europe — an appeal regarding software patents. There are already some unhappy people who deserve to be heard.

[T]he questions seem like a school book example of avoiding clarifications by asking the wrong questions. Are the EPO just cowards, creating straw men or obstructing the clarity of law?

This was also covered in the EPO’s Web site and in some other patents-focused legal Web sites, whose bias is in their favour (more lawsuits and more patents help lawyers makes a living at developers’ expense):

Lastly, here is a quick word about OIN. In response to Roberto’s claim (covered some days ago) that “Keith Bergelt [...] won’t collaborate with FFII or similar organizations to fight against software patents in Europe,” PL Hayes wrote:

Then (assuming he is not a patent system economics illiterate) he certainly does not “care about Linux” – and innovation in general – and I assume OIN is some kind of risibly effete poor man’s version of Intellectual Ventures?

Software patents protest against EPO

In a follow-up post from Roberto, more details are given.

Keith says that in OIN’s vision there are “good” patents and “bad” patents, and they won’t take part in the European software patents debate. All in all OIN cares just about Linux, and middleware or application levels are not in OIN’s agenda for the time being. Google is proud to participate in OIN’s mission, as Di Bona made clear through the official google blog, and that is probably good for all (big) Linux end-users.

Will ever OIN go up in the open source software stack?

PL Hayes again replies by saying:

Right… so it’s just a patent pool with a misleadingly grandiose name (Open Invention Network), set up for the benefit of companies using “the Linux operating system or certain Linux-related applications”.

Some of those companies lobbied for codification of the EPO’s software patent granting practices so it’s not surprising OIN won’t take part in the debate and it is clearly no friend of FOSS and innovation in general, contrary to the impression it sometimes gives.

OIN is not the solution. It’s not harmful, but it’s not the solution.

What to Make of Nokia… Regarding Licences, Patents, and Formats

Posted in DRM, Europe, Free/Libre Software, GPL, Law, Microsoft, Open XML, OpenDocument, Patents at 9:12 am by Dr. Roy Schestowitz

Nokia: pro-software patents, pro-DRM, allergic to Ogg, GPL, but supportive of ODF.

FOR a variety of reasons that mainly involve software patents, Nokia was mentioned on several occasions this month [1, 2]. Nokia is lobbying for software patents in Europe, which makes it part of the problem, as opposed to a potential resolution. It is a damn shame really because Nokia has been trying to befriend developers with GNU/Linux platforms like Maemo, but at the same time it’s throwing some FUD at the GPL. That FUD has already spread from ZDNet to other ‘sister’ sites like CNET whilst the press hails Symbian for becoming an “open source” player in a large number of places. It bodes rather oddly although the EPL, which Symbian has chosen, is considered open source.

Nokia phone

It was only yesterday that Groklaw grokked: “Watch out for Nokia. Microsoft suddenly likes the Eclipse Foundation too. Here’s the very smooth Sam Ramji on the subject. “It’s all about the developer,” he says. Well, not if you’re an end user. End users benefit from the GPL and we know it. There’s a project regarding Eclipse tools for Silverlight now. Just what you were hoping for. Not. It was probably predictable when Ward Cunningham left Microsoft to join Eclipse years ago.”

Note the following take on this appointment of a Microsoft man inside Eclipse. A term is coined there and further discussed in the comments. That term is “mono-sourced.”

Eclipse the tools framework is in great shape but Eclipse the exemplary IDE that competes with mono-sourced offerings from NetBeans and Visual Studio is showing signs of growing pains. Eclipse is trying to build a large system without a Linux-style benevolent dictator, in fact with dozens of corporate interests large and small that don’t necessarily share the same vision. The result has been that offerings such as Web Tools and Profiling have not been as well integrated as the base Java development environment.

Further, writes Groklaw: “I believe it’s all part of Microsoft’s hatred for the GPL, its determination to kill it off and make everyone use BSD-like licenses instead (so it can proprietize whatever it pleases), and its determination to redefine Open Source to mean visible code that Microsoft controls through patents instead of copyright. If you are stupid, you’ll help them. Thanks for nothing, Nokia. Licenses matter, as this latest shift should tell you in clear strokes.”

That possibility has been somewhat easy(ier) to suspect since around June when Nokia went a little offensive. The same goes for Microsoft, which seems to have 'polluted' Nokia with some of its own employees, who now attack Ogg and lobby for DRM.

On the other hand, Nokia (or Qt/Trolltech) has been a friend of OpenDocument format. this new article shines some more light on it.

Nokia Joins Open-Source Trend for Mobile Platforms

[...]

The development of a mobile OpenOffice platform for wireless devices is also in the works. Earlier this year, java.net opened a new project that aims to build a new set of tools for creating and updating OpenDocument format (ODF) documents in mobile devices. Though still in the early development stage, the new Java SE and Java ME platform tools eventually should enable mobile devices to interact with the ODF-compatible OpenOffice.org productivity suite.

As a timely note, another lesser-known office suite which supports ODF is AbiWord. OStatic wrote about it the other day.

Word processor. Let’s start with AbiWord, my favorite open source word processor. It came out in a great new version earlier this year, and is not only totally compatible with Microsoft Word, but it even sports an interface very similar to Word’s. It’s clean, with straightforward menus and toolbars, and as you exchange files back-and-forth with Word users, you won’t run into problems such as incorrectly formatted tables. AbiWord also supports Open Document Format (ODF), for completely open document sharing.

AbiWord was previously mentioned in [1, 2, 3, 4, 5, 6, 7, 8, 9]. Slightly troubling was its stance on OOXML when the whole world was fighting it, amid sheer abuse.

“Compatibility with DRM. We understand that this could be a sore point in W3C, but from our viewpoint, any DRM-incompatible video related mechanism is a non-starter with the content industry (Hollywood).”

Stephan Wenger (of Nokia) lobbying against Ogg [PDF]

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