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08.02.09

Comes Antitrust: Microsoft’s Attack Plan on GNU/Linux and Today’s Lessons

Posted in Antitrust, Bill Gates, Free/Libre Software, GNU/Linux, Intellectual Monopoly, Microsoft, Novell, Oracle, Patents, Protocol, SUN at 4:59 am by Dr. Roy Schestowitz

Summary: Beyond the Halloween Documents (Comes vs Microsoft exhibits)

TODAY’s Comes vs Microsoft post is a particularly long one, so we attempted to shorten it so as to keep the signal high and leave the details aside for separate inspection by those who are curious and have more time to spare.

“The authenticity of them was confirmed when the Comes vs Microsoft case produced exhibits for the broad public to access.”Many regulars are probably aware of the Halloween Documents. Eric Raymond (ESR) has a complete mirror of the text with commentary, so we will not replicate the documents, which have already been out there for years. The authenticity of them was confirmed when the Comes vs Microsoft case produced exhibits for the broad public to access.

Interestingly enough, Bill Gates said about these reports (Halloween documents): “The two documents in here from Vinod are the ones I want the board to see.” He was referring to Halloween Documents I and II. Here is Halloween Document I as text and as PDF. Here is Halloween Document II as text and as PDF.

Background

The documents which Gates referred to are already in ESR’s Web site (as plain text), so there is no point repeating the process of posting them publicly. However, to highlight some particular bits from them, here are some portions from the above. Microsoft explains that:

OSS is a concern to Microsoft for several reasons:

1. OSS projects have achieved “commercial quality”
2. OSS projects have become large-scale & complex
3. OSS has a unique development process with unique strengths/weakness

Microsoft later adds that “to understand how to compete against OSS, we must target a process rather than a company.”

Then come the issues of APIs, e.g.:

Linux and other OSS advocates are making a progressively more credible argument that OSS software is at least as robust – if not more – than commercial alternatives. [...] [E]vangelization of API’s in a closed source model basically defaults to trust, OSS API evangelization lets the developer make up his own mind.

The strategy in general:

Beating Linux
In addition to the attacking the general weakness of OSS projects (e.g. Integrative / Architectual costs), some specific attacks on Linux are:

* Beat UNIX
* All the standard product issues for NT vs. Sun apply to Linux
* Fold extended functionality into commodity protocols / services and create new protocols
* Linux’s homebase is currently commodity network and server infrastructure. By folding extended functionality (e.g. Storage+ in file systems, DAV/POD for networking) into today’s commodity services, we raise the bar & change the rules of the game.

That was about 10 years ago. As we noted before, Bill Gates once wrote: “What we are trying to do is use our server control to do new protocols and lock out Sun and Oracle specifically.”

How can Microsoft capture some of the rabid developer mindshare being focused on OSS products?

Some initial ideas include:

* Provide more extensibility – The Linux “enthusiast developer” loves writing to / understanding undocumented API’s and internals. Documenting / publishing some internal API’s as “unsupported” may be a means of generating external innovations that leverage our system investments.

It says “Documenting / publishing some internal API’s as “unsupported”…”

Does that sound familiar? As we shall show later, Microsoft also speaks frankly about “undocumentation”.

Here is embrace & extend in action:

OSS projects have been able to gain a foothold in many server applications because of the wide utility of highly commoditized, simple protocols. By extending these protocols and developing new protocols, we can deny OSS projects entry into the market.

From Halloween Document II we pull the following (thanks to Jason):

The Linux community is very willing to copy features from other OS’s if it will serve their needs. Consequently, there is the very real long term threat that as MS expends the development dollars to create a bevy of new features in NT, Linux will simply cherry pick the best features and incorporate them into their codebase.
The effect of patents and copyright in combatting Linux remains to be investigated.

Later came the SCO lawsuit, the Novell deal, and patent racketeering which carries on to this date.

New Material

Today’s main exhibit ties the above documents together and we believe that there is no copy of it anywhere else (as text), so Wallclimber kindly contributed her time to process the text, which we then analysed. Wallclimber says that this “strategy” document outlines exactly what they’ve done to Novell. “I especially got a kick out of the “fatal flaws”,” she added. Here is the original exhibit (PX08175, 1999) [PDF] and several points of interest that are extracted from the full text, which can be found at the bottom.

This short document is titled “Our Linux Strategy” and it was authored by Vinod Valloppillil.

Watch number 1 and number 2 in the list, then think about the loadable module [1, 2, 3, 4, 5, 6, 7], which added Microsoft hooks to Linux (hypercalls).

1. Embrace Linux: MS APIs / Linux kernel — release an MS version of Linux and/or release key MSFT platform technologies on Linux (e.g. parts of Win32, app server, etc.)

Pros: Ride the wave & try to evangelize Win32
Cons: Dramatically evangelizes Linux & may risk MSFT IP due to GPL license issues
Fatal Flaw:
– Impossible to make this revenue neutral with Windows biz.
– Doesn’t protect the “crown jewel” IP from being targeted at a later date

2. Embrace Linux: Linux APIs / MS Kernel — try to get Linux API’s on Windows — get more hardcore about POSIX subsystem on NT to capture Linux app base

Pros: Capture some of the Linux dev mindshare by making it easy to bring Linux apps to NT
Cons: Hurts Win32 evangelization
Fatal Flaw:
– There are no Linux apps that we covet.

Also think about Mono, Moonlight, and OOXML.

Prior to that, Valloppillil states:

This document discusses both our strategy and our plans for competing with Linux. To understand the strategy it is important to remember the following:
- Linux isn’t most importantly a product/feature; it’s a philosophy change
- Linux has no new specific features to co-opt
– Unlike the NC: the NC touted TCO benefits, and thus we introduced ZAK/ZAW
– Unlike the Internet: the Internet was loaded with technology changes, and thus we invested in browser technologies and reexamined all our existing products

The core strategic thrust of Linux is NOT an attack against some product/feature weakness of Microsoft. It’s an attack at the base of the commercial software industry – Intellectual Property.

Previous threats to Microsoft (the NC, Java, etc.) have been about replacing Microsoft’s IP with another company’s IP that claimed some new benefit (e.g. TCO). What differentiates Linux is that OSS attempts to extricate Intellectual Property all together.

Learn from what Microsoft did to NetPC (NC) and to Java. Watch what else Microsoft put forth as an option:

Cons: ISVs getting hooked on undocumented API’s, support costs, etc.

So, “undocumented API’s” are an option, eh? Microsoft admits their existence.

Watch what Microsoft thought about Wine back when it was a lot less mature and capable:

– Microsoft is an IP company. Like the rest of the software industry, >90% of our IP valuation stems from Trade Secrecy of the source code. Open Source is mutually exclusive with Trade Secrecy. This plan would instantly make the various Win32 clones (e.g. http//www winehq.com) an order of magnitude more capable.

More compelling stuff from Microsoft:

2. Innovating, Creating New IP

(Re-)recognize that we are an IP company and that in our networked world, functionality delivered via protocols is steadily replacing functionality which was once delivered via APIs Thus, innovation must occur both internal to our products, but also between computers.

Windows clients must always be able to communicate with Linux servers (and vice-versa). However, there MUST be additional value created when a Windows machine is touching another Windows machine. NOT doing this is akin to giving away the Win32 APIs. Every group defining protocols needs to remember this.

Also:

We must innovate and keep our great advancements to ourselves. The fine balance between protecting/financing our innovations and interoperability will get more difficult overtime But, it is relatively easy today.

Notice the following:

4. Compete with Linux Head-On
BED marketing is currently making the transition towards engaging Linux as a tier-1 competitor in the server & client markets. There are still some decisions to be made here (and headcounts to fill) to ensure that on a tactical basis, NT out markets Linux Some of the core deliverables include white papers, benchmarks, etc. More peripheral questions / issues include reclaiming retail shelf-space from Linux, etc We need engagement throughout the company (e g, retail) on this. Finally, getting the word out on NT’s architectural advantages over Linux is an imperative.

Then it says:

Open Source development is the greatest cloning machine of all time. Consequently, we must recognize that “Trade Secrecy” of source code will provide increasingly minimal protection over time and that aggressive patent procurement is our only investment defense. Additionally, strong patent procurement is a key enabler which allows us to publish more of our source code to leverage evangelization benefits (the patent application process is, in a manner of speaking, a form of source publication)

Initiatives (NOT discussed further in this paper) are underway to understand the options in this space.

“The following are all underway,” eh? What would that be? Those lawsuits Jim Allchin spoke about [1, 2]?

“The two [Halloween] documents in here from Vinod are the ones I want the board to see.”
      –Bill Gates
It is worth remembering that all these documents are spread with Bill Gates’ oversight and endorsement, just like the AstroTurfing which he loves. At the time, when these documents leaked, Microsoft tried to portray the AstroTurf as an act it had nothing to do with; a lead participant, James Plamondon, insistingly denied this, saying that Bill Gates was a supporter of the tactics all along. His colleague Marshall Goldberg confirmed this in an internal presentation.

Likewise, when it comes to the Halloween Documents, Microsoft tried to dismiss this as “an engineer’s individual assessment of the market at one point in time.” The exhibits clearly show Bill Gates distributing this material quite enthusiastically to chief people at Microsoft. It means that Microsoft simply lied to save face.

At the end of the document we find out what’s already “underway” at Microsoft:

The following are all underway:

1. Ramp-up / staff Linux competitive marketing efforts.
2. Ramp-up source licensing initiatives. DRG/MSDN is the owner for the umbrella but all component teams must begin evaluating what codebases would benefit the platform if they were evangelized via less restrictive licensing.
3. More proactively & aggressive secure patent rights to MSFT innovations that will be significant to the OSS fight. Development teams must shift mindsets from source code secrecy towards patents as the primary means of securing our key innovations.
4 [on-going] Create new IP in base scenarios – file sharing, management, etc.

“Ramp-up / staff Linux competitive marketing efforts” sounds like potential reference to more AstroTurfing, which is a reality. The remainder has a lot to do with patents, which we now know are used against GNU/Linux. The document as a whole is worth reading, assuming one has the patience. It’s properly formatted below.


Appendix: Comes vs. Microsoft – exhibit PX08175, as text


Microsoft Confidential

Our Linux Strategy
VinodV
5/19/99

Microsoft Confidential; © 1999, All Rights Reserved Do Not Forward without Approval from Author.

Introduction
This document discusses both our strategy and our plans for competing with Linux. To understand the strategy it is important to remember the following:
- Linux isn’t most importantly a product/feature; it’s a philosophy change
- Linux has no new specific features to co-opt
– Unlike the NC: the NC touted TCO benefits, and thus we introduced ZAK/ZAW
– Unlike the Internet: the Internet was loaded with technology changes, and thus we invested in browser technologies and reexamined all our existing products

The core strategic thrust of Linux is NOT an attack against some product/feature weakness of Microsoft. It’s an attack at the base of the commercial software industry – Intellectual Property.

Previous threats to Microsoft (the NC, Java, etc.) have been about replacing Microsoft’s IP with another company’s IP that claimed some new benefit (e.g. TCO). What differentiates Linux is that OSS attempts to extricate Intellectual Property all together.

Since many people have proposed how to deal with Linux, we thought it might be helpful as a thought exercise to quickly examine some of the alternative strategies we could consider. For each we include the “fatal flaws” that make them untenable.

1. Embrace Linux: MS APIs / Linux kernel — release an MS version of Linux and/or release key MSFT platform technologies on Linux (e.g. parts of Win32, app server, etc.)

Pros: Ride the wave & try to evangelize Win32
Cons: Dramatically evangelizes Linux & may risk MSFT IP due to GPL license issues
Fatal Flaw:
– Impossible to make this revenue neutral with Windows biz.
– Doesn’t protect the “crown jewel” IP from being targeted at a later date

2. Embrace Linux: Linux APIs / MS Kernel — try to get Linux API’s on Windows — get more hardcore about POSIX subsystem on NT to capture Linux app base

Pros: Capture some of the Linux dev mindshare by making it easy to bring Linux apps to NT
Cons: Hurts Win32 evangelization
Fatal Flaw:
– There are no Linux apps that we covet.

3. Embrace Open Source: Publish NT Source — release NT source code under a license similar to Sun’s community source license

Pros: Try to capture Linux’s evangelization benefits by publishing NT source
Cons: ISVs getting hooked on undocumented API’s, support costs, etc.
Fatal Flaw:
– Microsoft is an IP company. Like the rest of the software industry, >90% of our IP valuation stems from Trade Secrecy of the source code. Open Source is mutually exclusive with Trade Secrecy. This plan would instantly make the various Win32 clones (e.g. http//www winehq.com) an order of magnitude more capable.

4. Lower the price of Windows — release older / stripped versions of the OS for at lower price

Pros: Try to capture people who use Linux due to price sensitivity

Page 1

Plaintiff’s Exhibit
8175
Comes V. Microsoft

MS-CC-MDL 000000202974
HIGHLY CONFIDENTIAL


Microsoft Confidential

Cons: Building new versions of windows. Long-term support headaches Cannibalization of the “real” windows?
Fatal Flaw:
– Assumes that price is the primary motivator for Linux usage. This has not been borne out in reality.

What are the core strategies that we are going to pursue?

1. Fix our Sins

Linux’s most immediate contribution is highlighting our sins in some key market segments. There are already (large) investments in the company spun up to deal with our most pressing concerns such as reliability; remote admin; etc so we won’t spend further time describing them here. It is critical that we make progress in these areas

Currently, Linux gains horsepower due to VASTLY exaggerated negative claims about our abilities and corresponding VASTLY under reported positive claims about our innovative work. We must reverse the “conventional wisdom” that UNIX is technically superior to NT which is the foundation for Linux marketing. In most ways, NT is superior & the technical message needs to get out.

2. Innovating, Creating New IP

(Re-)recognize that we are an IP company and that in our networked world, functionality delivered via protocols is steadily replacing functionality which was once delivered via APIs Thus, innovation must occur both internal to our products, but also between computers.

Windows clients must always be able to communicate with Linux servers (and vice-versa). However, there MUST be additional value created when a Windows machine is touching another Windows machine. NOT doing this is akin to giving away the Win32 APIs. Every group defining protocols needs to remember this. Some core initiatives that are excellent demonstrations of this are:

Management – Deep, rich WMI instrumentation is an area where Windows and Win32 apps must excel. In addition to IP boundaries, Linux’s development methodology makes this difficult for Linux to provide leadership in breadth & uniformity of coverage/implementation.

Storage — Rich, structured, remotable, queriable storage dramatically raises the bar versus today’s basic file system functionality. The benefits to client application vendors & server vendors are numerous and well detailed in other presentations.

These areas demonstrate functionality that IT managers — once they’ve tasted it — will (hopefully) find compelling enough to mandate across as many systems within their computing universes as possible. Letting our protocols become commoditized is a recipe for failure. We must innovate and keep our great advancements to ourselves. The fine balance between protecting/financing our innovations and interoperability will get more difficult overtime But, it is relatively easy today.

Outside of protocols we need advancements throughout the system. Advances in file formats (e.g., the disk structure), technology such as security, etc. are areas that are critical for us to innovate. We need to accelerate patenting every invention

3. Form Factor Proliferation
This is a well-discussed area. Obviously PC’s will not be the exclusive center of computing in the near future and this addition to the OS requirements list provides the opening for low innovation competitors such as Linux in. We need to spread our technology everywhere And where we don’t have our OS present, we need to ensure the protocols are not IP latent and in fact open for us to use.

Page 2

MS-CC-MDL 000000202975
HIGHLY CONFIDENTIAL


Microsoft Confidential

4. Compete with Linux Head-On
BED marketing is currently making the transition towards engaging Linux as a tier-1 competitor in the server & client markets. There are still some decisions to be made here (and headcounts to fill) to ensure that on a tactical basis, NT out markets Linux Some of the core deliverables include white papers, benchmarks, etc. More peripheral questions / issues include reclaiming retail shelf-space from Linux, etc We need engagement throughout the company (e g, retail) on this. Finally, getting the word out on NT’s architectural advantages over Linux is an imperative.

5. Getting Credit for the Openness and Availability of our Sources
One of the key lessons learned from the Linux OS is the power of the Open Source model with respect to creating passionate, technically savvy development communities around a body of code. Reclaiming the hobbyist developer / “scratch an itch” developer communities is paramount for us (they were the original “long hairs” who introduced the PC to corporate America). While we may never be able to fully detract from Linux’s energy in this space, it is very important for us to focus our TREMENDOUS developer relations assets into this new “channel.” JimAll presented a plan at the 3yr review that involved a 2-pronged attack on this channel:

a. Depth Licensing — Ramping up full, formal source code licenses to ISVs/IHVs/Corps etc. by at least a factor of 10 vs. today’s efforts.

b. Breadth Licensing — Reorganizing & creating new widely licensed, derivable, redistributable source code bases hosted on web sites targeting specific Win32 developer niche’s (e.g., ResKit level functionality).

6. Securing our Current & Future IP
Once again, the core of the Linux phenomena — and the #1 reason it tries to claim the “glow of inevitability” — is it’s aversion to Intellectual Property (IP). Obviously, in terms of economic effects, IP is on par with motherhood & apple pie in its role in the world economy.

The belief that the “Open Source” pie will eventually gobble up ingredients from all the other pies is more dangerous to us & the software industry than the current Linux product

Open Source development is the greatest cloning machine of all time. Consequently, we must recognize that “Trade Secrecy” of source code will provide increasingly minimal protection over time and that aggressive patent procurement is our only investment defense. Additionally, strong patent procurement is a key enabler which allows us to publish more of our source code to leverage evangelization benefits (the patent application process is, in a manner of speaking, a form of source publication)

Initiatives (NOT discussed further in this paper) are underway to understand the options in this space.

Immediate Next Steps:

The following are all underway:

1. Ramp-up / staff Linux competitive marketing efforts.
2. Ramp-up source licensing initiatives. DRG/MSDN is the owner for the umbrella but all component teams must begin evaluating what codebases would benefit the platform if they were evangelized via less restrictive licensing.
3. More proactively & aggressive secure patent rights to MSFT innovations that will be significant to the OSS fight. Development teams must shift mindsets from source code secrecy towards patents as the primary means of securing our key innovations.
4 [on-going] Create new IP in base scenarios – file sharing, management, etc.

Please direct any questions / discussion to VinodV

Page 3

MS-CC-MDL 000000202976
HIGHLY CONFIDENTIAL

Credit: wallclimber

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2 Comments

  1. Needs Sunlight said,

    August 2, 2009 at 1:14 pm

    Gravatar

    These three points from Comes v Microsoft Plaintiff’s Exhibit 06501 were written in *1998*

    1. OSS projects have achieved “commercial quality”
    2. OSS projects have become large-scale & complex
    3. OSS has a unique development process with unique strengths/weakness

    Note in particular points 1 and 2 were achieved over a decade ago.

    MS has been holding back, undermining and destroying the IT sector for that long. Osama bin Laden can’t even hold a candle to that much destruction when added up in dollars. The body count has to be higher too, if you count MS problems in mission-critical systems and environments.

  2. Jose_X said,

    August 4, 2009 at 1:23 pm

    Gravatar

    I can’t help point out some obvious things.

    A note on mono: it grabbed the best of the two options

    >> Pros: Capture some of the Linux dev mindshare by making it easy to bring Linux apps to NT
    >> Pros: Ride the wave & try to evangelize Win32

    While avoiding the negatives:

    >> Cons: Hurts Win32 evangelization

    and through proxies that sing the glories of Windows over Linux mostly avoids

    >> Cons: Dramatically evangelizes Linux & may risk MSFT IP due to GPL license issues

    Microsoft has to have protocols, API, etc that are difficult to clone and which work better with their software; otherwise, they’d be committing the sin of “giving away the .. APIs”.

    >> Windows clients must always be able to communicate with Linux servers (and vice-versa). However, there MUST be additional value created when a Windows machine is touching another Windows machine. NOT doing this is akin to giving away the Win32 APIs. Every group defining protocols needs to remember this.

    http://www.linuxtoday.com/developer/2009080300335OSMSNT

    >> The fine balance between protecting/financing our innovations and interoperability will get more difficult overtime But, it is relatively easy today.

    The fine balance meant documenting more of their interfaces (EU order) and ECMA/ISO standards, but adding in patents (and still keeping closed source interop issues alive).

    >> Additionally, strong patent procurement is a key enabler which allows us to publish more of our source code to leverage evangelization benefits (the patent application process is, in a manner of speaking, a form of source publication)

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