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

04.08.20

GitHug – A Guest Article by Thomas Grzybowski

Posted in Deception, Free/Libre Software, Microsoft at 1:22 am by Guest Editorial Team

Losing money in exchange for control

Fake happiness

Summary: “Now, if Azure revenue has increased 72%, but the gross revenue in this category has only increased 25%, that means that the other components, primary GitHub, are actually a substantial negative.”

L

et’s call it “GitHug”, because Microsoft Loves Linux. And Microsoft loves Linux so very much that they have systematically gone about obtaining a grip on almost all of the myriad threads that support the Linux-based software ecosystem. It’s taken years, and billions of dollars, but Linux is worth the investment. A recent article by figosdev: GitHub is Moving the Free Software Movement Into “Check” has detailed the vast and deep dependency that GNU/Linux distributions, development software, and applications software already have upon Github. What is going on here?

First, let’s take a quick look at the investments we are talking about:

From the Microsoft Annual Report, 2019, https://www.microsoft.com/investor/reports/ar19/index.html

GitHub, Inc.

On October 25, 2018, we acquired GitHub, Inc. (“GitHub”), a software development platform, in a $7.5 billion stock transaction (inclusive of total cash payments of $1.3 billion in respect of vested GitHub equity awards and an indemnity escrow). …

The allocation of the purchase price to goodwill was completed as of June 30, 2019. The major classes of assets and liabilities to which we allocated the purchase price were as follows:

(In millions)
Cash, cash equivalents, and short-term investments $ 234
Goodwill 5,497
Intangible assets 1,267
Other assets 143
Other liabilities (217)
Total $ 6,924

Note this amazing fact – Microsoft credits only 143 Million dollars to “other”, presumably tangible assets, and 5.5 Billion Dollars to “Goodwill”. That is indeed quite a lot of “Goodwill” – but where is real value derived from the Goodwilling? I’ll take a look at that later. First, here are a few more very interesting facts from the same Annual Report:

First, the note that “Server products and cloud services revenue, including GitHub, increased 25%, driven by Azure growth of 72%.” Now, if Azure revenue has increased 72%, but the gross revenue in this category has only increased 25%, that means that the other components, primary GitHub, are actually a substantial negative. Here are some of the negatives, costs, which are listed:

  • “Research and development expenses increased $2.2 billion or 15%, driven by investments in cloud and artificial intelligence (“AI”) engineering, Gaming, LinkedIn, and GitHub.”
  • “Sales and marketing expenses increased $744 million or 4%, driven by investments in commercial sales capacity, LinkedIn, and GitHub,”
  • “Operating expenses increased $2.4 billion or 22%, driven by investments in cloud and AI engineering, GitHub, and commercial sales capacity.”

Clearly, Microsoft is carrying very substantial annual costs associated with the promotion and maintenance of GitHub.

Just one other note regarding the great Love that Microsoft has for Linux: The amount that Microsoft pays annually for Platinum membership in the Linux Foundation is $500,000. per year.

Therefore, we are talking hundreds of thousands, no millions, no Billions of dollars that Microsoft is spending in the arena of Linux and Free and Open Source Software, primarily upon GitHub. This is absolutely not charity. Microsoft is a profit-making corporation, and is legally responsible for maximizing shareholder value and shorter-term financial returns. So, what is their rational to justify these tremendous expenses?

“This kind of positive feedback loop, the “Network Effect”, is notorious for creating vendor lock-in. Microsoft is of course a master in this tactic.”Microsoft explains: “In a world where every company is a digital company, developers will play an increasingly vital role in value creation and growth across every industry, and GitHub is their home. Since our acquisition of GitHub last fall, growth has accelerated. Today it’s used by more than 40 million developers.”

Now we have a glimpse of what Microsoft is after: 40 million developers, and growing. As more people increasingly turn to Github for development and code resources, the value to Microsoft of each GitHub user (and secondarily to each user) increases in a geometric function as each new user joins in. This kind of positive feedback loop, the “Network Effect”, is notorious for creating vendor lock-in. Microsoft is of course a master in this tactic.

Further, more specifically, where is the value derived? Microsoft is investing heavily in expanding it’s control over the myriad threads that support the Linux-based software ecosystem, and it is a truism that functional control is tantamount to ownership. But what monetary gain can they then wring out of this control, this partial ownership?

“Also importantly, the source code and other content itself physically resides on Microsoft’s servers.”Perhaps most importantly, Microsoft gains a real-time handle on the activities and relative activities of tens of millions of identifiable developers along with the many more interested parties who frequent their GitHub site. This surveillance and intelligence-gathering is invaluable in the creation and assessment of their corporate strategies.

Also importantly, the source code and other content itself physically resides on Microsoft’s servers. These materials are then open to easy and extensive analysis for technical and strategic information.

There are a number of other real and potential benefits emerging from having the source code and other content itself physically reside on Microsoft’s servers which Microsoft can use at its discretion:

  1. Censorship power (the implicit threat thereof).

  2. Blackmail – the implicit or explicit threat of loss of service or censorship.

  3. Manipulatively granting some projects preferential treatment or services.

  4. Behavior manipulation and opinion modification – through GitHub site messaging and marketing.

  5. Outright (direct) monetization.

The surveillance aspect is probably of the most valuable to Microsoft right now; and it is also the most difficult us to get a handle on. We do not know how they are using what information to develop and adjust their corporate strategies. This is the realm of business secrets.

Censorship will be a tricky one for them. Currently there are incidents where they just pass the responsibility right back to the originator of the request. Potentially they can use the threat strategically, perhaps though proxies – which leads us to “blackmail”.

“Censorship will be a tricky one for them. Currently there are incidents where they just pass the responsibility right back to the originator of the request.”As for “preferred services”, that’s already part of the deal – you have to register your personal information with GitHub in order to get the full service. And they also sell a range of services to businesses. And in fact it is documented that there are areas of functionality where, if you have not registered with them, you can run into obscure “technical” difficulties (I have).

Directly charging people for more basic services on GitHub is probably a ways off, since they are now focused on roping people in. But when GiHub has a solid monopoly in its domain this becomes a distinct possibility.

Because Microsoft loves Linux so very much, they have taken a hug on the entire GNU/Linux ecosystem, and on us. As the hug becomes tighter, it will likely become a more abusive relationship. We will be shaken.


Authored by Thomas Grzybowski | Attribution-ShareAlike, CC BY-SA

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. hashsecure said,

    April 8, 2020 at 1:44 am

    Gravatar

    The Microsoft released a commemorative video to Windows 10 , celebrating the operating system version hit the barrier of 1 billion activations. The clip was posted on the Instagram profile of Panos Panay, head of the company’s Windows devices division. : https://www.hashsecure.in/2020/03/windows-10-new-looks-whats-new-in-the-windows-10-update-2020.html

  2. hashsecure said,

    April 8, 2020 at 1:54 am

    Gravatar


    Download Free 7 PC Software For Change or Modification Your Voice – 2020

    Do you want to change your voice from male voice to female voice? if yes, read this article.
    In this guide, we offer a list of the best PC or Windows 10 Software for Change or modification your voice easily. AV Voice Changer AV Voice Changer is one of the best tools of its kind and can be used to disguise someone’s identity during online conversations and to create recordings with a distorted voice. The user interface allows you to customize everyone.

    Read more now and download the free full version of the best basic Voice alter or changer software or app for your PC.

What Else is New


  1. The EPO Became a Very Radical Institution

    Projection tactics are doomed to say more about the people who utilise them than about anybody else; the EPO has become so autocratic and corrupt that corruption is seen as normal and workers who explain this corruption are framed as "irrational" or "crazy" or "radical"



  2. IRC Proceedings: Wednesday, May 27, 2020

    IRC logs for Wednesday, May 27, 2020



  3. Allegations That Microsoft Will Ruin Besieged Clinics and Hospitals to Retaliate Against Those Who Name the Culprit

    With a broader picture coming into view, as per the above index, we're starting to wrap up the series while issuing a call for more stories and eyewitness testimonies, exposing the nature of attacks on hospitals (those almost always target Microsoft and others' proprietary software, which is technically unfit for purpose)



  4. Microsoft Has Ideas...

    Based on the pattern of media coverage, composed by Microsoft MVPs and Microsoft-affiliated blogs/sites, confusing the public about the meaning of GNU/Linux is reminiscent of an "Extend" phase



  5. ZDNet Proves Our Point by Doing Not a Single Article About Linux (RC7), Only About Linus and Windows Clickbait Junk

    It seems abundantly clear that nobody wants to cover the actual news about Linux and instead it’s all about which PC Linus Torvalds is using (gossip/tabloid); ZDNet‘s latest two articles are an example of this…



  6. UPC Lies That Make One Laugh...

    IP Kat and Bristows (overlaps exist) are still pretending that the UPC is coming because reality doesn’t seem to matter anymore, only self-serving agenda



  7. Canonical Continues to Help Promote Windows Instead of GNU/Linux or Ubuntu

    Thrice in the past week alone Canonical used the official “Ubuntu Blog” to help Microsoft instead of GNU/Linux and it is part of a disturbing trend which lends credibility to jokes or rumours about a Microsoft takeover; it's not like many people use this thing, either (Canonical helps Microsoft shore up a dying/languishing EEE attempt)



  8. Links 27/5/2020: CoreOS Container Linux Reaches Its End-Of-Life, 2020 GNOME Foundation Elections Coming

    Links for the day



  9. IRC Proceedings: Tuesday, May 26, 2020

    IRC logs for Tuesday, May 26, 2020



  10. GNEW Seedlings vs. Free Software Deforestation

    “The idea of the GNEW Project really is about keeping the goals of the GNU Project alive — hopefully, they won’t destroy or co-opt too much of the GNU Project, that people like the Hyperbola devs can’t fix it with BSD.”



  11. Joi Ito Already Admitted on the Record That Bill Gates Had Paid MIT Through Jeffrey Epstein

    An important exhibit for the accurate historical record (because MIT has been trying to deny truth itself)



  12. It's Convenient to Call All Your Critics Nuts and/or Jealous

    Bill Gates antagonists are not motivated by hatred or jealousy but a sense of injustice; spoiled brats who break the law aren’t a source of envy any more than mass murderers are subject of admiration



  13. Real History of Microsoft and How It Became 'Successful'

    New video that contains a portion about the history of Microsoft -- the part paid-for 'journalists' (paid by Microsoft and Bill Gates) rarely or never speak about



  14. Hostility and Aggression Towards Staff That Does Not Use Windows After Windows Takes Entire Hospital Down

    Microsoft Windows, with NSA back doors, continues to take hospitals offline (with records copied by criminals if not stolen by effectively locking the originals out of reach for ransom money); but guess who’s being punished for it…



  15. They Came, They Saw, We Died...

    It cannot be overstated that we're under attack (or a "Jihad" against Linux as Bill Gates himself put it) and failing to act upon it will be costly as time may be running out and our groups are being 'bought off' by Microsoft in rapid succession, as per the plan/strategy



  16. The GitHub Takeover Was an Extension of Microsoft's War on GPL/Copyleft (Because Sharing Code to Anyone But Microsoft is 'Piracy')

    Licences that make it easier for Microsoft to 'steal' (or a lot harder for Free software to compete against proprietary software) are still being promoted by Microsoft; its GitHub tentacles (see GitHub's logo) further contribute to this agenda



  17. ZDNet is Totally a Microsoft Propaganda Machine

    The site ZDNet has become worse than useless; it lies, defames and launders the reputation of famous criminals (that's the business model these days)



  18. When Microsoft's Mask Falls (or When Times Are Rough)

    Microsoft loves Linux in the same sense that cats love mice (they might play with them until they get hungry)



  19. Careers in Free Software Aren't Careers in the Traditional Sense

    With historic unemployment rates and people 'stranded' inside their homes there's still demand and need for technology; these times of adaptation present an opportunity for Software Freedom



  20. Embrace, Extend, Extinguish 2020 Edition

    Embrace, Extend, Extinguish (E.E.E.) is alive and well, but the corrupt (paid by Microsoft) media isn't talking about it anymore; in fact, it actively cheers and encourages people/companies to enter the trap



  21. Links 26/5/2020: SHIFT13mi GNU/Linux Tablet, Linux Kodachi 7.0 and Some Qt Releases

    Links for the day



  22. EPO Propaganda on Steroids (or on EPO)

    What EPO management is saying and what is actually happening



  23. Breton (EU) 'Joins' Team UPC to Help His Buddy Battistelli... Again

    As expected, Breton acts as little but an EPO tool, looking to prop up supremacy of patent litigation over science and innovation



  24. Removing Free/Libre Software as an Inadequate Response to Microsoft Windows (With Back Doors) Getting Compromised, Killing People

    GNU/Linux takes the blame (in a sense) for incidents that are purely the fault of Microsoft and its deficient software with deliberate back doors; it's believed that this boils down to opportunistic retaliation against those looking for a solution to the problem (or merely speaking about the problem)



  25. IRC Proceedings: Monday, May 25, 2020

    IRC logs for Monday, May 25, 2020



  26. Under Distributed Denial of Service Attacks Lately, But We're Too Robust For Those

    Efforts to take Techrights offline have been ramped up lately; but it's not working and it hardly even distracts us from publishing



  27. The Art of Giving: Why Free Software Will Inevitably Survive Attacks Against It

    Societies that share and look after their peers/neighbours will always be better off than predatory societies, which breed exploitation, distrust, discord and eventually systemic collapse



  28. 'Journalism' in 2020: Far More Articles About What Computer Linus Torvalds Bought Than About Linux Releases

    Yesterday's (or late Sunday's) Linux announcement (RC7) is symptomatic of a broader issue we've long spoken about; it restricts people's ability to express an opinion, which can cloud any meritorious and substantial debate about technical matters journalists cannot grasp or comment on (it takes more effort and research)



  29. Links 25/5/2020: Wrapland Redone, DebConf20 Plans, Many More Games

    Links for the day



  30. Media Covers WSL Like People Actually Use This Trash (a Failed Distro Which Only Works With Windows)

    Lots of abundantly redundant puff pieces have appeared in paid-for (by Microsoft) media this past week covering WSL/2, but that's grossly disproportional to the people who care and actually use those types of things (because money talks, not technical substance)


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

Recent Posts