04.08.20

Gemini version available ♊︎

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 in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

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.

DecorWhat Else is New


  1. Links 24/10/2021: Ceph Boss Sage Weil Resigns and Many GPL Enforcement Stories

    Links for the day



  2. GAFAM-Funded NPR Reports That Facebook Let Millions of People Like Trump Flout the So-called Rules. Not Just “a Few”.

    Guest post by Ryan, reprinted with permission



  3. Some Memes About What Croatia Means to the European Patent Office

    Before we proceed to other countries in the region, let’s not forget or let’s immortalise the role played by Croatia in the EPO (memes are memorable)



  4. Gangster Culture in the EPO

    The EPO‘s Administrative Council was gamed by a gangster from Croatia; today we start the segment of the series which deals with the Balkan region



  5. The EPO’s Overseer/Overseen Collusion — Part XXI: The Balkan League – The Doyen and His “Protégée”

    The EPO‘s circle of corruption in the Balkan region will be the focus of today’s (and upcoming) coverage, showing some of the controversial enablers of Benoît Battistelli and António Campinos, two deeply corrupt French officials who rapidly drive the Office into the ground for personal gain (at Europe’s expense!)



  6. Links 23/10/2021: FreeBSD 12.3 Beta, Wine 6.20, and NuTyX 21.10.0

    Links for the day



  7. IRC Proceedings: Friday, October 22, 2021

    IRC logs for Friday, October 22, 2021



  8. [Meme] [Teaser] Crime Express

    The series about Battistelli's "Strike Regulations" (20 parts thus far) culminates as the next station is the Balkan region



  9. Links 23/10/2021: Star Labs/StarLite, Ventoy 1.0.56

    Links for the day



  10. Gemini on Sourcehut and Further Expansion of Gemini Space

    Gemini protocol is becoming a widely adopted de facto standard for many who want to de-clutter the Internet by moving away from the World Wide Web and HTML (nowadays plagued by JavaScript, CSS, and many bloated frameworks that spy)



  11. Unlawful Regimes Even Hungary and Poland Would Envy

    There’s plenty of news reports about Polish and Hungarian heads of states violating human rights, but never can one find criticism of the EPO’s management doing the same (the mainstream avoids this subject altogether); today we examine how that area of Europe voted on the illegal "Strike Regulations" of Benoît Battistelli



  12. The EPO’s Overseer/Overseen Collusion — Part XX: The Visegrád Group

    The EPO‘s unlawful “Strike Regulations” (which helped Benoît Battistelli and António Campinos illegally crush or repress EPO staff) were supported by only one among 4 Visegrád delegates



  13. [Meme] IBM Has Paid ZDNet to Troll the Community

    Over the past few weeks ZDNet has constantly published courses with the word "master" in their headlines (we caught several examples; a few are shown above); years ago this was common, also in relation to IBM itself; clearly IBM thinks that the word is racially sensitive and offensive only when it's not IBM using the word and nowadays IBM pays ZDNet — sometimes proxying through the Linux Foundation — to relay this self-contradictory message whose objective is to shame programmers, Free software communities etc. (through guilt they can leverage more power and resort to projection tactics, sometimes outright slander which distracts)



  14. [Meme] ILO Designed to Fail: EPO Presidents Cannot be Held Accountable If ILOAT Takes Almost a Decade to Issue a Simple Ruling

    The recent ILOAT ruling (a trivial no-brainer) inadvertently reminds one of the severe weaknesses of ILOAT; what good is a system of accountability that issues rulings on decisions that are barely relevant anymore (or too late to correct)?



  15. Links 22/10/2021: Trump's AGPL Violations and Chrome 95 Released

    Links for the day



  16. [Meme] How Corporate Monopolies Demonise Critics of Their Technically and Legally Problematic 'Products'

    When the technical substance of some criticism stands (defensible based upon evidence), and is increasingly difficult to refute based on facts, make up some fictional issue — a straw man argument — and then respond to that phony issue based on no facts at all



  17. Links 22/10/2021: Global Encryption Day

    Links for the day



  18. [Meme] Speaking the Same Language

    Language inside the EPO is misleading. Francophones Benoît Battistelli and António Campinos casually misuse the word “social”.



  19. António Campinos Thinks Salary Reductions Months Before He Leaves is “Exceptional Social Gesture”

    Just as Benoît Battistelli had a profound misunderstanding of the concept of “social democracy” his mate seems to completely misunderstand what a “social gesture” is (should have asked his father)



  20. IRC Proceedings: Thursday, October 21, 2021

    IRC logs for Thursday, October 21, 2021



  21. Links 21/10/2021: MX Linux 21 and Git Contributors’ Summit in a Nutshell

    Links for the day



  22. [Meme] [Teaser] Miguel de Icaza on CEO of Microsoft GitHub

    Our ongoing series, which is very long, will shed much-needed light on GitHub and its goals (the dark side is a lot darker than people care to realise)



  23. Gemini Protocol and Gemini Space Are Not a Niche; for Techrights, Gemini Means Half a Million Page Requests a Month

    Techrights on gemini:// has become very big and we’ll soon regenerate all the pages (about 37,500 of them) to improve clarity, consistency, and general integrity



  24. 'Satellite States' of EPO Autocrats

    Today we look more closely at how Baltic states were rendered 'voting fodder' by large European states, looking to rubber-stamp new and oppressive measures which disempower the masses



  25. [Meme] Don't Mention 'Brexit' to Team UPC

    It seems perfectly clear that UPC cannot start, contrary to what the EPO‘s António Campinos told the Council last week (lying, as usual) and what the EPO insinuates in Twitter; in fact, a legal challenge to this should be almost trivial



  26. The EPO’s Overseer/Overseen Collusion — Part IXX: The Baltic States

    How unlawful EPO rules were unsurprisingly supported by Benoît Battistelli‘s friends in Baltic states; António Campinos maintained those same unlawful rules and Baltic connections, in effect liaising with offices known for their corruption (convicted officials, too; they did not have diplomatic immunity, unlike Battistelli and Campinos)



  27. Links 21/10/2021: GIMP 2.99.8 Released, Hardware Shortages, Mozilla Crisis

    Links for the day



  28. How Oppressive Governments and Web Monopolists Might Try to Discourage Adoption of Internet Protocols Like Gemini

    Popular movements and even some courageous publications have long been subverted by demonisation tactics, splits along unrelated grounds (such as controversial politics) and — failing that — technical sabotage and censorship; one must familiarise oneself with commonly-recurring themes of social control by altercation



  29. [Meme] Strike Triangulations, Reception Issues

    Financial strangulations for Benoît Battistelli‘s unlawful “Strike Regulations”? The EPO will come to regret 2013…



  30. [Meme] Is Saying “No!” to Unlawful Proposals Considered “Impolite”?

    A ‘toxic mix’ of enablers and cowards (who won’t vote negatively on EPO proposals which they know to be unlawful) can serve to show that the EPO isn’t a “social democracy” as Benoît Battistelli liked to call it; it’s just a dictatorship, currently run by the son of a person who actually fought dictatorship


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