01.09.09
Posted in America, Bill Gates, Intellectual Monopoly, Law, Patents at 8:08 am by Dr. Roy Schestowitz
AS WE HASTILY ACCUMULATE AND ORGANISE antitrust material (almost toiling), we find ourselves unable to keep up with the news, but here are some read-worthy items on intellectual monopolies, without particular emphasis on just software.
Philosophy
It is heartening to find more and more critics of our intellectual property regime, partly as a result of growing knowledge but more importantly, the growing critical reaction to the extreme excesses of the application of the law. A new voice for me is that of Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC. whose book, THE CONSERVATIVE NANNY STATE; How the Wealthy Use the Government to Stay Rich and Get Richer, is available for download on line link here under a Creative Commons license. The book is about much more than IP, as the subtitle indicates, but this review focuses on the IP issues Baker covers. He calls the chapter, “Bill Gates Welfare Mom: How Government Patent and Copyright Monopolies Enrich the Rich and Distort the Economy”.
He begins by examining the richest man in the world, Bill Gates, and Microsoft, noting that it was not Gates hard work or brilliance, or the superiority of his software, but his government provided monopoly based on IP law that made him today’s Croesus.
An anonymous reader called our attention to a comment reposting some fantastic thinking on the dangerous trend of believing we can own, sell or steal ideas.
Light at the end of the tunnel: Will tough times bring on boom times for patent acquirers?
That’s what Joff Wild concludes in another article on this subject. Here’s the equation: Recession equals (patent-owning) companies going out of business equals auctioning off of these assets as companies try to raise cash to pay creditors equals more opportunities to acquire patents (both from bankruptcies and solvent companies that want to raise cash).
While this may be a patent troll/NPE’s (Non-Practicing Entity) modus operandi for building up a portfolio, any company that develops and sells products, seeks new technologies, and is willing to spend cash can do the same. According to Wild, it’s a great way to save R&D time and money.
Yes, tough times can sink a business. But just like in any other enterprise, IP investors can look for the silver lining – opportunities to turn financial turmoil to financial success.
Patent Trolling
Things are not helped by a Commission that often seems to hold contradictory views on IP (although Commissioners are set t be replaced in June 2009). What could change things is if European leaders get the bit between their teeth, as the seemed to in 2007. With so many other things to worry about, however, you have to wonder whether there will be time for patents in 2009.
[I]t does look like the Federal Circuit is at least somewhat paying attention to this issue, and recently transferred a patent infringement lawsuit out of Marshall, Texas, to Ohio, after noting that Ohio was “far more convenient.”
Reform Needed
While it’s taken quite some time, the EFF has had considerable success with its project to bust ten awful patents. The latest is that the USPTO has agreed to re-examine a patent from Seer Systems involving online music.
“Patent busting is a waste of time: even when successful, it takes too long [...] Need root and branch reform, not rollback,” writes Glyn Moody. The same goes for Linux Defenders [1, 2, 3, 4, 5, 6].
More about the case which we covered 2 days ago:
The last two years have seen plenty of patent litigation among storage companies, including a battle between Sun Microsystems and NetApp Inc. that is still ongoing. However, other patent lawsuits that have made a splash in the storage industry, such as Quantum’s suit against Riverbed, have been settled out of court or otherwise fizzled like this one. In the Sun case, at least one of the patents cited by NetApp in suing Sun has been taken off the table by the U.S. Patent and Trademark Office due to similar enforcement issues. So far the lawsuits are looking like key talking points for those who argue the patent system in general badly needs reform.
Overall, it’s still a problematic situation. █
“They [EPO examiners] claim that the organisation
is decentralising and focusing on granting as many patents
as possible to gain financially from fees generated.”
—Expatica, European Patent Office staff on strike
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Posted in Europe, Free/Libre Software, Novell at 7:48 am by Dr. Roy Schestowitz
SOME OF US saw this happening in India [1, 2, 3, 4] and we’ve already voiced concerns about FOSDEM as well. It turns out we’re now alone. Here is a formal letter of complaint about Novell’s sponsorship of FOSDEM 2009:
The community is very important, and that is the reason why it shouldn’t blandly (pun intended) accept money from an element which has “bought” its way into the community with “dirty” money, using it as a sort of cheap good-will shop to increase it’s leverage in it. This is particularly bad as it is a close partner of a certain monopolist software company which has been trying to kill Free Software for over a decade.
[...]
Instead of making a single effort to calm the ocean waters, by rejecting community-dividing patent agreements, by enticing their top engineers to write community embracing comments instead of further dividing the community with extremely hostile comments (that apparently forget years of bad blood against the Free Software bore by Microsoft and incited upon it’s partner networks). Just notice how Novell doesn’t do a single action in this direction, but instead keeps announcing more and more Microsoft integration and support. What’s wrong with this picture?
In conclusion, please tell us how much do you need the community to help you, with hard cash, in order to replace Novell’s sad contribution. I’m sure that given a goal we’ll meet it, if not for 2009, then surely for 2010.
Here’s to a great FOSDEM’09 without proprietary software sponsors!
Maybe it’s a little bit like OSCON and OSBC. Those who accept Microsoft or Novell money are causing damage to their own conference/symposium. █
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Posted in Apple, ISO, Microsoft, Open XML, OpenDocument at 5:59 am by Dr. Roy Schestowitz
IN response to this previous post about ODF support in AbiWord, one reader wrote: “iWork 09 have no support yet! shame on Apple!”
Although I’ve responded to this personally, I also sought points of interest in an old Microsoft-Apple engagement, which is similar to that of Microsoft-Corel and Microsoft-Novell, both being cases of companies that sold out to Microsoft and supported OOXML [1, 2].
“Steve Jobs essentially promotes duopoly with Microsoft on the desktop.”We’re deep-linking to a YouTube video here. Watch Steve Jobs saying (back in 1997) that “Apple plus Microsoft equals 100% of the desktop computer market. And so, whatever Apple and Microsoft agree to do, it’s a standard.”
The head of the Open Source Initiative sort of accused Novell of helping Microsoft create "Monopoly 2.0" (or duopoly), so the video above tickles a nerve. Steve Jobs essentially promotes duopoly with Microsoft on the desktop. He also ignores the existence of GNU/Linux (Apple always ignores it, to this date) and other operating systems from that time.
There was a similar incident where browser duopoly got promote by Jobs, who pretended that only Safari and Internet Explorer would exist. Apple also pushed Safari installations, slipping them by the back door (iTunes), just like malware writers typically do. In both cases, Mozilla complained publicly.
Apple’s treatment of OOXML is a subject that we covered before [1, 2] and there was a note about ODF as well. Microsoft actually cited Apple (repeatedly even) as “supporter of OOXML.”
Bob Sutor has meanwhile put ISO in the trashcan for being coprruptible. He totally ignores its existence. ODF, which is maintained by OASIS, will soon have this “ODF Congres” meeting in Utrecht (The Netherlands). ODF is where the world is going. █
“ISO is dead for software standards. Do you need an official funeral?”
–Benjamin Henrion, FFII
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01.08.09
Posted in IRC Logs at 10:09 pm by Dr. Roy Schestowitz
GNU/Linux
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No, if Microsoft really wants to make its customers happy, they should do what my friend Jason Perlow suggests, “since Windows 7 is essentially a performance and usability fix for a defective product, I’m of the increasing opinion that a Windows 7 upgrade should be free to anyone who was conned into buying Windows Vista.”
You know, he has a good point. While I personally think you’d be a lot better off with buying a new Mac or moving over to Fedora, openSUSE or Ubuntu, if you still want to stick with Windows even after suffering with Vista, Microsoft should give you a copy of Windows 7 for free. After all, haven’t you suffered enough?
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As always, 2008 proved to be an interesting year, with great progress in useful software that made our systems better. Of course, there were some of the usual conflicts—patent woes, project politics, and arguments over freedom—but overall, the pace of free software progress stayed on its upwardly increasing trend. 2008 was a year that saw the end of SCO—or not—the rise of Linux-based “netbooks”, multiple excellent distribution releases, more phones and embedded devices based on Linux, as well as major releases of software we will be using for years (X.org, Python, KDE, …). We look forward to seeing what 2009—and beyond!—will bring.
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This is how you install and update software on Windows:
1. Open a web browser.
2. Download an executable file from an (often un-verified) source.
3. Press next, next, next, next, next, next, next, next, finish.
4. Launch your software.
5. Wait for each individual piece of software to nag you about the latest update. (”Logitech is going to look for updates…,” “Adobe PDF Reader version 8.4 is available. Please install it now,” “QuickTime needs an update (hey, mind if we sneak Safari in there, too? *wink*)”)
On Linux, on the other hand, it works something like this:
1. Open Add/Remove programs.
2. Press a check mark and hit apply.
3. Launch your software.
4. Sit back as your software is automatically updated.
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Linux support and documentation sites are a dime a dozen — and some aren’t worth much more than that. Here are a few sites that really give you your money’s worth . . . or at least they would, if most of the content wasn’t already free.
This certainly isn’t a complete list of quality online Linux support resources. Think of it as a snapshot of some of my current favorites; even if these don’t deliver what you need, they at least show you what to expect when you go looking for other, similar, Linux support sites.
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12 users can work on one computer : surfing, mailing or office jobs.
Needs only 410Watt. With Debian or Ubuntu Os and the newest software as Firefox 3 ,Openoffice 3.0 and Gimp.
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Several months ago, I posted here a rather geeky tip on how to turn your Linux box into an alarm clock using a Python script. This time, I’ll keep it simple by showing to you some free and open-source programs that you can easily install and use to make your Linux desktop as an alternative or shall I say an improvised alarm clock.
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Linux Australia is undergoing its annual election process; if you’re a member be sure to register your vote to further the cause of Linux in 2009! (Plus! iTWire columnist nominates!)
Linux Australia is the peak body for Linux User Groups (LUGs) around Australia. This is a total membership of some 5,000 users, developers, students and just generally passionate Linuxphiles.
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HyperSpace
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HyperSpace and Windows can’t run at the same time, but HyperSpace could still act just like new quick start options from Lenovo and Sony, which load a small subset of applications into a Linux-based environment for the times when a user doesn’t need the full firepower of Windows and Windows apps.
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If ultraportables were last year’s big surprise success for GNU/Linux, one of the potentially exciting technologies for this year is the instant-on pre-operating system that loads in seconds when you power up a desktop or portable. DeviceVM’s Splashtop is probably the best known example. These are highly relevant to the free software world, since such instant-on systems are usually based on GNU/Linux, and once people start trying them out, they may simply stay there using the free software apps available, rather than wait minutes for the full glory of Windows Vista to chunder into its vitiated life.
[...]
The last point is the interesting one. Does Phoenix hope to get away without respecting the GNU GPL?
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Cisco
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While lawyers debate the merits of the FSF’s suit against Cisco, open source developers may be asking themselves how they can make their views heard.
Here’s an idea. Boycott Cisco’s contest.
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Cisco Systems Inc. has claimed that international interest in its recently launched contest for router-centric application development has been so strong that it must extend the first-phase deadline from Jan. 12 to Feb. 27.
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Distributions
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Puppy Linux is an interesting Linux distribution which offers multiple features, despite of its low file size (around 99 MB). An average computer user will find enough flexibility and an increased speed during the execution of common tasks like web browsing, text processing, image editing and more.
Puppy Linux integrates many simple to use applications useful for office related tasks, multimedia playback, gaming and networking. It has many installation options too.
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Overall, gOS represents an intriguing Ubuntu re-spin. Its most significant contribution will probably be its use as a proof-of-concept platform for netbooks, netpads, and MIDs intended to run mostly web-based applications — what might be called mobile “cloud computing” devices.
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If you’re a Linux enthusiast, you have probably heard of SimplyMEPIS. It is a Debian-based distribution, aiming at being simple and usable out of the box. Currently, version 7.0 is available to the users, with advanced betas of version 8.0 getting ever more ready toward the release.
[...]
SimplyMEPIS is a nice distro. It’s neither spectacular nor catastrophic. It sits somewhere in the middle between very simple and very un-simple distros. Compared to Ubuntu or SUSE, it does lag somewhat behind.
The greatest disappointment are the bleak live session and the clumsy network support, which could have been so easily avoided. On the other hand, it does come with lots of goodies pre-baked, like Flash or MP3 codecs. When it comes to configurations, the layout of menus and the wording used are not very intuitive. Yet, it is fast and good-looking.
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I like the idea of regional governments offering a personlized, free operating system based on a well-established distribution. MoLinux doesn’t dilute the Ubuntu pool so much as uses it as a base upon which to improve.
The introductory window is something I’d like to see in Ubuntu proper, and I’m pretty sure the idea has been suggested before. That’s the beauty of open-source. Nothing is stopping someone from translating that tutorial and tossing it back upstream.
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Devices/Embedded
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At CES, fabless chip-maker Mindspeed Technologies will demonstrate a prototype of a consumer DLNA router that combines its Comcerto 100 broadband processor with Wind River’s Platform for Consumer Devices, Linux Edition. The media sharing demonstration will also feature DigiOn’s DiXiM Media Server (DMS), says Mindpeed.
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Sub-notebooks
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The netbook category is posing a challenge for Microsoft, the biggest software group, as manufacturers turn to alternatives to its Windows operating system, writes Chris Nuttall.
To help cut costs, the free Linux operating system is featured in many products, while the use of flash memory rather than hard drives along with ‘virtualisation’ techniques means that Windows is being bypassed in others.
Consumers are beginning to associate netbooks with “instant-on” features, which mean that they can be used in a few seconds rather than waiting a few minutes for Windows to be booted.
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It appears that EMTEC’s new Gdium netbook is ready for prime-time, or in this case, ready for display at CES. We went hands-on with a non-functioning prototype of the Gdium last August at IFA 2008 and now have pictures and specs for what appears to be the final product.
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eRacks Open Source Systems is now offering Asus, MSI, and Acer Netbooks preinstalled with Ubuntu or Fedora Linux. eRacks’ netbooks use Intel’s new Atom processor and are smaller, lighter, and more portable than laptops. Netbooks are also significantly less expensive but can easily handle the daily tasks like web-browsing, email, writing documents and spreadsheets. Other vendors sell netbooks with a simplified version of Linux, such as Linpus, but eRacks goes the extra step and configures the fully functional Linux operating system on its netbooks.
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So, the season of giving has just come and gone, and you’ve received a Linux-based netbook—the popular new class of ultra-cheap, ultra-portable computer. By definition, netbooks are very limited in what they can do; they’re primary meant for accessing the web as well as some moderate office and multimedia use. Their low-speed processor and minimal memory means that they’re just not suited for more intensive applications like gaming or video editing.
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It is being called the SideArm 2 and it will, depending upon the needs of the user, support either Windows Vista, Windows XP or Linux.
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Phones
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Qualcomm said today it is running Google’s Android platform on its Snapdragon chipset designed for netbooks and mobile Internet devices. This isn’t earth-shattering since Snapgragon is an ARM-based chip, and another Qualcomm ARM-based chip powers the G1 Android phone. Qualcomm is also a big Android backer through the Open Handset Alliance.
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Motorola is readying a rugged, weather-resistant 3G HSDPA clamshell phone for ATT Mobility. Targeting outdoor enthusiasts, contractors, and (cruel but true) “teenagers,” the Motorola Tundra VA76r runs Linux, and offers aGPS, Bluetooth, a 2-megapixel camera, and Push to Talk (PTT), says Motorola.
F/OSS
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Cfengine is open-source (GPL) software for configuring, monitoring and autonomically maintaining computers. It’s been around for over 15 years and is pretty prevalent among Unix administrators with a lot of machines to manage. The concept around CFengine involves having a centralized configuration that can propagate out to servers a common use would be to develop a template or set of templates that can be used to “build” a server.
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A bare copy of Firefox is a wonderful thing, but when you start stuffing it with add-ons it gets even better.
So what are the best add-ons for power users? Here’s our top 25:
1. All-in-one Sidebar
All-in-one Sidebar makes Firefox’s Sidebar more useful by displaying pretty much anything you might want: source code, downloads, add-ons, page info, entire web pages…
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Open source software is inextricably tied to the idea of “giving it away.” Projects open their code for a number of reasons — to better the codebase, or to allow others to bend an application to their own needs. Maybe the reasons are entirely altruistic, or maybe the altruism is the happy side effect of more project-centric decisions.
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Bug Labs, the system of open source gadget building blocks, is getting pico projector, speaker, 3G, combo Bluetooth/WiFi and a 802.15.4 radio module.
The pico projector and 3G modules are the most interesting of the group. The DLP powered display has a 480×320 resolution, 9 lumens and integrated stereo sound. The 3G modules can be used to send text messages but also place calls and of course, transmit data.
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One of the hot areas in 2008 was cloud computing, and 2009 looks likely to be a year that is equally occupied with the subject. But cloud computing represents something of a conundrum for the open source world.
Much of it is built using free software infrastructure – naturally enough, since it scales well both in terms of performance and cost. But it’s not clear from a legal viewpoint whether providing cloud computing services constitutes distributing software in the sense of traditional free software licences like the GNU GPL.
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The open source network protocol analyzer is backed by support, training, and complementary products from CACE Technologies.
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Medical
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The big open source struggle that began with Linux, moved to enterprise applications and then the consumer space, is now pointed directly at the heads of doctors and hospitals.
VistA, the public record EHR and hospital management software created by the Veterans Administration, is once again an open source movement with word that DSS, its biggest commercial licenser, is switching to the Eclipse Public License.
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Panels, presentations, and Birds of a Feather meetings are certainly the highlight of next month’s Southern California Linux Expo (SCALE), but that’s not the only thing happening during the event. The Demonstrating Open Source Health Care Solutions (DOHCS) conference will be co-located with SCALE and both will get underway on Friday, February 20, 2009.
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Vietnam
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Vietnam’s Ministry of Information and Communications is aiming to migrate the country’s government to open source software by the end of 2010. The ambitious plan, which was reported Wednesday by VietnamNet calls for rapid adoption of open source software and extensive training to ensure that IT staff and government employees will be able to adjust to the change.
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Vietnam’s government is going “100 per cent open source”. VietnamNet Bridge reports that the Vietnam Ministry of Information and Communications has set out an aggressive policy to go “100 per cent open source” by December 31st 2010.
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Graphics
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Thomas Hellström of Tungsten Graphics is preparing to release a new DRM module and Mesa 3D driver that supports some of VIA’s older hardware — and eventually their newest graphics processors.
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The FSF is obviously thrilled by the news. “We couldn’t be happier with this decision, and we’re very grateful to SGI for all their assistance,” the FSF states, “The FSF is committed to ensuring that everyone’s computing tasks can be done with free software and this SGI code plays an important role in scientific and design applications and in the latest desktop environments and games.”
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Annual
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Jack Wallen believes that the new year holds a great deal of promise for the Linux OS and open source software — from an explosion in the mobile arena to large-enterprise scalability to widespread adoption of OpenOffice 3. See if you agree with his outlook.
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First of all I want to wish everybody a happy and successful new year. When I talk about successful I have to highlight the last year. 2008 was a great success for OpenOffice.org. Mid of October OOo 3.0 was released and until now more than 28 million downloads were done. If this isn’t a success!
Beside this event 5 other releases were done for OOo. So there were a lot work for the QA and release teams last year. 6 releases are more than in the past years!
Music/Restriction
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Trent Reznor is making it awfully difficult for me to finish the presentation I’m giving about him next week at MidemNet, because he keeps on doing stuff that should be mentioned in that presentation (I may have to ask the MidemNet folks for more time!).
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We’re so used to hearing the government fall for the industry propaganda about the need for DRM that it’s almost… shocking, to hear that the FTC is even willing to consider the question of whether or not it should be involved in protecting consumers from DRM.
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As pretty much anyone in computer security recognizes, any bit of “secure” computing is only secure for a limited period of time.
Digital Tipping Point: Clip of the Day
Digital Tipping Point: Lena Zuniga, Program Officer for Bellanet 04 (2004)
Digital Tipping Point is a Free software-like project where the raw videos are code. You can assist by participating.
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Posted in Finance, Fraud, Microsoft, Novell at 7:36 pm by Dr. Roy Schestowitz
“Microsoft’s perspective is best reflected by Bob Herbold, Chief Operating Officer, to whom the CFO reports. Bob very sincerely replied, “Bill, everyone is doing it.” My response was that Microsoft is a leader and that others are now seeking to emulate these fraudulent practices they have legitimized. Naturally Bob was not pleased by this perspective and that was our final conversation. A second informal response came when Microsoft asked PR Newswire to stop issuing my press releases.
“Microsoft is PR Newswire’s largest client.”
–Bill Parish
IN THE WORDS of Yogi Berra, it’s deja vu all over again.
US ‘renews’ Microsoft share probe
The US financial watchdog, the Securities and Exchange Commission (SEC), has reopened an insider trading inquiry into Microsoft, reports say.
This is not the first time that the SEC steps in because of allegations of fraud against Microsoft (the company settled to escape this previous blunder). With Satyam all over the headlines for massive fraud, this sure could get interesting. Might Novell be next? The SEC doesn't spot it and it's already seen as fishy by some. █
Related posts:
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Posted in Corel, Microsoft, Novell at 7:26 pm by Dr. Roy Schestowitz
Assimilation strategy
We’ve warned about this all along.
Microsoft might be doing to Novell what it has been doing to VMware and to Yahoo. Speaking of which, earlier today it turned out that Microsoft had just nicked another Yahoo executive (head of Yahoo Korea).
Additionally, let us never forget about Corel, which Microsoft may have turned from a GNU/Linux vendor into a .NET workshop. Sounds familiar? How about Mono?
As for Novell, well… we warned about Microsoft’s influence in its management back in October. It goes in precisely the same direction that we had anticipated right from the start. Novell’s channel chief steps down (or up) only to be replaced by… a “Microsoft veteran”.
The Right Stuff?
Still, Colado’s short stint as channel chief raises some questions.
* Was Colado the right pick as channel chief back in September?
* Did Novell’s channel program move forward under his direction? Apparently yes, according to this insight from CRN. (UPDATE: Apparently, CRN took its story down because it lacked the fact that Colado had been promoted. Sorry about the dead CRN link, folks)
* Will Novell hire a new channel chief to report into Dragoon? It doesn’t sound like it.
But we’ve got an email into Novell requesting comment. (Update, Jan. 7, 2009: Novell says Dragoon is channel chief plus Novell hires Microsoft veteran.)
Yes, let Microsoft manage Novell’s channel. What does that make Novell? Part of Microsoft’s ecosystem? Prior to this, Colado only lasted a few months [1, 2, 3]. Pat Bernard too decided to step down (and quit) this role after a few months in the company [1, 2]. She does not seem to have responded to the Var Guy’s plea for an explanation, or maybe it just never got published. █
“Our partnership with Microsoft continues to expand.”
–Ron Hovsepian, Novell CEO
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Posted in Antitrust, GNU/Linux, Microsoft, OpenOffice, Windows at 2:20 pm by Dr. Roy Schestowitz
Core spin: we’re not dumping, we Offer® Value™
LESS THAN A WEEK ago we unleashed the full text on EDGI (further discussion here and here) which exposes Microsoft’s way of dealing with Free software and GNU/Linux adoption. This merited at least one article in the Indian press which explained what EDGI was.
We decided that it would be constructive to continue sharing information about EDGI; in particular, we are interested in what it looks like from inside Microsoft. This will be — in some way or another — the second part of a series.
In today’s post we have Comes vs Microsoft exhibit px09687 [PDF]. We append the full text at the bottom.
Kevin Johnson, a group vice president at the time (he recently quit), wrote:
Several press reports have characterized these programs as designed solely as an attack on Linux and potentially damaging to our settlement discussions with the European Commission.
To those who believe that Microsoft is paid a lot of money for its software, it’s important to remember that usage does not equate to revenue. As the message from Microsoft puts it:
Software piracy rates run as high as over 90 percent in many developing countries.
The rest can be read below. The emphasis in the recipients side is PR films (i.e. “spinners”), who we already know are rubbing shoulders with journalists whose coverage they police. So much for freedom of speech; there is threat to those who say certain truths, as Dan Geer found out [1, 2, 3]. Neelie Kroes too comes under fire from Microsoft spinners for attempting to restore justice. She did complain about a smear complain — much like those which Peter Quinn can attest to. █
Appendix: Comes vs. Microsoft – exhibit px09687, as text
From: Rodrigo Costa
Sent: Monday, June 02, 2003 1:32 PM
To: Rodrigo Direct Reports Only
Subject: FW: Messaging on the Government and Education Incentive Funds
Attachments: Messaging on the Government and Education Incentive Funds.doc
This is important information
rodrigo
From: Kevin Johnson
Sent: Monday, .June 02, 2003 1:26 PM
To: GMs of Subsidiaries; Worldwide PR leads – Internal; Subsidiary PR Managers; SMSG Leadership Team
Cc: Mark Hill; Jim Desler; Beth Jordan; Erin Brewer; Carlene Chmaj; Stacy Drake McCredy; Dean Katz; Tom Pilla; Larry Cohen; Sandi Baldock
Many of you have likely seen the recent coverage in the International Herald Tribune and the New York Times questioning the validity of the Government and Education incentive program that we have created. I want to assure you that these programs, which were specifically designed with customer benefit in mind, deliver a compelling value proposition in a legal and pro competitive way. The intent of these programs is to provide access to technology for schools and governments in developing countries that otherwise could not afford it. There is nothing wrong with a program that addresses technology access issues while competing fairly with our competitors. We are proud of this program – as ultimately we’re talking about offering a better value proposition to these specific customers and doing it in a responsible and lawful way.
Several press reports have characterized these programs as designed solely as an attack on Linux and potentially damaging to our settlement discussions with the European Commission. I wanted to make sure you had the background on this issue and some talking points if you are asked about this by customers. Attached is a document with the messaging and additional background information. Please refer further press inquiries to Corporate PR. Please let us know if you have any questions.
Regards,
Kevin
Kevin Johnson
Group Vice President
Microsoft WW Sales, Marketing and Services
kevin@microsoft.com
425-705-8081
MS-CC-RN 000001145823
HIGHLY CONFIDENTIAL
Messaging:
- The International Herald Tribune article from earlier this month — For Microsoft, Market Dominance Doesn’t Seen Enough, May 15 – is based largely upon two emails sent within Microsoft. The article does not accurately portray Microsoft’s efforts to address the needs of resource-strapped governments and educational institutions.
- Governments around the world, but particularly in developing countries, have called upon Microsoft to help make computer technology more affordable in settings where budgets for technology access are limited. As an industry leader, Microsoft accepts the responsibility to help enable broad access to technology in governments and schools. We have also seen that absent such assistance governments and schools that may prefer Microsoft software might settle upon free or very low-cost software solutions that are typically billed as “good enough.” In other cases such potential customers may simply use Microsoft software without paying for it. Software piracy rates run as high as over 90 percent in many developing countries.
- Microsoft has set aside a relatively modest fund to assist governments and schools that want to benefit from lawful licenses to Microsoft software. The funds may be used to help defray the cost of purchasing new Windows-based PCs, for training or other services provided by Microsoft or third parties, for curriculum content or in other ways. In every case, the funds provided by Microsoft are less than the royalties Microsoft will receive for use of its products.
- The article selectively and unfairly excerpted a Microsoft email as stating “under NO circumstances lose against Linux.” What the email actually said was “under NO circumstances
lose against Linux before ensuring we have used this program actively and in a smart way.” We of course recognize that customers will choose Linux and other free or low-cost products in many cases. We want to be sure, however, that qualified customers are presented with opportunities to acquire Microsoft software that are tailored to their needs and limited budgets.
- Our legal team has reviewed the program carefully. We are confident it complies fully with European and other competition law. In fact, this program addresses important issues of access to technology, and delivers a compelling value proposition to customers in a legal and pro competitive manner.
Additional Background:
- The program highlighted in the piece was developed last year for the education and government sectors and principally designed for developing countries. Understanding our role as an industry leader and the importance of complying fully with all laws and regulations, our lawyers carefully reviewed this program to account for the competitive sensitivities and global scope. This program is pro-competitive and beneficial to consumers.
- We recognize that the European Union competition principles may limit a company with a successful market position from dropping its price to meet competition if the objective of this practice were to “exclude competition.” from the market. With only one deal in the European Union – with benefits granted to educational purchasers in the context of a
MS-CC-RN 000001145824
HIGHLY CONFIDENTIAL
government-sponsored IT program — we have conducted this program in a way that could not be construed at all as exclusionary. [Note: any questions that go to the detail of the legality of the program under applicable competition law should be referred to LCA.]
- The IHT article further characterizes the use of discretionary funding for special customer situations as somehow anticompetitive. BIF simply enables the use of consulting services from Microsoft Consulting Services and from our business partners for pre and post-sale activities for our enterprise customers. This is a common industry practice because enterprise customers often benefit from highly skilled consultants in evaluating and deploying software systems for large organizations. This program complies fully with applicable regulations.
- The article includes reports of Microsoft employees allegedly misrepresenting their affiliations while attending industry trade shows. Simply put, such behaviour violates our company policy; we are looking into the reports and will take appropriate action. We recognize and accept that, as an industry leader, we are held to high standards of ethical business conduct.
- We understand that our activities and programs will be heavily scrutinized and are open to reviewing issues with government officials and representatives. In fact we have already sent information to the European Commission to respond to any questions they may have based on this article.
MS-CC-RN 000001145825
HIGHLY CONFIDENTIAL
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