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Ballmer's Email - Indemnification Comes Full Circle
Wednesday, October 27 2004 @ 05:38 PM EDT

Just 6 easy steps, and we come full circle on the indemnification story:

1. First, we had SCO announcing it was suing IBM and threatening Linux users for contributory copyright infringement.

2. Then the chorus broke out in song about how Linux has no indemnification.

3. Then we found out from BayStar's lips that Microsoft inspired them to invest in SCO, an investment that made all the lawsuits financially possible. Thanks for nothing, BayStar.

4. Meanwhile, the Linux world began setting up indemnification and legal funds for Linux users and developers.

5. SCO sued everybody else. Terror ensued, sorta, briefly.

6. Now, today, there are reports about a Steve Ballmer email, which he just sent to subscribers to executive emails from Microsoft "and to other business decision makers and IT professionals, to share some of the data around these key issues - and to provide examples of customers who opted to go with the Windows platform rather than Linux or UNIX, and how that's playing out for them in the real world."

So now we see what it was all for, all the frogs in the SCO pond singing about indemnification. Of course, Yankee Group's study is given a prominent place, and Ballmer brazenly claims their products are more secure than Linux, ha ha, and then lo and behold, in one section he suggests that indemnification is another fine reason to choose Microsoft over Linux. Obviously, they think we all just fell off a turnip truck and can't connect the dots. Is it legal, I wonder, to help create IP legal issues for your chief competitor, and then use that trouble as a marketing ploy? If it is, somebody pass a law quick, will ya?

Here's a reaction from Mandrakesoft:

"Gael Duval, co-founder of Mandrakesoft, believes that Ballmer's email is indicative of a change of strategy from Microsoft.

"'We think that Microsoft is trying a new strategy to fight against Linux by spreading much FUD [Fear Uncertainty and Doubt] about Linux strongest points,' Duval told ZDNet UK.

"'In particular, the TCO argument can easily be modelled to fit their communication, but many studies -- in general the ones that aren't financed by Microsoft -- show that Linux' TCO is much lower than Windows', in particular because administering Linux is really a peaceful activity that doesn't require as many sysadmins as does Windows,' Duval continued, adding that big organisations such as governments are getting increasingly tempted by Linux."

I like that phrase, "a peaceful activity". That's truly what using GNU/Linux is like for me. Peaceful.

Here's the section on indemnification. I think I discern more than just FUD:


"Increasingly, we're hearing from customers that another factor in their consideration of computing platforms is indemnification. In 2003, we looked at our volume licensing contracts to see what we could do to increase customer satisfaction, and a top issue we heard about was patent indemnification, which then was capped at the amount the customer had paid for the software. So later that year, we lifted that cap for our volume licensing customers, who are most likely to be the target of an intellectual property lawsuit.

"Today, when a volume licensing customer - a business or organization ranging from as few as five computers to many thousands - licenses a Microsoft product, we provide uncapped protection for legal costs associated with a patent, copyright, trademark or trade secret claim alleging infringement by a Microsoft product. We do this because we are proud to stand behind our products, and because we understand that being on the wrong end of a software patent lawsuit could cost a customer millions of dollars, and massively disrupt their business.

"No vendor today stands behind Linux with full IP indemnification. In fact, it is rare for open source software to provide customers with any indemnification at all. We think Microsoft's indemnification already is one of the best offered by the leading players in the industry for volume licensing customers, and we're looking at ways to expand it to an even broader set of our customers. It's definitely something businesses want to think about as they're building or expanding their IT infrastructure.

"It was certainly a factor for Regal Entertainment Group, the largest movie theatre chain in the world. In 2001, they moved to Red Hat Linux. After evaluating Linux in their business for several months, however, they migrated to the Microsoft platform - not only because of lower TCO, stronger support and services, and greater reliability and manageability, but because they were more fully indemnified on IP. J.E. Henry, CIO of Regal Entertainment, told me that "reduced risk was a decision factor in selecting Windows over Linux. We needed to minimize our exposure to the distraction of potential IP infringement claims, and we had a big enough open source presence to be concerned. With the way that Microsoft stands behind its products, it's one less thing that I have to worry about."

So, there you have it, the full cynical circle. They offer their customers IP protection. And it's "rare" for Linux vendors to offer any indemnification at all? Which of them isn't doing that? And then there is the OSDL fund and OSRM and tools to prevent such issues in the first place, like Black Duck's offerings. How can he make such a statement? Oh. I get it. FUD. Meanwhile Microsoft is building up its patent portfolio and ups its patent indemnification, and I believe we can all fill in the blanks as to what comes next. This email would seem to be the clearest expression to date of their strategy. And is it not . . . what is the word? Soooo totally "Microsoft". Le mot juste, as I live and breathe. Never mind. Forewarned is forearmed. OSDL is doing some thinking and I know OSRM are having some deep thoughts on this subject of patents, too. OSRM's Daniel Egger puts it well: "When it comes to competing against Microsoft, hope is not a plan." Novell has done its part, so has IBM, and the wagons are circling. But to those of you in Europe, are you connecting some dots? If you wish to continue to use GNU/Linux, now would seem the ideal time to make sure you can.

If I got that email, I believe I'd ask Microsoft for indemnification for viruses and malware. No? They don't offer that? Zounds. That seems like a more common threat than patent infringement, don't you think? I believe they should offer that right away. Yes, definitely. I suggest you all ask for that, those of you stuck in the Windows world, right away. Virus indemnification. That's the ticket. After all, such troubles do affect your total cost of ownership to a significant degree, don't they? Then there's the worry that you might get sued after one of your employees unwittingly sends a virus to another company. For sure, we need some studies on the true total cost of using Windows.

Sender ID has been raised from the dead, like Frankenstein, with some new parts. Techweb says nothing has changed about the license though, but the patent has been narrowed, enough so AOL has happily hopped on board. Evidently, they don't care if we can't use Sender ID and still use our operating system.And if you were wondering how well those who make friends with Microsoft fare, I suggest this article by Bob Mims on SCO's current plight. I hear they are back in Brazil to try to stir up some business there. Either that, or they're planning a getaway to Rio. Joke, joke. That is a choice of venue that reflects their usual astuteness, don't you think?

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