Microsoft Responds to Alleged Ballmer 'Threats' Against Linux

Comments made by Microsoft CEO Steve Ballmer last Thursday to an analyst conference for the most part went unnoticed until stories this morning cited excerpts from a freshly published transcript of that conference. In one such story, an excerpted partial sentence was interpreted as part of a statement that Microsoft may yet exercise its option to sue manufacturers of Linux operating systems other than Novell for infringement of patent.

A fresh read of the extended excerpt from that transcript, however, suggests at first this may not have been Ballmer's intended meaning. Here is the extended excerpt from Ballmer's speech to the analysts' group:

The second style of competition comes from Open Source. We have done very well versus Linux on the desktop and on the server, and I am actually hopeful that we will build share, particularly in Web Servers and high performance clusters, from Linux in the next year.

But you cannot be confused: Having a competitor out there who at least nominally looks to be close to free is always a challenge, and there always is a set of pressure on us, particularly on pricing, there's a set of pricing pressure that nobody should ignore. We are competing with a value equation. We are higher priced, but we bring greater value. But I don't want to eliminate in your minds the notions of risk of pricing that comes from competition from Open Source.

The deal that we announced at the end of last year with Novell I consider to be very important. It demonstrated clearly the value of intellectual property even in the Open Source world. I would not anticipate that we make a huge additional revenue stream from our Novell deal, but I do think it clearly establishes that Open Source is not free and Open Source will have to respect intellectual property rights of others just as any other competitor will.

This morning, CNET interpreted Ballmer's statement "that Open Source is not free" as "a clear threat against open source users." Meanwhile, Computerworld offered a somewhat different, though equally dire, interpretation, proposing that Ballmer may have in fact jeopardize its standing with Novell, stating, "His remarks risk reopening the rift between Novell and Microsoft over the way the deal should be interpreted."

Conceivably, as Ballmer's comments stand without embellishment, he may very well have suggested that open source developers should take inventory on those items they claim to have the right to license for free, especially since the use and maintenance of open source software is a commercial enterprise. Microsoft supporters have suggested that open source providers cannot lay claim to concepts that either belong to someone else or are in the public domain, simply because they would license the software manifestations of those concepts for free.

On the other side of the table, there is a body of opinion that maintains that Microsoft is gearing up for a legal offensive against Linux providers, with the exception of those such as Novell who may become immunized to such action by entering into a licensing arrangement with it. They contend that Ballmer and other Microsoft executives may be making veiled threats against the concept of free licensing, while simultaneously touting the benefits of its Novell agreement, as a "carrot-and-stick" approach to compel competitors into succumbing to a retroactive licensing arrangement that effectively makes them pawns for Microsoft.

In an attempt to tip the scales, BetaNews gave Microsoft the opportunity to validate one theory or the other. We contacted multiple sources at Microsoft this morning, presenting them with the complete Ballmer excerpt plus the citations from this morning's stories.

The company's response to BetaNews suggests that, if Ballmer was taken out of context, then at least Microsoft was in no mood to correct that context. At worst, it suggests the company may be comfortable with letting the "veiled threat" theory stand.

"We believe there is overlap between our IP portfolio and various open source software components," states Microsoft's response to BetaNews. "However, the agreement with Novell demonstrates that software patents are not an obstacle to working together with open source companies. Microsoft and Novell have built a bridge to connect open source and proprietary software. Rather than being an obstacle, software patents are a part of the foundation for this agreement. Our agreement with Novell is yet another affirmation of our policy to license our IP to others - including open source companies."

When pressed a second time with the question of whether Microsoft is willing to deny that it has threatened Linux users specifically, a spokesperson responded, "Microsoft has repeatedly publicly stated that they prefer to license, not to litigate."

The company's position with regard to whether it is possible for open source licensing to infringe upon intellectual property rights, is especially interesting given arguments made by the company's own attorney yesterday before the US Supreme Court, in a case originally brought against Microsoft by AT&T. There, Microsoft argued that source code cannot be patented because it is merely the instructions behind software, not the mechanism of software itself. Granted, the debate concerns patentability, not copyright.

Novell has yet to respond to our request for comment. Meanwhile, Microsoft's response not only declines to provide a softer clarification of Ballmer's comments or deny the existence of threats, but also very clearly spells out both available options. The latter of the two may not be preferable, though it has not been withdrawn.

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