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Microsoft's Annual Report Reveals OSS Mistakes

mjasay writes "Microsoft's most recent annual report suggests that the company is increasingly coming to grips with open source, yet also seems determined to perpetuate myths about open source that poorly serve it and its shareholders. Microsoft CEO Steve Ballmer has suggested before that 'free software means no free soda' for Microsoft employees; but this is perhaps the first time that Microsoft has managed to enshrine its ignorance in a public document. In the annual report, Microsoft makes two primary false claims about open source: 1) Open source companies don't invest in research and development and instead largely free-ride on Microsoft's patents and copyrights; and 2) Open source projects don't innovate and instead mimic Microsoft's products. Perhaps Microsoft has forgotten its own 'innovative' past copying of markets and technologies created by Apple and others. But at least Microsoft gets one thing right: 'To the extent open source software gains increasing market acceptance, our sales, revenue and operating margins may decline.'"

22 of 348 comments (clear)

  1. News? by dreamchaser · · Score: 5, Insightful

    Did anyone expect anything other than spin from MS with regards to Open Source Software? Hmmm.

    1. Re:News? by ozphx · · Score: 5, Insightful

      Compared to say Cnet's spin, which suggested that MS didn't spend very much on R&D compared to OSS companies.

      Apparantly half its income - around $7B spent on R&D is "not much".

      --
      3laws: No freebies, no backsies, GTFO.
    2. Re:News? by rtb61 · · Score: 5, Insightful

      This report has very little to do with open source, it is all about marketing. The M$ board and executive team is basically treating it's shareholders the same way it treats it's customers. It is feeding them a line of non-committal B$ in order to keep their jobs and maintain a threatened share price.

      So M$'s annual report is starting to bear no resemblance to what most respectable companies would produce or what an executive team with integrity would present to shareholders. It is a empty glossy pump up produced by a marketing team rather than an management and engineering team. No new directions, no new products, no new ideas, just more of ballmer's self involved blather and bull shit.

      Psychologically it is interesting, hmm, we know everything, we make no mistakes, we are the computer industry, when it goes wrong, it is everybody else's fault, they stole it from us, they don't know anything and the customer is stupid when they don't realise this.

      Technically it is quite true that M$ help to create the OSS movement, they were such an unreliable and deceitful supplier of software that they really did do more than anybody else to drive customers to OSS.

      --
      Chaos - everything, everywhere, everywhen
    3. Re:News? by symbolset · · Score: 5, Insightful

      Did anyone expect anything other than spin from MS with regards to Open Source Software? Hmmm.

      No.

      Ok, one word posts can get good moderation but I'm willing to expand on this.

      Microsoft's innovation is to sell the ideas of others as organic product. This is not really a new idea. See "Kufu: Expansions on the Art of Building Pyramids." (not cited)

      I'm currently working my way through Cashman & Shelly's "Introduction to Computer Programming IBM/360 Assembler Language" (c)1969, Anaheim Publishing Company.

      Familiar terms there include "DOS", "Work Areas" and "Control Macros"

      I'm willing to bet there are a couple dozen ideas in this book that invalidate Microsoft patents.

      For prior art on the rest of them you need only read Communications of the ACM, origin through 1981.

      --
      Help stamp out iliturcy.
    4. Re:News? by symbolset · · Score: 5, Insightful

      We need a ruling that software patents are void. We're well on the way. Recent Supreme Court rulings are indicative of a climate change in the Court.

      People need to get behind the idea that software patents and copyrights serve to prevent "the progress of science and useful arts."

      Progress is the goal. If the tool no longer serves it, it needs to be abandoned.

      --
      Help stamp out iliturcy.
    5. Re:News? by DaveAtFraud · · Score: 5, Insightful

      Technically it is quite true that M$ help to create the OSS movement, they were such an unreliable and deceitful supplier of software that they really did do more than anybody else to drive customers to OSS.

      Somewhat of an overstatement or at least an over simplification. You need only look at the programs that started out in /usr/contrib from long before M$ was even Billy G's wet dream. Programs like grep and awk easily come to mind.

      That being said, M$ is what made OSS into a viable, enterprise level force in the computer software business. From their buggy programs and operating systems to their use of vaporware to string the market along, M$'s unwillingness to allow any competitor to survive (DR-DOS or OS/2 anyone? How about WordPerfect, Ami Pro, Lotus 1-2-3, etc?) made open source software necessary. Linux and *BSD would still be hobby toys if there was really a competitive commercial software marketplace with real choice.

      Microsoft didn't actually create OSS. Open source software existed long before Microsoft. Microsoft is what made OSS necessary as the only way to offer a competitive, alternative product. One that couldn't be squeezed out of existence through contractual agreements that forbade offering the alternative.

      Cheers,

      Dave

      P.S. I've been using Linux since 1998 and I was an OS/2 user prior to that.

      --
      They that can give up essential liberty to obtain a little temporary safety deserve neither safety nor liberty.
      Ben
    6. Re:News? by stmok · · Score: 5, Insightful

      This blog at c/net is just an indication that MS is in a more subtle tone, crapping themselves. They have NO effective response to open source. This has been true since their first public strike at Open Source. (Cancer, anyone?)

      The reason? The simple existence of open source is a contradiction to their very own fundamental business model.

      They rely on software licenses as their main source of income. They will do ANYTHING to protect that. We know this from their history. They're about control...Because to them, control is profit. (Examples: Protocols, document formats, de-facto standards, anti-piracy schemes like Activation and "Genuine Advantage", etc are all different aspects of control.)

      But Open Source turns that model upside down. Software licenses become $0. You don't control and "encourage" people to use your products. You let them do things on their own accord. You let your fellow man/woman choose. It puts more pressure on you to improve the technology.

      Companies who are based on this model now focus their resources on tools to give to the community. They let the community innovate while they polish up and improve for their commercially supported variants. (The cycle continues endlessly as they improve and give back).

      The result? Microsoft will find it harder and harder as Open Source improves. Granted, the closed source model gets you the money quicker, and its more polished for mainstream PC users, but you don't have genuine user loyalty.

      The fundamental weakness here is, if you can create an Open Source equivalent (features that are equal or better), closed source companies will be in serious trouble. Why would people pay if they can get it elsewhere for free? (legally).

      This is why they're so scared. They know the day will come. (On that day, be sure to note the share prices and the company's general behaviour).

      They can resort to petty distractions and occasional seasons of being nice to open source, but they know they cannot stop this stone wheel. It may grind slowly, but its coming. Consistent improvement, that's what its all about.

  2. Damn parasites by stox · · Score: 5, Insightful

    Hmm, where did that IP stack come from? Where did they get the idea of tabbed browsing? Where did they get a web browser from? The list goes on and on. I wonder how many "patents" came from ideas inspired by open source?

    The reason Microsoft is failing is that the parasite has become larger than the host.

    --
    "To those who are overly cautious, everything is impossible. "
    1. Re:Damn parasites by Wolfbone · · Score: 5, Informative

      Yes, well they're not just wrong to say that FOSS never innovates, they've actually acquired patents bearing on innovations (probably) originally made by FOSS (such as the Enlightenment pager, fundamental aspects of RSS, ICCCM-like extended clipboard formats etc.) As far as I know they haven't yet used any of these patents to steal (no inverted commas) a FOSS developer's own invention and work, but it is not impossible or inconceivable that they might. Their claim that FOSS 'steals' or free rides on their copyrighted [wtf?] and patented "intellectual property" is simply despicable.

    2. Re:Damn parasites by Maxmin · · Score: 5, Informative

      The parent post is right, Microsoft has incorporated BSD-derived code into its operating systems.

      The web browser and web server were concepts and implementations that originated within the open-source community.

      If MS is accusing the open-source community of absconding with its intellectual property, then why no compunction about incorporating same into their products?

      Software *ideas* are just that, ideas. They should not be patented, or patentable, but that's just what's happened and has been encouraged by USPTO. Companies like MS (and many others) rode that bandwagon and have patents that one might call dubious.

      --
      O lord, bless this thy holy hand grenade, that with it thou mayest blow thine enemies to tiny bits, in thy mercy.
    3. Re:Damn parasites by Maxmin · · Score: 5, Informative

      Neither the web browser or tabbed browsing originate from open source projects.

      False. Somewhere around here I've still got a spool with a copy of the NCSA server and Mosaic sources from way back when. And lookee here, you can still download Mosaic source for X Windows, version 1.2 in the directory called 'old'.

      A quick read of the web's history, such as the Tim Berners-Lee book Weaving the Web, and you'd *learn* that the first web browser was, in fact, open-source.

      That's what the internet was founded on, open principles, not proprietary, though proprietary wasn't ever excluded. Much of the internet's infrastructure was proprietary early on, and still is. But if you're going to assert that open source software is nicking code and patents from proprietary, let's see some evidence, eh?

      Don't know about tabbed browsing, though it's plain for anyone to see that MS was late to that party, and brought with it a very clunky implementation.

      --
      O lord, bless this thy holy hand grenade, that with it thou mayest blow thine enemies to tiny bits, in thy mercy.
  3. Compiz by jadedoto · · Score: 5, Funny

    I agree. Compiz-Fusion totally ripped Microsoft's patents to the desktop cube idea.

    I just forgot how to enable it in Vista Ultimate...

  4. Microsoft is right, you are all wrong. by Anonymous Coward · · Score: 5, Funny

    Microsoft's innovations stand on their own.
    Their accomplishments with active directory, for instance, are wonderful. I'd like to see the open source community come up with anything like it.
    Also, their networking stack is rock solid. It would take years for the open source community to come up with anything as polished.

    From the beginning, Microsoft has been an innovative company. MS Dos, Basic, I could go on and on. Their contributions to original research have truly advanced the human condition.

    Open source projects are simply parasites on the innovations of microsoft. Bah!

  5. nothing to see here by Anonymous Coward · · Score: 5, Informative

    A 10K report is *supposed* to have a section where the CEO lays out, in gory detail, external threats and situations on the horizon that have a significant chance of derailing their revenue plan for the next year.

    What Ballmer is saying here is that

    1. competitors don't have to attack Microsoft broadside, as they have the luxury of going after a niche market
    2. they have the fast follower's advantage of being able to use Microsoft's products, rather than having to do the early R&D themselves (the same advantage that Microsoft once had against Apple, Lotus, and Netscape)
    3. some of the most dangerous competitors are in open source, because they can't be finished off the same way that Microsoft crushed its competition in the '80s and '90s.

    IIRC it was Marc Andressen who first hit on this tactic for competing against Microsoft, when Netscape launched the Mozilla Foundation in 1998. It took a few years of fumbling around before that took fruit - probably because the Navigator/Communicator code was so badly written - but that turned out to be a masterstroke of business tactics.

  6. Reality check? by Anonymous Coward · · Score: 5, Interesting

    I fail to see where Microsoft makes any "mistakes" in its filing. The statement the company made were, as far as I can tell, correct. Without making judgment calls on R&D models, it's fair to say that the proprietary-versus-open source methods are very different, and that open source products benefit from the fact that their research costs *are* distributed amongst the various contributing developers.

    The filing never says that OSS companies don't spend a great deal on R&D, nor does it say that Microsoft's R&D (ie. feature development and coding) hasn't been influenced by outside factors. Therefore, I fail to see how there are any mistruths spoken here.

    Keep in mind that this is SEC filing, for goodness sake, and that the questionable sections are intended to be simple, concise analyses of the competition and a few differentiating factors between them and Microsoft. I think it does that just fine.

    With all the complaining we do here about the FUD inflicted on us by megacorporations, I am rather embarrassed to see us using the very same tacticts with this sort of story.

  7. Re:BSD Networking Stack by msuarezalvarez · · Score: 5, Insightful

    What's wrong (or, at least, morally dubious) is that they fail to recognize what they did with the OSS-originated network stack...

  8. Re:pure narcissism by gujo-odori · · Score: 5, Interesting

    Wow, did you used to work there, too?

    Three years ago, I became an unwilling MSFT employee via acquisition (don't worry, I didn't stay and remain ideologically pure ), and that's *exactly* how many Microsoft employees think. It's not surprising and it's not their fault, considering how much effort and money Microsoft spends on propaganda to tell them so. The only place I've ever lived that had a propaganda drive like MSFT HQ was a communist country with huge party banners on many street corners.

  9. Re:Thats not an excuse by Darkness404 · · Score: 5, Informative

    Open office is a bad replica of Microsoft Office.

    Remember how hard it was getting people to switch from a CLI to a new GUI back when the first Macs were coming out? Getting people to migrate to Windows from DOS? It was hard. Now change the interface of someone's most used program, it is the same thing over again. Plus, OOo looks nothing like Office 2007, and that is part of the reason it is being adopted.

    Sharp Develop is a bad replica of Visual Studio.

    Again, people use familiar things.

    Firefox 3 search bar and navigation button interface is derived from that of IE.

    There are only a certain number of ways to improve something. For once IE got something somewhat right, so the Firefox developers took that and changed it. Guess what? The tabs in IE 7 are similar to Firefox's, which are similar to Opera's. And as for the UI, it mostly has stayed the same from Netscape onwards, and just about every browser has adopted it.

    Linux desktop are inharently trying to copy Windows day by day.

    Ummm... Yah. Wrong. First, take a default install of Ubuntu, one of the most popular Linux distros, you get, 2 taskbars, not like Windows, you get a package management tool, not like Windows, you get pre-installed programs for advanced image editing, word processing, etc. not like Windows. Ok, sure, you have a button on your window manager to close, minimize or maximize your window, but that is about where the similarities end.

    And that isn't even dealing with the technical differences.

    --
    Taxation is legalized theft, no more, no less.
  10. EXTRA! EXTRA! by martin-boundary · · Score: 5, Funny
    FREE SOFTWARE REDUCES HEALTH RISK FOR MICROSOFT EMPLOYEES

    In a surprising twist, Microsoft CEO Steve Ballmer has admitted yesterday that Free Software is the cause of better than average health for Microsoft employees. "Free software means no free soda" is the new catch cry at the Redmond, WA software powerhouse.

    "We used to offer our developers free soda, and never thought about the health consequences", said Ballmer while rocking on a designer chair. "Then one day, one of our employees installed Linux on his workstation, which also happened to run the in-house Visual Basic control panel that overrides all the networked soft drink machines on the campus. Suddently, people couldn't get their Mountain Dew anymore, unless they actually paid for it themselves".

    Ballmer went on to explain that the programmer who wrote the soda control software had left years ago, and nobody could replace him. Soft drinks were left in the machines for months and morale went down at first among the employees, but soon picked up again when a drop in the monthly rate of deaths from heart failure was noticed. "Free software is like a virus that actually helps you", Ballmer said. "With the money we saved in ambulance fees, I bought every employee a free yo-yo, and even had enough money left over for a new chair. Way to go, Free Software, we love ya!" Former CEO Bill Gates declined to comment.

  11. HA!!! by josmar52789 · · Score: 5, Insightful

    "open source software doesn't innovate"

    Ha! The article directly below this one states that someone has developed an app to graph or diagram SQL statements... Now, that's innovation - and it didn't require any Microsoft products to be harmed during testing or development!

    Oh by the way, the Internet itself is an open source effort and I can't imagine anything more innovative or groundbreaking than the most advanced communications medium ever created!

  12. Pot-kettle syndrome by WoollyMittens · · Score: 5, Interesting

    It took "innovations" like Firefox to finally get the monolithic Microsoft of its collective ass and FINALY update their aging browser after letting it hold back the internet for about half a decade.

  13. Slashdot at work... by Anonymous Coward · · Score: 5, Informative

    I know it's somewhat taboo to RTFA around here, but I thought I'd compare with the summary anyway:

    Article, quoting MSFT:
    "Some of these firms may build upon Microsoft ideas that we provide to them free or at low royalties in connection with our interoperability initiatives."
    Implication: there exist some companies that reuse some of Microsoft's ideas, reducing their costs in the process (presumably at MSFT's expense)

    Slashdot summary:
    "Open source companies don't invest in research and development and instead largely free-ride on Microsoft's patents and copyrights"
    Implication: Microsoft claims most/all open source companies copy Microsoft's ideas and don't contribute anything

    Article,quoting MSFT:
    "Open source software vendors are devoting considerable efforts to developing software that mimics the features and functionality of our products, in some cases on the basis of technical specifications for Microsoft technologies that we make available."
    Implication: there are open source products that look and behave very similarly to some of Microsoft's products

    Slashdot summary:
    "Open source projects don't innovate and instead mimic Microsoft's products."
    Implication: Microsoft claims most/all open source products are copies of MSFT's products

    I understand that bashing MSFT is a popular passtime around here, but when the article summaries are completely misleading, that starts to get in the way of the trustworthiness Slashdot as a whole. If Slashdot hopes to remain relevant in the longterm, it needs to make at least some effort to accurately portray the stories. Otherwise, it will eventually become the internet equivalent of tabloids, worth only the entertainment value of reading the stories+comments, and completely untrustworthy for actual facts.