All Things Digital

In Sept. 1991, Microsoft exec Jim Allchin emailed CEO Bill Gates: “We must slow down Novell. As you said, Bill, it has to be dramatic. We need to slaughter Novell before they get stronger.” And in 2001 Microsoft Chief Steve Ballmer likened Linux to “cancer.” Later that year, Gates derided open-source licensing models like the one used by Linux as “Pacman-like.”

That’s some heavy rhetoric. Certainly, it’s representative of the distaste with which Microsoft (MSFT) has viewed Linux and Linux vendors like Novell (NOVL) for the past decade.

So to hear back in Nov. 2006 that Microsoft was partnering with Novell to offer sales support for Novell’s SUSE Linux and cooperate with its old rival on Linux-Windows interoperability was astonishing–a bit like discovering that Stalin really sent Trotsky to Mexico for a nice vacation or that Itchy has shacked up with Scratchy.

And the unlikely partnership continues to astonish to this day. On Wednesday, the two companies expanded their interoperability agreement, with Microsoft agreeing to buy and resell up to $100 million in enterprise support subscriptions for Novell’s SUSE Linux Enterprise Server OS. That’s in addition to the $240 million Microsoft has already agreed to buy.

Odd, isn’t it, to see Microsoft marketing Linux like this? Odder still, to see Novell in an alliance with the company that hoped to “slaughter” it. So why did Novell agree to it? “Novell’s benefit is obvious, if not self-destructive,” Joe Wilcox explains over at Microsoft Watch. “The deal allows Novell to exist in the shadow of Windows Server, sustaining on its table scraps. Microsoft can offer customers that simply must have some Linux servers a sanctioned source for good tools ensuring interoperability with Windows Server.”

Steve Martin once said, “The difference between a good comedian and a great one is ti … ming, tiiiii-ming, timmm-ing . . . timing!” If that’s the case, Microsoft’s comedic timing is impeccable.

In a status report filed with Federal antitrust regulators yesterday, Microsoft (MSFT) said it had done much to comply with its 2002 antitrust consent decree and generally applauded its efforts toward interoperability and fair competition.

In the states, perhaps. But apparently not in Asia. Because not 24 hours later, China’s State Intellectual Property Office said it’s investigating the software giant for discriminatory pricing. And according to the Shanghai Securities News, it may sue Microsoft under a new antitrust law scheduled to go into effect Aug. 1.

“On the one hand, global software firms, taking advantage of their monopoly position, set unreasonably high prices for genuine software, while on the other hand, they criticize Chinese for poor copyright awareness,” an unnamed source told the publication. “This is abnormal. With the anti-monopoly law in place, [the] Chinese government and companies have the obligation and right to correct the situation.”

Of course, it’s also “abnormal” for Windows Vista to be priced at $2.50 a copy, yet copies of the OS are widely available in China at that price. Syndicates that distribute more than $2 billion worth of counterfeit Microsoft software aren’t exactly normal either, but you’ll find those in China as well. The FBI did. Which is not to say that China is wrong to complain of Microsoft’s unreasonably high prices–just laughably vindictive in the way it’s gone about it.

Amazing how a record $1.35 billion in antitrust fines can change your perspective on software interoperability, eh? Under pressure from European regulators, national standards organizations and anyone else interested in open standards, Microsoft (MSFT) has committed to using open document standards in the future.

Late yesterday, the company announced plans to add support for the open source Open Document Format–a rival of Microsoft Word–to Office 2007. Beginning with Service Pack 2 for Office 2007, due in the first half of next year the market-leading productivity suite will offer ODF as a default file format and Adobe’s (ADBE) PDF (Portable Document Format) and Microsoft’s own XML Paper Specification as well. “We have heard from customers and governments that they would like to see us do this,” said Tom Robertson, general manager of Interoperability and Standards at Microsoft. “Now is the time to announce this support.”

“Now,” of course being short for “now that the European Commission is investigating us again over claims of monopoly abuse;” “support” short for “poor support.” At least that seems to be the position of the European Committee for Interoperable Systems, which is openly skeptical of Microsoft’s sudden commitment to genuine interoperability. “It is particularly striking that all of Microsoft’s latest policy statements on interoperability are still in the future tense, as though these were difficult technical objectives,” said ECIS spokesman Thomas Vinje. “They are not. A closer look at their substance suggests that Microsoft is still playing for time to further consolidate its super-dominant position, and that continued antitrust vigilance will be necessary.”

And continued antitrust vigilance is what Microsoft’s going to get. This morning the EC said it had “taken note” of the company’s announcement and plans to study it. Said the EC, “In its ongoing antitrust investigation concerning interoperability with Microsoft Office, the commission will investigate whether the announced support of ODF in Office leads to better interoperability and allows consumers to process and exchange their documents with the software product of their choice.”

With Microsoft’s (MSFT) hostile bid looking more and more like an inevitability, Yahoo (YHOO) has apparently decided it’s got nothing to lose by joining Google’s (GOOG) “Everybody-But-Facebook Coalition.”

This morning the company threw its support behind OpenSocial–a Google-led initiative to foster interoperability between social applications–and with MySpace (NWS) and Google, it announced the OpenSocial Foundation, a nonprofit dedicated to the mitigation of perceptions that Google will use OpenSocial for its own benefit.

“… Today … we’ve joined forces with Google and MySpace to create the OpenSocial Foundation, and will also begin supporting the OpenSocial standard,” Yahoo VP of Platforms Wade Chambers said in a post to Yahoo Anecdotal. “Industry consortiums such as this often start slowly and evolve over time. So far, OpenSocial is rapidly growing and adapting, but still in the early stages. We feel that this is the right step at this stage in its evolution. It’s no longer a trial balloon–it’s for real. We are taking this opportunity to help ensure Web sites and developers feel confident using OpenSocial as the building blocks for their new social apps.”

Turns out the highlight of today’s MIX08 event wasn’t Silverlight and Microsoft Expression Studio, but IE8 (Internet Explorer 8). Speaking at the Microsoft Web development conference, Dean Hachamovitch, the IE group’s general manager, announced IE8 Beta 1. In addition to Web standards compliance, the new browser showcases some new features and improvements, among them
Activities–”contextual services to quickly access a service from any Web page”–and Web Slices, “a new feature for Web sites to connect to their users by subscribing to content directly within a Web page.”

These sound pretty slick. Still, as Joe Wilcox notes over at Microsoft Watch, it’s a little odd that Microsoft would introduce proprietary browser specifications like these after its recent commitments to interoperability.

Microsoft is serious about its newfound commitment to interoperability–serious enough to make Internet Explorer 8 Web standards-compliant out of the box.

In a complete reversal of earlier policy, the software giant has decided to make IE8 default to a standards-compliant mode of rendering Web pages that favors interoperability, rather than an IE7 rendering mode that favors Microsoft (MSFT). “Microsoft recently published a set of Interoperability Principles,” Internet Explorer General Manager Dean Hachamovitch wrote in a post to the IEBlog. “Thinking about IE8’s behavior with these principles in mind, interpreting Web content in the most standards-compliant way possible is a better thing to do. We think that acting in accordance with principles is important, and IE8’s default is a demonstration of the interoperability principles in action.”

Quite the change of heart. Guess a record $1.35 billion in antitrust fines changes your perspective on these things. Certainly, Hachamovitch implies as much in his post. Writes Hachamovitch, “While we do not believe any current legal requirements would dictate which rendering mode a browser must use, this step clearly removes this question as a potential legal and regulatory issue.”

It certainly does. And if you don’t believe Hachamovitch, just ask Brad Smith, Microsoft senior vice president and general counsel. He said exactly the same thing, using exactly the same words in a company press release announcing IE8’s Web standards compliance.

If Microsoft (MSFT) believed its “new” commitment to interoperability would curry favor with the European Commission it was mistaken. Sorely mistaken.

This morning the EC slapped the software giant with another $1.35 billion in fines for failing to comply with its 2004 antitrust order. “Microsoft was the first company in 50 years of EU competition policy that the commission has had to fine for failure to comply with an antitrust decision,” European Commissioner for Competition Neelie Kroes said. “I hope that today’s decision closes a dark chapter in Microsoft’s record of noncompliance with the commission’s March 2004 decision and that the principles confirmed by the Court of First Instance ruling of September 2007 will govern Microsoft’s future conduct.”

The fine is the largest the EU has ever imposed against a single company in an antitrust case and brings Microsoft’s total European antitrust tab to about $2.5 billion, in current exchange rates. Quite a sum, to be sure. But for Microsoft, one that could easily come out of the “Found Beneath Bill Gates’s Couch Cushions” fund. Said Jeremy Allison, co-creator of the open-source workgroup file-and-print-server software Samba, “That’s not a fine, that’s just a way of getting their attention.”

In a statement, Microsoft said it was “reviewing the commission’s actions,” adding that the fine concerned past issues it thought had been resolved. “As we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are focusing on steps that will improve things for the future,” the company said.

But Kroes wasn’t having any of it. “Talk, as you know, is cheap,” she said this morning. “We don’t want talk and promises.”

Color the European Commission unimpressed by Microsoft’s declaration of interoperability principles this morning. Seems the EC hasn’t forgotten that Microsoft’s made these promises before. On at least four occasions.

“The European Commission takes note of today’s announcement by Microsoft of its intention to commit to a number of principles in order to promote interoperability with some of its high-market-share software products,” the EC said in a statement. “This announcement does not relate to the question of whether or not Microsoft has been complying with EU antitrust rules in this area in the past. The commission would welcome any move toward genuine interoperability. Nonetheless, the commission notes that today’s announcement follows at least four similar statements by Microsoft in the past on the importance of interoperability.”

The European Committee for Interoperable Systems, a coalition of Microsoft rivals, was equally dubious of the announcement. Noting that Microsoft announced its last interoperability initiative in August of 2007, when it had not yet complied with the EC’s 2004 ruling requiring the disclosure of interoperability information, the ECIS said the world needs a permanent change in Microsoft’s behavior, not just another announcement. “We have heard high-profile commitments from Microsoft a half-dozen times over the past two years, but have yet to see any lasting change in Microsoft’s behavior in the marketplace,” ECIS Legal Counsel and Spokesman Thomas Vinje said in a statement.

Vinje went on to suggest that if Microsoft is truly serious about enhancing its support of industry standards, it will endorse the Open Document Format at the International Standards Organization meeting next week and stop pushing forward with its proprietary Windows-dependent standard document format.

Microsoft (MSFT) made a “significant” company announcement this morning, one thankfully unrelated to its bid for the much diminished Yahoo (YHOO) Inc.

But what is there for the software giant to talk about these days other than Yahoo, really? Why that old saw, software interoperability, of course. In a statement issued this morning, the software giant announced changes to its technology and business practices intended to “increase the openness of its products and drive greater interoperability, opportunity and choice for developers, partners, customers and competitors”–which translates roughly as “appease European antitrust officials.”

Among the key changes:

• Microsoft will make the protocols and APIs in its high-volume products openly available to the developer community.
• Microsoft will indicate which protocols are covered by Microsoft patents and will issue licenses to those patents on “reasonable and nondiscriminatory terms, at low royalty rates.”
• Microsoft will implement a covenant not to sue open-source developers for development or noncommercial distribution of implementations of those protocols.
• Microsoft will support open standards and work with developers and standards-setting bodies to enable the transfer of user data from Microsoft applications to apps designed by third-party developers.

“Customers need all their vendors, including and especially Microsoft, to deliver software and services that are flexible enough such that any developer can use their open interfaces and data to effectively integrate applications or to compose entirely new solutions,” Ray Ozzie, Microsoft’s chief software architect, said in a statement. “By increasing the openness of our products, we will provide developers additional opportunity to innovate and deliver value for customers.”

Quite a move for a company whose leadership once likened Linux to “cancer” and derided open-source licensing models as “Pacman-like.” Though it’s not like we haven’t seen this all before.

“They are not making the source codes open, but they are opening the gates that allow you into the compound,” said Matt Asay, a general manager at open-source management company Alfresco. “It’s a great first step. … It’s a bold move by Microsoft. It’s a good indication of Microsoft’s self-confidence that it feels it can open up what effectively are its crown jewels and not lobotomize its company at the same time.”