Once More unto the Breach

Microsoft Open Source ISV Forum at OSBC

The Microsoft ISV team is again hosting the Microsoft Open Source ISV Forum prior to the Open Source Business Conference in San Francisco in a few weeks.

Last year was a really good event. It was well attended (about 120 people). Sam Ramji spent an hour with the group in open discussion around the challenges of open source at Microsoft and progress made. It was a particularly important discussion at the time because of a Fortune article the week before the forum. There was lots of good commentary in booth directions around such things as IP management. Stephen O'Grady (Redmonk) also presented and was his regularly inimitable self. John Roberts (SugarCRM CEO) spoke about their partner relationship with Microsoft, and the ISV team explained the opportunities available through the NXT program.

This year they're tightening the agenda up. The event starts with lunch and registration from 11:30am, and the event begins properly at 12:30pm. (You won't necessarily need the extra night in the hotel to attend.) Sam will speak again this year, as will Stephen. New ISV partners will present, as well as a panel discussion from a new collection of venture capitalists. If you're an ISV, it promises to be a good half day event to warm up before tackling OSBC itself.

Registration is free and the site is now open. As an added incentive, ISVs that attend the Microsoft Open Source ISV Forum get 50% off the two-day registration for OSBC.

The OOXML Ballot Resolution

[Update (2008-2-25 13:45): There's an excellent press release from ISO that outlines exact history and next steps and requirements for this ballot.]

I have long maintained that technology standardization is commercial diplomacy and the purpose of individual participants (as with all diplomats) is to expand one's area of economic influence while defending sovereign territory. This week a lot of people are gathering in Geneva for the ISO ballot resolution meeting for Office Open XML (OOXML), Microsoft's Office product specification. The debate no doubt will be contentious.

Microsoft had a perfect opportunity to participate in the Open Document Format (ODF) standard's development at OASIS. They ignored that opportunity. The best time for technology standardization arises when a problem space is well understood, with sufficient real implementation knowledge to discern what works and what doesn't. Microsoft had arguably the best experience to contribute. They chose not to participate. Standardized document formats with multiple product implementations posed a threat to their Office business.

That threat became real when the Commonwealth of Massachusetts chose ODF as a basis for product procurement to best serve its citizens. Microsoft's response was not to adopt the ODF standard that already existed with multiple implementations (and continues to act as a hub for alignment with other international work like China's UOF standard), but to rush their own product specification into the standardization process.

They have over the two year process done a remarkable amount of work to bring the specification through ECMA to ISO, and have made great gestures to enable others to support the Microsoft specification.

But there's a problem.

Microsoft is an adjudicated monopoly in the United States. The EU continues to investigate possible abuse of their market dominance. (Market leadership and innovation are not what's being punished, but rather the abuse of a dominant position.) Microsoft can complain all they want, but the practices that enabled their success continue to plague them. We cannot collectively rewrite history. Microsoft is indeed held to a different measure. They have forfeited some of the freedoms that other companies enjoy. In many ways, they have lost our trust.

One can not judge Microsoft's newly declared preference for "openness" against the work they've done promoting their own product specification, but against their continued refusal to adopt ODF. In the end, OOXML as an ISO standard (with its attendant market confusion) will best serve the needs of Microsoft over its customers, and that's a shame.

Andy Updegrove has an excellent essay on his blog as we go into this week's ballot resolution deliberations. He takes a different approach. In it he argues that a particular class of standards should be held to a higher bar for acceptance, because they enable fundamental technology access in the world going forward. He makes an compelling case for why OOXML should be flunked out of the ISO process.

This promises to be a fascinating week.

Would you do Open Source Marketing for Microsoft?

[Updated 2008-02-14, 20:15] Sandro also posted on the subject.

Microsoft’s partners team through its NXT initiative launched a campaign focused on open source ISVs in 2007 in conjunction with the Open Source Business Conference.  The campaign is designed to encourage ISVs to explore how best to deliver their solutions to customers in the Microsoft world, recognizing that many high profile open source projects have 30%-50% of their installed base in the Windows world.   The Microsoft program works through partners to assist ISVs.  

In the open source campaign, the NXT partner works with the ISV to:

• Review the ISV’s business model, solution offering, and channel delivery plans.
• Determine the best approach and plan to expand business in the Windows marketplace. 
• Map Microsoft partner programs that best serve the ISV to their needs.

Microsoft wants to expand the program this year, and Sandro Groganz and I are considering working together to join the program as a partner through his company.  

Sandro set up InitMarketing as a consultancy that develops marketing strategy for companies that use open source software in their solutions to customers.  Sandro’s executive experience at eZ Systems and Mindquarry and as a PHP developer serve him well here.  I’ve done strategy work for and with a number of open source related companies, built a product that used a breadth of open source software covered by a variety of licenses, and spent five years at Microsoft so have some understanding of the organization and its culture.   

As Sandro and I investigate the program, we are not without our misgivings.  Do a search for “open source” on the main Microsoft partner site and you discover mostly anti-open source competitive material in the initial search results.  Do the same search on the NXT partner site and you see a set of open source friendly case studies. (I’ve blogged elsewhere about the Microsoft message conflict problems.) And non-IE browsers don’t always render the site well.  And some parts of the partner world want you to install Silverlight “[i]n order to view the rich media content on this page ....”  None of this is encouraging to the average ISV living in an open source world.  

But this is also our opportunity.  The Microsoft programs were developed out of a culture of “open source equals Linux” and anti-Linux competitive work and sometimes reflect that history.  The NXT program is working to recognize the economic reality of the wealth of free and open source software running in the Windows world today.  We have an opportunity to open the discussion with the ISV team about what open source software actually means on the platform.  We have the opportunity to inform the business to mutual benefit.  

Sandro and I believe that we can start a more transparent discussion with Microsoft’s ISV team, starting here and now.  We’re excited at that opportunity. The ISV and open source teams at Microsoft are open to this discussion. We’re curious what the rest of our readers in our business community think.  Please share your thoughts below.  

Microsoft Partnerships, Open Source Software ISVs, and Culture and History

Last week, Mary Jo Foley offered commentary on Microsoft's open source software strategy with respect to independent software vendors based on an interview with Microsoft's Sam Ramji. Matt Asay provides good colour commentary on his blog. Each post focuses on the trustworthiness and competitive history of the company. Let's look at things from a different perspective.

First, if you sell software solutions, and one of the platforms you support is Windows, you're not alone. There is a lot of free and open source software that has company support that is deployed on Windows as one of its platforms. The "big" free and open source software names include:

JBoss: Claimed 50% deployment on Windows when they signed a partnership deal with Microsoft that included technical collaboration in September 2005.

SugarCRM: Claimed 35% deployment on Windows when they signed their technical collaboration deal with Microsoft in February 2006.

Eclipse: Several studies have been done over the past few years show Windows adoption for development and deployment (Dev/Dep):

(80%/60%) [Evans Data Corp., September 2006]
(62%/37%) [Evans Data Corp., September 2007]
(74%/47%) [IDC, Summer 2007]

While Eclipse itself isn't a company, many ISVs build businesses around the Eclipse project.

Alfresco: Claims 30% deployment on Windows according to their internal study published June 2007.

MySQL: Claims 40% download MySQL for Windows.

If Windows is one of the platforms you support, there should be nothing stopping you from considering joining a Microsoft ISV partner program. They provide lots of material and information to make it easier to develop, market, and sell on Windows than doing it all on your own. It absolutely benefits their growth. It benefits yours as well.

To provide the best possible experience for your customers, if the Windows version of your applications needs to use Active Directory, Microsoft Operations Manager, or any other Microsoft specific technology, then I'm going to assume you'll best serve your customers and architect the application accordingly for multi-platform development, deployment and support. We have been architecting applications to support multiple platforms for decades, and it's easier today with common tools and languages (most of them open source), and standards support across platforms. Again, better to join a Microsoft ISV program and cheaply get access to the best technical information possible for the platform to support your customers.

Some consider "doing business with Microsoft" tainted. There is no excuse for the behaviour we all saw from Microsoft with Netscape, or Sun with Java. If not for the high profile of the last U.S. Department of Justice investigation, the preponderance of email, and the ease with which one can search it, we wouldn't have such wonderfully embarrassing email examples that demonstrate how some people inside Microsoft think. (It makes you wonder what embarrassing gems are sitting in the email queues of other companies that haven't had this level of public legal scrutiny.) But most companies aren't in a position to demand their customers shift platforms. Even MySQL AB supported the SCO Openserver platform better to support customers.

[Contrary to popular belief, Microsoft didn't eat all its original ISV chain out of a rapacious need for growth. Customers demanded Microsoft provide a lot of tool support directly to simplify their development and procurement needs as the platform became ubiquitous.]

There are several things to understand about partnering with Microsoft that have a lot to do with the history and culture of the company. Microsoft was the PC software company, i.e. Microsoft customers had enormous deployments of small footprint inexpensive machines, versus the big server company (1990s) with far fewer big-iron multi-processor machines, versus the mini-computer company (1980s) with fewer less powerful systems, versus the mainframe company (1970s) with fewer still very large machines. While today a company will rack out thousands of blade servers in their back-room big-iron environment, in the 1980s and 1990s they didn't.

Microsoft developed programs throughout their channel sales and marketing organizations to enable them to scale their growth. Their margins were completely different from the other large software companies (e.g. SAP, Oracle) or UNIX OEMs. So a VMS or UNIX ISV may have seen OEM staff arrive on site to help migrate or tune an application to the platform because of the margins involved in that business, but Microsoft had to create a program to enable their DOS then early Windows ISVs to get access to expertise differently. Starting an ISV that developed PC-related software required a far smaller capital outlay and so there were a lot of such companies. Programs like MSDN were created. The ISV programs were by definition information-intense but engagement-soft. It was the smartest way to correctly serve both their ISV partners and their business model.

Hardware, software, and the Internet evolved. Windows became Windows NT has become Windows Vista and Server growing into the data centre. The big iron UNIX server world is evolving into scaled arrays of Linux servers. While these worlds collide in the data centre, the financial success of Microsoft remains tied to a culture of scaled programs. If you're an ISV that is used to the way IBM, Sun, or HP treat you, you may be surprised by a Microsoft program's lack of personal engagement.

There's another cultural practice that contributed to Microsoft's growth and success through the 1990s and that effects partner programs (and customers alike). Employees were allowed, indeed encouraged, to regularly shift positions within the company. In the early days it kept smart people that might be prone to boredom fresh and ensured culture wasn't lost through the employee leaving the company. That practice is still considered a strength today. Scale-out programs (not tied to specific people or relationships) supported this model.

But it means that any relationships built with the Microsoft by an ISV will likely change regularly. You're going to need patience and regular contact to follow-up with the program people you do meet, and [hopefully] get quick early warning when that person is about to change. You're also going to need determination to be the squeaky persistent wheel. You may be one US$10M/year company clamouring for attention from a Microsoft employee drowning on 150+ emails a day who is responsible for a program with 100 companies like you. Managing the relationship to continue to get attention requires perseverance. If you can grow your business better through a technical partnership similar to the Zend PHP relationship, you will need to be prepared for a very focused meeting because you'll likely get one shot to get the point across. (Hint: Start with the punchline then keep things short and direct.)

In the end, do what makes sense for your customers. Join the Microsoft ISV program if it makes business sense. Use the materials that help your business grow and ignore the rest. Do it with your eyes wide open and your expectations set. Best of luck!

GOSCON Discussion on Open Document Formats

Deb Bryant is blogging, which is great news. Deb is of course the creator and executive director of the Government Open Source Conference (GOSCON) that is held each year in Portland, OR.

The closing session of last Fall's conference was an executive panel on open document formats that included representatives from Sun, Microsoft, IBM, and Adobe. Deb's latest post points to the video of the panel, as well as the ongoing GOSCON forum discussion between the panellists. If you're interested in either the open document standards debate or government involvement in free and open source software, I would encourage you to have a read.

Visual Studio Ships the WiX Toolset

The title says it all. Rob Mensching blogged today that the Visual Studio team will be shipping the WiX toolset as product in the CTP release of Visual Studio Team System, code-named Rosario.

WiX is the toolkit for building better Windows installer packages. Rob released it as an open source software project almost four years ago on SourceForge using the IBM Common Public License, which was in and of itself a significant event in the history of Microsoft's open source flirtation.

The significance of this product release is that Microsoft is going the distance of creating an open source project community, then incorporating community work back into a shipping supported product. This is an enormous step. This is very different from how, for example, Services for UNIX ships a large collection of free and open source software as part of the product. All that software came into Microsoft via the Softway Systems acquisition.

Rob's post provides all the details. Congratulations to Rob and the rest of the WiX development community!

Acacia Patents, Red Hat, and Novell

Groklaw reports a patent infringement suit has been launched against Red Hat and Novell over Linux.

Take a deep breath. Be calm.

When the SCO Group suit was first launched, I was still at Microsoft. A number of people in the strategy team where I worked were excited because "finally the free and open source world was going to understand the importance of intellectual property." (These Microsoft employees didn't appreciate exactly how careful the community is about IP.)

I pointed out the following logic back then: IBM was investing a billion dollars in Linux. IBM could therefore allow a certain amount of legal debate to occur to determine how real a case SCO Group may or may not have had. A few millions in legal fees pales in comparison. In an absolutely worst case scenario, IBM could acquire SCO Group for O(US$150M) or less after a couple of years of legal punishment and the problem would go away. Again, a few millions in legal fees would be a cheap exploration. The SCO Group suit was NEVER a threat to Linux growth and deployment. Did the FUD slow the adoption curve, no doubt. But did it make any material difference in the use and growth of Linux? Hardly. And it's over now.

Microsoft should itself understand this business calculus around IP. They offered a lot of money to settle the Eolas suit. Eolas got greedy and refused the settlement. They "won" a half billion dollars in court. Now, when you're about to pay out a half a billion dollars, you can afford to spend a few millions more contesting the decision. Indeed, with that sort of money at stake you can afford to hire the cream of the graduating classes of Harvard, Yale, and Stanford Law to spend some time getting creative.

The U.S. Supreme Court continues to involve itself in the broken patent system. The Linux Foundation and the Open Invention Network are both geared for this particular fight. I have confidence that the Groklaw community will step into the breach of reporting and investigation again. IBM, Intel, and HP have a vested interest in the outcome, and nobody plays IP games the way IBM does. Over the next few weeks, lawyers will come together behind the scenes from all the interested parties on the defending side. Hopefully egos won't be too large, and a coherent plan of negotiation will emerge.

Some of the more interesting questions for me will be:

• Why Red Hat AND Novell?
• Why not Microsoft? (Acacia went after Apple who settled. Microsoft would seem to have deeper pockets than Red Hat or Novell. It would seem to be the more interesting business discussion.)
• If Microsoft is not involved, should they be? If Apple settled, and then this suit settles, Microsoft should know they're next on the list. Or are they trusting IBM et al to win this one for them?

To quote one of my favourite lawyers in this space:

“If the F/OSS community wants to be in commercial space, community members will have to learn to deal calmly with IP litigation. The F/OSS production model will work where it makes sense, and it will not work where it doesn’t. It’s really just that simple. Particular claims in individual suits—even one against a flagship program such as the GNU/Linux OS—will not determine the fate of the community. Such cases present factual issues that will get resolved one way or another; they do not represent a crisis for F/OSS production as a whole. Norm entrepreneurial rhetoric that plays off such cases should be treated as entertainment. Enjoy it if you like it, take inspiration from it if you must, but don’t confuse it with the way things actually get done.”

I'm sure some former colleagues at Microsoft are excited. Mr. Smith and Mr. Ballmer most assuredly. But just as with the SCO Group litigation, there is no reason to celebrate. They shouldn't confuse this with "the way things actually get done." Pax.

Storing Files on the Internet, Microsoft Style

That's the title of yesterday's New York Times article on Microsoft's launch of Office Live Workspace. There is so much that could be written here but let's let the professionals do it:

• Gina Trapani, Lifehacker goddess: "The catch? You can only edit the spreadsheet, Word doc or slideshow if you have MS Office installed on your computer. Uh, ok."
• Tech Crunch's Michael Arrington"Google and other Office competitors will be breathing a sigh of relief this morning - this is not a decisive move by Microsoft to crush the competition as they did with Netscape more than a decade ago. Microsoft has failed to understand the real power of Google Docs - easy, no hassle document creation, collaboration and access from the browser. And it will take them another two years of fidgeting before they really get scared and react properly. Microsoft is falling into the classic trap of failing to realize the disruptive nature of a new competitive technology, instead focusing on the massive revenues it generates from their aging Office suite. Google Docs is tearing the Office wall down, and Microsoft has failed to respond."

It's getting sort of crowded out there.

Tick. Tick. Tick. Tick. Tick. ....

Microsoft Free and Open Source Messaging Problems

Here's a Microsoft quote on Mozilla:

The efforts between Mozilla and Microsoft are a prime example of the cooperation that is necessary to ensure interoperability in today’s software ecosystem. While Microsoft competes with open-source products, it also recognizes that sometimes it must build bridges with its competitors, whether proprietary or open source, to assure the best outcome for its customers.

It's from a document on Microsoft's new Open Source website.

Here's another Microsoft quote on Mozilla:

The open-source development model has yet to demonstrate the ability to support profitable software businesses that can drive the coordinated research and testing necessary to sustain innovation. Many in the open-source software community have shifted to hybrid business models. They are making the same business decisions as any commercial software company in terms of what products and services to give away, what intellectual property to protect, how to generate revenue, and how to participate in the community.

This quote was captured by Stephen Shankland in an interview with Microsoft PR director Clint Patterson about the new work Mozilla is doing with Thunderbird, and whether Microsoft would help the Thunderbird devs get their MUA working with Exchange. Aside from the naïveté it demonstrates about Clint's understanding of open source software, communities, and software businesses, it creates a problem for all of us outside of Microsoft (and just a few inside). You see, we don't get to pick just one statement as the truth.

The larger problem is of course that culture comes from the top of any organization. The last quote we got from Steve Ballmer on the subject of open source software was of course back in July in the Financial Analyst Meeting:

Open source: open source has been the issue that surrounds us. Could a commercial model like Microsoft compete with open source? And we've worked very hard on making the value of a commercial company surpass what the open source community can deliver, because frankly, it's not a business model we can embrace. It's inconsistent with shareholder value. And we've done a very good job, as you'll hear; for the first time in a few years we took some share back from Linux on the server the last quarter. And I think we've really got the formula sorted through.

Not a model Microsoft can embrace. Inconsistent with shareholder value. This is probably the most polite he's been with respect to free and open source software even if he gets it wrong.

An interview with Ray Ozzie in April at MIX quickly dances away from discussions of open source to continue to beat the drum of services, the Web, and Windows. This wasn't long after Brad Smith continued to push the patent infringement message around Linux. Craig Mundie doesn't appear to have had a public opinion on free and open source software since the early Microsoft gaffs from 2000 through 2003.

So while the company leadership is no longer making rabid statements about free and open source software, neither do they have any commentary beyond IP infringement and bad for shareholder value. What else could Mr. Patterson say?

I think from this point forward, we need to help the Microsoft Open Source Software Lab. I would encourage every journalist that gets interview time with any of the Microsoft executive team to work in a few relevant questions about free and open source software communities and businesses. This will allow the proper tone to be set for all of us, and hopefully drive just a few of those execs back to the new Microsoft Open Source site to brush up on their messaging. And then maybe next year, Bill Hilf can be given a few minutes during the company meeting held every September to talk about that maturing positioning. Stranger things have happened.

(Mis-)Reporting Microsoft and the EU

PR is a wonderful thing.  The PR surrounding the EU decision on Microsoft begins with Microsoft gracefully accepting the court's ruling in a press release.

Well said!  Indeed, masterfully said.  Humble.  Conciliatory.  Quick to point out how the industry has changed.  Quick to point out the expanded investment in Europe.  Now let's look at the positioning.

The PR machine actually started the day before the announcement in the Financial Times ("Microsoft says rivals may rue siding with EU") with:

"Obviously, law that is made for Microsoft is going to apply to other market leaders as well. IBM, Google, Apple and others would have to look very carefully at the implications for their business models," — Brad Smith, Microsoft General Counsel

The New York Times started the week with "European Court Rejects Microsoft Antitrust Appeal".  The best quote:

“What this ruling will do is send a message to companies that if they establish a good market position with a successful product, they will be forced in Europe to essentially give up that product to their competitors.”  — Robert Kramer, a vice president of public policy for CompTIA, [a Microsoft ally]

The venerable Wall Street Journal further raises the spectre of anti-American sentiment under the banner "Microsoft Loss In Europe Raises American Fears", and picks up on the innovation thread with:

Microsoft's backers said the ruling will stifle innovation by making it tougher to design products with new features.

What utter PR-induced rubbish.  What is at question is NOT whether Microsoft is simply in a market leading position, or how they were shipping innovative features, but rather whether they abused a market dominant position with anti-competitive practices.  Here's how the EU actually describes a market dominant position in Article 82:

A dominant position is a situation of economic power held by a firm which allows it to hinder effective competition in the relevant market. It puts the firm in a position to exert considerable influence on the conditions in which competition is to develop, and to act without having to take that into account. ["Relevant Market" is defined here.]

One of the things that Article 82 goes on to discuss is "making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which have no connection with the subject matter of such contracts."  This would be something that U.S. Department of Justice followers might remember from the discussion around Microsoft OEM deals and bundling.  So the EU and the DoJ may not be as far apart as Thomas Barnett (U.S. DoJ) is quoted in the WSJ article.

Andy Updegrove's analysis is probably closer to reality.  Microsoft got off lightly here.  Just as US$100M in inbound litigation a year is the cost of doing business as a US$50B company, so to is this judgement.

While today's judgment is significant, it is worth noting that the penalties that Microsoft has incurred to date – roughly $1 billion, plus an obligation to reimburse a far smaller amount of legal fees – are minute in comparison to the magnitude of the profits it has garnered over the ten-year investigative period. During that time, its market share in both of the subject markets has grown dramatically. As a result, while Microsoft has nominally lost in court, it continues to win at the bottom line, given that the only impact on its products to date has been  more symbolic than effectual - the requirement to offer a version of Windows that does not bundle a free copy of its media player.

Stated another way, a billion dollars spread over ten years is $100 million a year.  During the same period, Microsoft revenues have grown enormously, to over $50 billion a year, fueled primarily by the continuing growth of its operating system and Office products.  It has been a tiny cost of business to pay, and a shrewd and cynical business decision to incur, a liability to pay one fifth of one percent of annual gross revenues to retain the freedom to dominate so lucrative a market in spite of the 2004 judgment.

It sort of puts all Mr. Smith's encouraging and friendly quotes about the growth of the Microsoft business over the past ten years in Europe into perspective.