Open source is bad for business, says Microsoft

Out-Law News | 04 May 2001 | 12:00 am | 2 min. read

A senior Microsoft executive yesterday warned against the risks of giving away software source code, describing the open source movements as a potential threat to the intellectual property of companies. However, he also said that Microsoft is giving away more source code than most observers give it credit for.

Speaking at New York University’s Stern School of Business, Craig Mundie, senior vice president of advanced strategies at Microsoft, said his company is following a "shared-source" philosophy to significantly expand its source licensing programs.

Mundie pointed to companies that have struggled or failed in recent months because they "gave away their content - the very thing they produced that was of greatest value - in the hope that somehow they would make money from advertising or subscriptions or a wing and a prayer."

Although its shared-source approach embraces some elements of the Open Source Software (OSS) movement, Mundie said Microsoft remains committed to pursuing the commercial software model to support a strong software business.

OSS refers to software that is developed, tested, or improved through public collaboration and distributed with the idea that the must be shared with others, ensuring an open future collaboration. The best know example is the operating system Linux, something which Microsoft possibly now sees as a threat to Windows. Linux users are among the biggest critics of Microsoft.

Open Source is also a certification mark owned by the Open Source Initiative. Developers of software that is intended to be freely shared and possibly improved and redistributed by others can use the Open Source trade mark, subject to their distribution terms conforming to the OSI's Open Source Definition. This requires that, for example, the software being distributed must be redistributed to anyone else without any restriction.

Mundie said: "There are elements to OSS that are good for our customers and partners, such as its fostering of the development community, improved feedback loops and augmented debugging. But there also are elements to be avoided" in the OSS model, he added, "such as a strong possibility of unhealthy forking, interoperability concerns and significant licensing issues." Forking is when the code base for a piece of software splits into separate directions, essentially becoming two or more different pieces of software.

Mundie argued that, among the risks in building a business model on open-source software, is the GNU General Public License (GPL) under which some open-source software is distributed. He said it "fundamentally undermines" the commercial software model because it compromises intellectual property protection.

If software companies are unable to make money from their innovations, then reinvest that revenue in research and development, "their business model just isn’t viable," he added.

The GPL’s viral nature poses a threat to the intellectual property of any organisation that derives its products from GPL source, Mundie said.

Mundie argued that Microsoft’s shared-source approach – like the open-source model – provides opportunities for researchers, customers and outside developers to examine Microsoft source code and help the company improve it. However, he added, maintaining control over its source code is crucial – not only for Microsoft’s long-term profitability, but also for preserving the stability, compatibility and security of its software for customers.

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