Microsoft Protection Beats Linux

By Peter Galli  |  Posted 2005-06-23 Print this article Print

Companies"> Under this latest indemnification move, Microsoft is also now offering its OEM partners trade secrets-related claim coverage, which had not been offered before, as this is a concern to its channel partners. Asked whether Microsoft and its channel partners had seen a spike in litigation specific to its products and IP, Kaefer said there had been a "modest rise, mostly in the OEM category, which is where most of the claims come, given that they are our largest volume distributors."
While Microsofts 200 largest OEM partners already had some liability coverage before, they are now all being given uniform terms—as part of the companys antitrust settlement with the Department of Justice—which are generally updated and published in August.
Microsofts ISV Royalty partners had also previously had geographic limitations on their coverage, but those have now been removed and they have the same protections as the OEMs. "This latest move shows our commitment to giving the same protections across the channel," Kaefer said. Microsoft also removed the previous caps for legal defense costs, but it introduced financial caps for settlements and damage claims. "Those caps are based on an equation that looks at the amount of business that particular channel partner has done with Microsoft over a period of time, essentially the value of our product that they shipped over a specific period of time, and that is the capped amount," he said. Microsoft believes this is a reasonable solution given what we see in the industry, Kaefer said. For example, Hewlett-Packard Co., Novell Inc. and Red Hat Inc. have all made moves recently to protect their enterprise Linux customers. Red Hats Open Source Assurance Plan is designed to protect customers Linux investments and ensure that they are legally able to continue to run Red Hat Enterprise Linux without any interruption. Novell, of Provo, Utah, set up a Linux Indemnification Program for its SuSE Enterprise Linux customers, under certain conditions, to protect against IP challenges to Linux and help reduce the barriers to Linux adoption in the enterprise. HP in September announced that it will indemnify its customers against any legal liability from the use of Linux. Microsofts plan goes further, according to Kaefer. "What you see from the Linux providers is not even close to the bar of what we are offering here," he said. Check out eWEEK.coms for Microsoft and Windows news, views and analysis.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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