Microsofts Motivation

By Peter Galli  |  Posted 2003-12-03 Print this article Print

Asked whether these moves will result in a significant increase in Microsofts monitoring and compliance, Kaefer said that will not be the case and the companys approach in general is to make this as simple as possible. "Patents, as a form of IP, rewards innovation and broadens the base of public knowledge. All of our patents are already today public knowledge as we detail these in the patent applications. So, by providing royalty-free access to the portfolio we are not giving any new information per se; we are just clarifying the rights they have going forward to work with that information," he said.
There are also other forms of IP, including trade secrets and technical know-how, which are shared in other, more restrictive ways through programs like Microsofts Shared Source programs, he said. But the latest moves give people a clear way of licensing that technology and implementing on top of it.
"Our intent is to pretty broadly license. Our patent policy will say that, and we already do license a substantial portion of our patents via cross-licensing agreements with companies like Cisco Systems [Inc.] and Hewlett-Packard [Co.]. We are, in some ways, reinventing the wheel as our IP portfolio has grown and people are more interested in it," Kaefer said. These moves are not expected to be particularly material to the financial well-being of Microsoft, according to Phelps. "Thats not our goal. Our goal is to find ways to work better with those core communities and to put a responsible program together that benefits us all," he said. Asked whether the motivation for these changes was the antitrust settlement with the government, Phelps insisted that it was not connected to that action. But when pushed about the unhappiness around the protocol licensing aspect of that settlement, he conceded, "It does factor into the question of whether we have developed a rational program that people want to take advantage of. "Thats a different point, and I think we have done that and will do that," he said, stressing that he was hired to do this before the antitrust settlement was reached. Microsoft is dramatically increasing its patenting efforts, he said, and the company now has 4,000 patents worldwide and some 5,400 pending. As such, Microsoft is taking a serious look at how it can optimize that for the benefit of licensees, he said. Asked about the competitive threat of making its technologies and patents widely available to its competitors, Phelps said there naturally are some trade secrets that will be kept within the company. Microsoft will also not license the "look and feel" technologies that uniquely identify its products. "But we are going to be more open and expansive than not," he said. Some competitors, however, are suspicious of the move. Jonathan Schwartz, executive vice president of software at Sun Microsystems Inc., in Santa Clara, Calif., told eWEEK he will take a look at the licenses, but doesnt expect much. "Microsoft is notorious for using the word open and then delivering a multipage licensing agreement," he said, adding that Sun has no interest in having to pay Microsoft "punitive royalties." "If they really want to make it open, they should use a royalty-free license like the one we use for StarOffice. Microsoft is feeling very threatened and vulnerable at this point. We have just passed more than 50 million downloads of StarOffice and OpenOffice, and I think the reticence of large organizations to continue licensing Microsoft Office is due to the fact that it is a closed and very expensive product. "Microsoft is using any spin they can at this point, and I would be stunned to see anyone take them up on these latest licenses," he said. Discuss This in the eWEEK Forum

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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