Microsoft enjoyed some positive news this week, at least on the legal front: the company announced Aug. 4 that it had settled its patent-infringement cases with Salesforce.com, heading off what promised to be a protracted legal battle.
"Salesforce.com will receive broad coverage under Microsoft's patent portfolio for its products and services as well as its back-end server infrastructure during the term," read an Aug. 4 statement issued by Microsoft. "Also as part of the agreement, Microsoft receives coverage under Salesforce.com's patent portfolio for Microsoft's products and services."
Microsoft initially filed suit against Salesforce in May, alleging infringement of nine patents. Not to be outdone, Salesforce filed a lawsuit of its own in June, accusing Microsoft of violating five patents. In a move seemingly calculated to drive Redmond executives' blood pressure through the roof, Salesforce also retained David Boies-who originally represented the Justice Department in its landmark antitrust suit against Microsoft-as counsel.
Despite those mutual accusations of intellectual-property violation, Salesforce will be the one compensating Microsoft for patents, although neither company disclosed the exact amount. Whatever the final monetary agreement, though, it could very well prove less expensive for Salesforce than a courtroom brawl; the sheer vitriol exhibited by both companies over the summer-Salesforce CEO Marc Benioff, not exactly a shrinking violet of an executive, took the opportunity of a May earnings call to refer to Microsoft as a collective of "patent trolls" and "alley thugs"-led some pundits and analysts to believe a true battle royale was in the making.
However, at least one analyst feels that Salesforce may have underestimated its opponent's capacity for legal aggression.
"Salesforce both appeared to infringe in areas...where companies like Microsoft are most sensitive to infringement, and then rubbed Microsoft's face in it by effectively saying, -So what are you going to do about it?'" Rob Enderle, principal analyst of the Enderle Group, wrote in an Aug. 5 email to eWEEK. "They were apparently betting on some kind of massive Open Source defense and didn't realize they were believing in the technology equivalent of Santa Claus."
For Salesforce, the settlement's effects could be long-lasting.
"It means that Salesforce will likely have to change aspects of future products so they don't infringe on critical areas," Enderle continued, "share some of their profits with Microsoft, and go back to running their slightly less profitable business. Microsoft gets some money (likely not material) and enhances their reputation as a company not to be lightly messed with."
The settlement could also affect Microsoft's cloud prospects, at least when it comes to dealing with other companies in the space.
"It should also improve Microsoft's chances of getting similar agreements from others over time, which, collectively, is material to the company," Enderle added.
Even as Microsoft moved past its Salesforce conflict, it also continued to distance itself from the sad legacy of Windows Vista: analysis firm Net Applications reported this week that, according to its own estimates, the market-share for Windows 7 passed that of Vista in July.
Windows 7's market share that month reached 14.46, according to the firm, passing Vista's 14.34 percent. That represents a significant change from October 2009, the month of Windows 7's release, when Vista ran on 18.83 percent of personal computers.
However, Net Applications also noted that "Windows XP is still the leading operating system by far, with double the share of Vista and 7 combined." Despite Microsoft pushing users of the decade-old Windows XP to transition to Windows 7, a number of businesses and consumers seem equally determined to stay with an operating system that, despite its somewhat aged interface, is well-baked into their IT infrastructure.
Recognizing that, Microsoft announced in July that Windows XP Professional users could keep their downgrade rights through the life cycle of Windows 7. Previously, those rights had been scheduled to expire July 12, with the availability of the Windows SP1 beta.
"Our business customers have told us that removing end-users downgrade rights to Windows XP Professional could be confusing," Brandon LeBlanc, a spokesperson for Microsoft, wrote July 12 on "The Windows Blog," "given the rights change would be made for new PCs preinstalled with Windows 7 and managing a hybrid environment with PCs that have different end-user rights based on date of purchase would be challenging to track."
Net Applications also estimated July gains for Internet Explorer, which it said now occupies 60.74 percent of the browser market-an increase from June's 60.32 percent. The firm estimated Firefox at 22.91 percent, followed by Chrome with 7.16 percent, Safari with 5.09 percent, and Opera with 2.45 percent.
Whatever lies behind those gains, however, Microsoft has also faced questions about Internet Explorer's priorities when it comes to privacy: a widely circulated Aug. 1 article in The Wall Street Journal suggested that, when the Internet Explorer team wanted to design software that counteracted common Web-tracking tools, Microsoft executives resisted the initiative on the theory that it would impede their online-ad selling operation.
That article quoted Brad Smith, Microsoft's general counsel, as saying that the company tried to combine those differing viewpoints into a single initiative that balanced "the privacy interests of consumers and the critical role advertising plays in content."
Microsoft responded to those privacy concerns in an Aug. 1 posting on The Windows Internet Explorer Weblog, insisting that "browsing the Web is fundamentally an information exchange" and that "your Web browser offers information in order to get information." But Microsoft's opponents in the space may nonetheless try to leverage those concerns to competitive advantage.
Microsoft's other Web initiatives this week included the integration of a handful of new features into Bing Maps, including a Taxi Fare Calculator and a World of Football app that displays soccer scores from around the world and zooms into stadiums. Whether Bing's more colorful and detailed maps, accessible only by downloading the newest version of Silverlight, are enough to pull users from Google Maps is an open question; but along with the Salesforce settlement this week, it suggests that Microsoft is paying more attention to cloud-based applications than ever.