Channel Finds Relief in Microsoft Promise

News Analysis: While the company's channel partners weren't screaming for IP protection, they say the announcement puts them much more at ease.

Microsofts decision to protect its channel partners and ISVs against any potential intellectual-property disputes wont radically improve its market or credibility.

But if it had not stepped done so, both channel partners and end users would have become increasingly uncomfortable using products from a company whose products are so obvious a target.

"This is very much a top-of-mind issue in the reseller channel," said Michael Schwab, vice president of purchasing at Harrisburg, Penn.-based D&H Distributing Co., a national distributor that logged more than $1 billion in sales at a growth rate of 24 percent during 2004, according to Hoovers Inc.

"The reality is that distributors and resellers rely on the hardware manufacturers or the software publishers to ensure that proper intellectual property rights are observed," Schwab said.

"Historically, everyone sold products under the assumption that the manufacturer would step up if there were any problems."

"Its always been a puzzle to me that people have been willing to take or resell Microsoft software without indemnity protection," said Mark Radcliffe, a partner at DLA Piper Rudnick Gray Cary, a national law firm with an extensive intellectual property practice.

/zimages/6/28571.gifClick here to read more about how bad patents are threatening innovation in IT.

"Obviously its part of the continuing battle to differentiate Microsoft products from Linux," Radcliffe said. "But Red Hat and some of the other Linux companies offer indemnifications already, so the differentiation wont be as dramatic as Microsoft would probably like it."

"It will make the distributors more comfortable," he said.

Which isnt a trivial issue, according to Schwab, who views the announcement as confirmation that Microsoft will stand behind its products and its resellers, as its customers expect it to.

"Then you can be confident that you are putting products in the hands of your customers that could in no way cause you any problems defending the intellectual property rights of what youre selling," Schwab said.

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