10 Feb 2003


There’s plenty of uneasiness in Redmond, Washington, these days. Microsoft has begun to internalize the recognition that the next, and quite probably final, period of its existence will be dominated by competition with free software. That competition presents challenges the monopoly has never faced before, and already it has become necessary, at what Microsoft hopes is still an early stage in the confrontation, to take steps that no other competitor has ever had the power to force.

Competing with free software is problematic for Microsoft for many reasons. There’s no company to acquire, in the first place, in order to incorporate or suppress attractive competing products—a strategy that the monopoly has pursued so often and so successfully in the past. Because free software is continually modified and improved by all its users, there’s no “evolutionary dead end” argument with which to scare customers: someone choosing to use free software is never going to be left with an unserviceable product whose maker has gone out of business, leaving the code “orphaned” in the face of constantly shifting technology. Microsoft’s implicit message to its customers has been “We’re always going to exist; our competitors, whose products you are considering, won’t last forever.” But technically sophisticated corporate and governmental users now realize that the free software codebase will last indefinitely, capable of renewal and replacement for as long as its users need it. No matter how long Microsoft lasts, free software will last longer.

As I have said in this space recently, one of the hottest fields of competition at the moment is also the largest aggregate software market on earth: the world’s governments. More than sixty-five countries and dozens or hundreds of political subdivisions are actively considering legislation or regulations favoring the use of free software for government computing. National governments have begun actively considering use of free software for all the reasons (price, flexibility, power of modification—in other words, freedom) that other corporate and individual users also identify. But they have at least one additional reason for adopting free software: they suspect that Microsoft has done favors for the US intelligence community, embedding “back doors” in Windows that permit US listeners to monitor encrypted communications generated using the Windows Cryptographic Applications Program Interface (CAPI). Last month, in an unprecedented move, Microsoft announced that it will release Windows source code for review by foreign governments, to help them evaluate whether Windows is a good public purchase. In addition, Microsoft will allow foreign governments to connect their own CAPI to Windows, supposedly in order to eliminate any risk that US intelligence services have embedded spy code in the company’s products.

Unprecedented as the program to show source to foreign governments and permit limited modification was, Microsoft took an even more extraordinary step in its recent filings with the US Securities and Exchange Commission. The SEC requires publicly-traded companies to file quarterly statements indicating any major changes in position since the publication of their annual reports, and disclosing any new or additional risks to their profitability. Microsoft now states that “the popularization of the Open Source movement continues to pose a significant challenge to the Company’s business model, including recent efforts by proponents of the Open Source model to convince governments worldwide to mandate the use of Open Source software in their purchase and deployment of software products. To the extent the Open Source model gains increasing market acceptance, sales of the Company’s products may decline, the Company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline.”

Naturally Microsoft has always found it desirable to emphasize in its SEC filings that it faces market competition: its antitrust difficulties render it eager to discuss the highly competitive nature of the software market at every opportunity. But this decision to acknowledge free software as a fundamental challenge to the Microsoft “business model,” along with the quite specific acknowledgement that prices of its products will have to be cut, represents a watershed moment in the monopoly’s history. The global investment community now has the best possible authority for taking a second look at its unquestioned belief in Microsoft’s durability: the official statements of the company itself.

These new statements, of course, like all other Microsoft pronouncements on our movement, eschew two words: “free software.” The company still cannot acknowledge the fundamental challenge to its way of doing business, which is users’ need for freedom: the freedom to understand, fix, improve, and share the software that they depend on. Microsoft likes to refer to “open source,” which sounds like something Microsoft could do itself. Its so-called “shared source” initiatives, including the most recent one for foreign governments, are designed to mislead in precisely this way. But what Microsoft cannot do, what it will die trying to prevent us from doing, is to make software free. “Freedom” is the word the monopolist cannot use, which is why, at the beginning of the end of the Microsoft Era, Free Software Matters.

This column was first published in the UK in Linux User. It is also available in PostScript and PDF formats.

permalink | columns/lu | 2003.02.10-00:00.00

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