KnowledgeTree Blog

OSBC and the Microsoft Open Source ISV NXT Forum

I’ve recently returned from the Open Source Business Conference 2007 held in San Francisco. This year’s event was impressively organized, with great speakers, panels and the like. Well done to Matt Asay and co. for a great event.

A day prior to the conference, Microsoft held a forum for American Open Source ISVs. I managed to wangle an invite for KnowledgeTree and found the event extremely valuable, but not necessarily due to the speakers but more the opportunity to network with a smaller, more focussed group of ISVs and Microsoft guys than at other larger events. One of the great things about these smaller Microsoft events is that the Microsoft execs tend to speak somewhat more candidly. The timing of the forum was both good and bad. A week prior to the event Fortune Magazine published the now infamous article wherein they quoted Microsoft General Counsel Brad Smith and licensing chief Horacio Gutierrez as saying Linux and Open Source projects violated 235 Microsoft patents. Fabrizio and the Funambol team captured the moment nicely in a cheeky t-shirt which was distributed at the Forum and OSBC.

Microsoft’s Sam Ramji and co. certainly had their work cut out responding to the many queries, concerns and bafflement. Many of the ISVs present want to work more closely with Microsoft. More than 60% of KnowledgeTree’s approximately 12000-15000 monthly open source downloads are our Windows stack installer. One of the primary differentiators of our commercial offering is its tight integration with the Windows desktop and Microsoft Office. Our customers and open source users are running on Windows, like Windows and intend on staying on it. A strong relationship with Microsoft is therefore important for us to be able to continue delivering to our users. Building that strong relationship with Microsoft, which is currently exhibiting many faces is difficult for open source ISVs. Will a deeper relationship with Microsoft alienate our open source communities? Will we become targets for patent claims? Will we be caught in an FSF-sponsored license quagmire?

Sam’s candid answers went a long way to allaying my fears:

• I’m no longer entirely anti- the Novell deal: indemnifying ones customers and the parties to a strategic partnership from each other’s patent claims is business. It happens all the time and is not publicized. Working on Linux/Windows interoperability is good, patent indemnification at this level is unremarkable, bar for the newsworthiness of the participants. Sitting on an OSBC panel, Alison Randal from O’Reilly felt that the deal would have a neutral effect on open source. Perhaps.
• Microsoft is a very large organization. There are many intelligent, articulate people with different opinions working for the company and they tend to voice these opinions. It appears Bill Hilf, Sam Ramji and co. have one stance and Brad Smith and co. have another. I guess this is healthy internal to an organization but external communication needs to be unified and clear and speak to the concerns of all stakeholders (shareholders, partners, customers, employees). I’m still not entirely sure which camp will win out. And so on to more about corporate messaging and patents…

I do still feel strongly that software patents have a significant chilling effect on entrepreneurial innovation. I’ve purposefully used this term: the arguments for software patents have centered around corporate innovation and how investment in such requires patent protection. I’m not entirely convinced of this. There is far too much prior art and obviousness in much of software and software development itself is too fluid in many respects to be captured in a formal patent (an argument for another time). Back to entrepreneurial innovation: great leaps in innovation happen at the fringes of economic activity. Entrepreneurs are the drivers of this innovation but they are by their very nature not capitalized as heavily as corporates. They most certainly do not have the money, the skills or the time to do extensive investigations in to whether the mechanism they are using to achieve their aim is infringing on somebody’s patents. The fear of infringement has a chilling effect on this entrepreneurial activity.

In the case of VC-backed software startups, management of these companies appear to only register patents for (a) defensive reasons and (b) so that investors get a warm fuzzy feeling (which is wound up with perception of value and also the risk management approach of (a)). If you ask any economist, spending hundreds of thousands of dollars on defensive patents is not an appropriate allocation of resources (unless you’re an attorney!).

At the Microsoft ISV Forum I was struck by how my clearly more Eurocentric perspective on IPR and software patents (I’m South African and KnowledgeTree is based in Cape Town) differed with those of the Americans sitting around me. KnowledgeTree was the only non-American ISV present (apart from our friends at BitRock) and I was evidently coming from a world where software patents were not a fait accompli. The war to capture the minds of the European Parliament is still on the go. Many a battle has been won but the war is certainly not over.

When pressed, Sam and co. felt that US patent reform was perhaps necessary.

So, given that the US PTO’s approach to software patents is broken and that it is costly to Microsoft and the other majors, why is Microsoft still pressuring the EU for software patents modeled on the US? At the Forum, I put this to the Microsoft guys. Stephen Walli picked up on this in his excellent blog on this same topic.

Microsoft: if you’re serious about reforming the US patent regime, stop pressuring the EU to implement a broken system and get on with helping fix it!