Microsoft cracks open window on trade secrets, becomes more open-source friendly

While the software giant claims its actions will encourage interoperability, Microsoft is also looking to meet legal requirements set after a European court ordered the company to be more open last September.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 2/21/2008

Microsoft Corp today made significant changes to its business model, taking steps toward open-source initiatives and sharing some of its application programming interfaces (API) and communications protocols free of charge with developers outside its corporate structure.

The Redmond, Wash-based software giant said it is immediately implementing four new interoperability principles and corresponding actions across its high-volume business products: ensuring open connections; promoting data portability; enhancing support for industry standards; and fostering more open engagement with customers and the industry, including open-source communities. Microsoft named Windows Vista, Windows Server 2008, SQL Server 2008, Office 2007, Exchange Server 2007, and Office SharePoint Server 2007, and future versions of all these products as the high-volume business products impacted by today’s actions.

In doing so, Microsoft will publish on its Web site documentation for all APIs and communications protocols in the high-volume products that are used by other Microsoft products. The company said developers will not need to take a license or pay a royalty or other fee to access this information.

Microsoft will also immediately openly publish more than 30,000 pages of documentation for Windows client and server protocols that were previously available only under a trade secret license through the Microsoft Work Group Server Protocol Program and the Microsoft Communication Protocol Program. Protocol documentation for additional products, such as Office 2007, will be published in the upcoming months, the company said.

Moreover, Microsoft is taking steps to make its standing on patents more clear. The company said it will indicate on its Web site which protocols are covered by Microsoft patents and will license all of these patents on “reasonable and non-discriminatory terms, at low royalty rates.” It will further make available a list of specific Microsoft patents and patent applications that cover each protocol.

Separately, Microsoft is providing a covenant not to sue open-source developers for development or non-commercial distribution of implementations of these protocols. Microsoft said developers will be able to use the documentation for free to develop products and that companies that engage in commercial distribution of these protocol implementations will be able to obtain a patent license.

The company also said as part of the new business practices it will document on its Web site how it supports industry standards and extensions, and will document for the development community how it supports such standards, including those Microsoft extensions that affect interoperability with other implementations of these standards. Additionally, Microsoft said it will make available a list of any of its patents that cover any of these extensions, and will make available the necessary patent licenses.
 
Specific to the open-source community, Microsoft’s announced actions will see it launch what it is calling the Open Source Interoperability Initiative, aiming to promote and allow more interoperability between commercial and community-based open-source technologies and Microsoft products by providing resources, facilities, and events, including labs, plug fests, technical content, and opportunities for ongoing cooperative development. Microsoft further announced an online Interoperability Forum to encourage industry dialogue and a Document Interoperability Initiative to address data exchange between widely deployed formats.

Lastly, Microsoft’s plans will see it design new APIs for the Word, Excel, and PowerPoint applications in Office 2007. The company said doing so will allow developers to plug in additional document formats and to allow users to set these formats as their default for saving documents.

"These steps represent an important step and significant change in how we share information about our products and technologies," Microsoft CEO Steve Ballmer said in a statement this morning. "For the past 33 years, we have shared a lot of information with hundreds of thousands of partners around the world and helped build the industry, but today's announcement represents a significant expansion toward even greater transparency. Our goal is to promote greater interoperability, opportunity and choice for customers and developers throughout the industry by making our products more open and by sharing even more information about our technologies."

EC to Microsoft: We’ve heard this before

To be true, today’s interoperability moves are about more than technology. Microsoft has on more than one occasion found itself entangled in legal proceedings concerning antitrust business activity. Indeed, in September 2007 the European Court of First Instance (CFI) upheld a more than $736 million (497 million Euros) fine Microsoft was charged with for infringing the European Commission (EC) treaty rules on abuse of a dominant market position. That CFI ruling also ordered Microsoft to become more open in its business practices.

In its own statement today, the EC made note Microsoft’s announcement and pointed out that the planned business strategy changes do not relate to the question of whether or not the company has been complying with European Union antitrust rules in the past. While the EC said it would welcome any move toward genuine interoperability, it reminded of previous similar statements from Microsoft that have yet to prove its commitment to interoperability.

“The Commission notes that today's announcement follows at least four similar statements by Microsoft in the past on the importance of interoperability. In January 2008, the Commission initiated two formal antitrust investigations against Microsoft – one relating to interoperability, one relating to tying of separate software products.  In the course of its ongoing interoperability investigation, the Commission will therefore verify whether Microsoft is complying with EU antitrust rules, whether the principles announced today would end any infringement were they implemented in practice, and whether or not the principles announced today are in fact implemented in practice. Today's announcement by Microsoft does not address the tying allegations,” the EC concluded.

Microsoft said that the Interoperability Executive Customer Council, an advisory organization established in 2006 and consisting mainly of chief information and technology officers from more than 40 companies and government bodies around the world, will help guide it in its initiatives announced today.

"As we said immediately after the CFI decision last September, Microsoft is committed to taking all necessary steps to ensure we are in full compliance with European law," Brad Smith, Microsoft general counsel, said in the company’s statement. "Through the initiatives we are announcing, we are taking responsibility for implementing the principles in the interoperability portion of the CFI decision across all of Microsoft's high-volume products. We will take additional steps in the coming weeks to address the remaining portion of the CFI decision, and we are committed to providing full information to the European Commission so it can evaluate all of these steps."