Why Microsoft's New Open Source Company?

Microsoft has announced a new, wholly-owned subsidiary to allow it to engage open source projects. Decent explanations of why they have done this are a bit thin on the ground despite widespread coverage of the news itself, which their PR firm...


Microsoft has announced a new, wholly-owned subsidiary to allow it to engage open source projects. Decent explanations of why they have done this are a bit thin on the ground despite widespread coverage of the news itself, which their PR firm must have been pushing heavily.

Given the Microsoft employee tapped to run this new subsidiary - Jean Paoli - is careful to say this move changes nothing about existing engagements by Microsoft projects, why are they doing it? Here are some possible reasons - all of them educated speculation for now, ordered in increasing probability.

  1. Consolidate the standards and open source teams under a better name than "interoperability". Interoperability may sound good to some audiences, but it reeks of "our way or the highway" and "isolated competing teams" to lots of developers and has little meaning in the world of open source where words like "contribute" and "participate" have more meaning. This new subsidiary has Paoli's existing Interoperability Team at its heart, now nicely rebranded. It's an expensive way to rebrand though, so I'm sceptical.

  2. Create a career path. Jean Paoli was one of the people named on the original XML specification and has been a loyal long-term player in the standards arena. High-powered standards wonks are like spymasters; necessary to their political masters but with work that is usually better unseen. The result is a lack of career path in many corporations. This move could be a reward for Paoli and his team, recognising his long-term loyalty to the company. It would be a charming tale if this was true, but again it seems an expensive and complex approach to staff retention, especially in an employers' market.

  3. Firewall open source licensing. Licenses like the GPLv3 are an inescapable fact of open source and they do a fine job protecting their communities. However, they do that by placing responsibilities on corporate participants, especially on how they handle patents. Most modern licenses include a "patent peace" clauses, removing rights from community participants who turn out to be patent litigators.

    Those clauses also give broad patent licenses to a contributor's patent portfolio. Additionally, most open source licensing experts believe all open source licenses give implied licenses to patents infringed from a contributor's portfolio. A separate subsidiary provides an "arms length" relationship so that license terms can't affect the parent company and unintentional free patent licenses don't get given away. It wouldn't do to be unable to collect fees from open source competitiors.

  4. Firewall patent liability. After years of scepticism, Microsoft became an ardent admirer of software patents and especially their earning potential when embedded in both de facto and de jure standards (a skill they gained when they hired its "inventor" away from IBM). Today, they are actively lobbying for "RAND" (arbitrary fee-based licensing) patent terms to be allowed in standards so they can grow the business of taxing other companies' success. But there's a corresponding risk of taint from planting these patent bombs in standards. By having the work done in a separate company, Microsoft limits the liability it faces from those seeking fees and alleging plagiarism.

Both points 3 and 4 are widely understood to be part of the reason Microsoft started the Outercurve Foundation, as a destination to outsource open source projects it wanted to start while isolating itself from any perceived risks its imaginative legal time might envisage. Of the four possible reasons, those are the two that seem most likely to me. Jean Paoli says:

"This structure will make it easier and faster to iterate and release open source software, participate in existing open source efforts, and accept contributions from the community. Over time the community will see greater interaction with the open standards and open source worlds."

The new "Microsoft Open Technologies, Inc." provides an ideal firewall to protect Microsoft from the risks it has been alleging exist in open source and open standards. As such, it will make it "easier and faster" for them to respond to the inevitability of open source in their market without constant push-back from cautious and reactionary corporate process.

In that light, it sounds like a smart move. If you know more, let me know - I'll be watching closely.

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