This paper examines Microsoft's 2006 legal campaign against the Free and Open Source Software (FOSS) community, in which the company alleged infringement of 235 patents by Novell and other open source publishers. Rather than suppressing FOSS, the legal threat galvanized developers and distributors to invest heavily in security, scalability, stability, and fault tolerance. The paper traces how the Microsoft–Novell settlement reshaped the competitive landscape, how FOSS platforms came to dominate enterprise web servers, and why Total Cost of Ownership considerations increasingly favor open source solutions over proprietary Microsoft licensing models. The analysis concludes by noting how FOSS advancements continue to reshape enterprise computing and cloud economics.
Microsoft has always vigorously protected its patents and sought legal defense against competing technologies and businesses that threatened its core business model. In 2006, Microsoft mounted a comprehensive and well-orchestrated attack on open software, alleging that 235 of its core patents had been infringed upon, and that it was owed damages from Novell and several other publishers of open source operating systems. Microsoft believed it would achieve a quick and decisive victory over the Free and Open Source Software (FOSS) community, establishing a defensible legal precedent and creating a long-term barrier to FOSS's impact on the Microsoft business model (McGhee, 2007).
This did not occur, however, and by the close of 2006, Microsoft and Novell brokered an agreement that saved each party millions of dollars in legal fees. What Microsoft had intended as an inhibitor to the market actually turned into a strong catalyst for growth within the FOSS community. Developers and distributors of FOSS operating systems and applications rallied around the decision and sought to make their standard pervasive throughout corporate America (Miller, Voas, & Costello, 2010).
FOSS, which had initially been viewed as less secure and reliable than Microsoft's proprietary software, chose as an industry to concentrate on the key criteria that corporate purchasers cared most about. This included heavy investments in auditability, security, stability, and fault tolerance, in addition to application scalability (McGhee, 2007). This strategy proved effective and led to FOSS becoming the new standard in many enterprises.
When Microsoft began its legal assault on FOSS, many industry and financial analysts predicted its demise and eventual re-licensing under the Microsoft brand (McGhee, 2007). Ironically, the FOSS community took this as a call to action and invested heavily in security, scalability, and stability. As a result, operating systems based on this standard now dominate enterprise web servers for website hosting and blogging, including platforms such as Facebook and WordPress (Miller, Voas, & Costello, 2010).
The Total Cost of Ownership (TCO), which is a key determinant of the economic value gained from IT investments, increasingly favors FOSS today, given the complex, costly, and often confusing models that Microsoft uses to price its products (Miller, Voas, & Costello, 2010). FOSS is succeeding because it produced a superior server operating system while drastically reducing the complexity of licensing, and by providing a stable platform on which to operate enterprises (Wormser, 2010).
Microsoft finds itself needing to emulate the competitor it tried to crush with legal precedent and claims of patent infringement. The many advantages of FOSS from a financial standpoint, especially in uncertain economic times, are making its value grow over time in enterprises (Miller, Voas, & Costello, 2010). With FOSS advancements at the server level, the open source operating systems that comprise this area of software will continue to accelerate and reshape the enterprise computing landscape. Furthermore, this approach to defining software quality and performance is reordering the proprietary software arena, as cloud computing also acts to change the economics of software.
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