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<h1>Halloween Document III (Version 1.5)</h1> *note: some links have died, but have been left so for historical reasons.
<h2>Microsoft's Reaction to the "Halloween Memorandum"</h2>
{
Microsoft's famously adept spin doctors took some time to develop a
response to the Halloween Documents. When first contacted in Monday,
VinodV (the author of the original memoranda) said he could ``neither
confirm nor deny'' their authenticity.<P>
Pressed, Microsoft admitted the authenticity of `Halloween I' later on
Monday -- perhaps because, as damning as it is, lying about it would
have been even more dangerous while the U.S. Department of Justice's
investigators are still pursuing antitrust action against the
company. <P>
But for most of the three days since, Microsoft HQ in Redmond has been
doing its damndest to ignore the existence of the Halloween Documents
and downplay their content.<P>
Gates's flacks have not been able to remain entirely silent, however.
Prominent Linux user Henk Kloepping succeeded in extracting a
statement (in English) from Aurelia van den Berg, the Press and Public
Relations manager of Microsoft Netherlands.<P>
It's possible that this statement was simply a local initiative.
Given Microsoft's famously centralized management, on the other hand,
it's more likely a trial balloon for a P.R. line
which, if it's well received, will be peddled in the U.S. Let's
examine it together, shall we?<P>
The original of this page is at <a
href="http://www.opensource.nl/articles/1998110501.html">http://www.opensource.nl/articles/1998110501.html</a>.
As usual, my comments are in green and curly-bracketed.<P>
1.1 -- First annotated, Nov 5 1998 (day of release).<P>
1.2 -- (6 Nov 1998) In a strange twist, Henk Kloepping reports having
received an unhappy phone call from Ms. van den Berg, who allegedly
claims that ``the memorandum issued was not written by her personally,
but came from MS itself'' and asked that her name be removed from the
Web page. Ms. van den Berg has not contacted me directly.<P>
Indirectly backing up Henk's report, there is now an <a
href="http://www.microsoft.com/NTServer/nts/news/mwarv/linuxresp.asp">
official response</a> which is quite similar to Ms. van den Berg's
statement. It is notable mainly for the clever way that VinodV's
boss dodges the question of what the juicy phrase ``<FONT COLOR="red">
deny OSS projects entry into the market</FONT>'' actually means.<P>
1.3 -- (7 Nov 1998) Minor additions.<P>
1.4 -- (16 Nov 1998) Added a hint for the sarcasm-impaired.<P>
1.5 -- (1 Oct 1999) Corrected a stale URL.<P>
}</FONT>
<H2>On the memo:</H2>
It appears to be a document written within Microsoft in August, with some
annotation by others.<P>
<FONT COLOR="green">{
That's right. Microsoft HQ conceded that much to Wired, the Wall
Street Journal, and the New York Times three days ago.
}</FONT><P>
It is routine and appropriate for Microsoft - and we would assume all other
vendors - to research, write about, and assess all competitors ... both from
a business model point of view and from a technical point of view.<P>
<FONT COLOR="green">{
Yes, and it's routine and appropriate for vendors to discuss the
measures they'll take against the competition. What is <em>not</em>
quite so routine is to see the discussion imply a cold-blooded
acceptance of methods including <a
href="http://www.geocities.com/SiliconValley/Hills/9267/fuddef.html">
FUD tactics</a> and dirty tricks such as ``de-commoditizing'' open
standards into monopolistic lock-in devices.
}</FONT><P>
It is not an "official position" by Microsoft on Linux. It is a technical
analysis written by an engineer in a staff capacity, and designed to
encourage discussion.<P>
<FONT COLOR="green">{
Written by a staff engineer -- with contributions, endorsements, and
reviews by two Program Managers, the Senior Vice President in charge
of NT development, and two members of the eight-person Executive
Committee (Microsoft's Politburo, answering only to Bill Gates). The
only way this group could be any more ``official'' is if BillG himself
were in it.<P>
Given the participants and the content, the lack of an ``official''
stamp seems more like a device for preserving plausible deniability
than anything else.<P>
Ironically, if we take Ms. van den Berg at her word, the memos are far
<em>more</em> more damning -- because that would imply a milieu in
which FUD and monopolistic dirty tricks are not merely the province of
a few top executives, but a pervasive part of the culture clear down
to the level of staff engineers.
}</FONT>
<H2>On Linux:</H2>
Sometimes Linux competes with Windows NT. This is hardly news. But it is not
NT vs Linux.<P>
<FONT COLOR="green">{
Considering that NT and Linux are the only two operating systems
actually gaining market share, methinks Ms. van den Berg doth protest
a little too much.
}</FONT><P>
Dramatically demonstrates the wildly different business models of the OS
marketplace and the vigorous competition at every level (technical,
alliances, applications, channels and business model) that characterize the
industry.<P>
<FONT COLOR="green">{
Ah. Now, this is clever. Rule One of public relations: when life hands
you a lemon, make lemonade. Ms. van den Berg wishes us to focus on
the evidence of competition, drawing from it the conclusion that Microft is
not a monopoly and the mean old Department of Justice should leave it
alone.<P>
Observe the conjuring trick: while feeling a warm glow about Ms. van
den Berg's worthy competition in the abstract, we are distracted from
thinking about the sleazy and destructive tactics that the memo describes
for concretely competing.<P>
Ms. van den Berg is earning her salary.
}</FONT><P>
In addition, however, Linux is an alternative to/competitor for other
versions of UNIX, especially RISC UNIX - in fact this may be the more
powerful affect in the marketplace.<P>
<FONT COLOR="green">{
<em>Very</em> clever. She's completely changed the subject now; she's
not only gotten the reader to stop thinking about
``de-commoditization'', she's insinuated that Linux will actually
<em>assist</em> Microsoft's inevitable domination of the market.<P>
And this, barely a few breaths after she has lauded competition!<P>
This woman should write poetry.}</FONT><P>
Has an utterly different business, support, and investment model from the
comprehensive, integrated Microsoft model for Windows NT, which has
attracted millions of developers and tens of thousands of
applications.<P>
<FONT COLOR="green">{
Good. Good. Now we add the implication that, by comparison, Linux is
the eccentric preoccupation of a tiny tribe of malcontents living in
the software equivalent of tin shacks on a desert island.<P>
At all costs, the reader must be made to forget VinodV himself in
Halloween I: <FONT COLOR="red">``More importantly, OSS
evangelization scales with the size of the Internet much faster than
our own evangelization efforts appear to scale.''
</FONT>
}</FONT><P>
Linux is a philosophy as much as technical phenomena. On the positive, and
Microsoft is interested in better understanding and finding ways to
accommodate this dynamic, it provides for extensive peer review, and for a
lot of independent parallel work on a variety of features.<P>
<FONT COLOR="green">{
Subtext: We at Microsoft will co-opt just as much of this magic as we
can, providing it doesn't require us to lower prices, reduce profit
margins, or cede control of anything.
}</FONT><P>
The negatives are stark, however:<BR>
</P>
<P>
<UL>
<LI>no long term roadmap ... and no way to get one;<P>
<FONT COLOR="green">{
This, of course, is much much worse than being stuck with Bill Gates's
single ``The Road Ahead'', whether you like the scenery or not.
}</FONT><P>
</LI>
<LI>individuals are a non-scalable factor in the development at various control
points;</LI><P>
<FONT COLOR="green">{
Microsoft, on the other hand, <em>never</em> relies on
individuals. All their developers are mutually interchangeable cogs in
a perfect machine.<P>
(Note for the sarcasm-impaired: the above is an example of what
rhetoricians call ``reduction to absurdity''. Look it up.)
}</FONT><P>
<LI>no intellectual property protection means that the deep investments
needed by the industry in infrastructure will gravitate to other
business models.</LI><P>
<FONT COLOR="green">{
Pay no attention to the fact that open-source software is actually
gaining market share most rapidly (and faster than NT) exactly where
``deep investment in infrastructure'' is most critical, on the
Internet and in the Fortune 500.
}</FONT><P>
</UL>
</P>
<P>
Unless Linux violates IP rights, it will fail to deliver innovation over the
long run.
</P>
<FONT COLOR="green">{
This final remark is worthy of an essay all by itself. It is the least
logical -- and at the same time, most damning -- assertion in Ms. van
den Berg's entire statement.<P>
As propaganda, it has a superficial cleverness. It plants the idea
that any MIS manager so foolish as to use Linux will find his
operating system yanked out from under him by a future patent lawsuit --
perhaps one initiated by (whisper it) Microsoft itself. It's a perfect
FUD tactic.<P>
There are lots of pragmatic and legal reasons to believe this FUD is a
phantom. But to wander off into those would be to miss the key point
-- what it reveals about Microsoft's own assumptions.<P>
To see why this is true, try out the claim ``Unless SCO violates IP
rights, it will fail to deliver innovation over the long run.'' Or:
``Unless Solaris violates IP rights, it will fail to deliver
innovation over the long run.'' Or, best of all, ``Unless NT violates
IP rights, it will fail to deliver innovation over the long run.''.
Nobody has a natural monopoly on talent (and, as VinodV pointed out,
``<FONT COLOR="red">The ability of the OSS process to collect and
harness the collective IQ of thousands of individuals across the
Internet is simply amazing.</FONT>'') If these claims are not credible,
neither is hers.<P>
If we believe Ms. van den Berg means her claim, we must deduce that
Microsoft actually cannot imagine <em>anyone</em> inventing
innovations that don't violate existing IP rights. <P>
Perhaps this is understandable, giving Microsoft's own long record of
buying or outright stealing key technologies rather than innovating.
MS-DOS: bought (from Tim Paterson). PC1 BIOS code: stolen (almost
bit-for-bit from Gary Kildall's CP/M BIOS). On-the-fly disk
compression: stolen (from Stac Electronics). Internet Explorer:
bought or stolen, depending on who you believe (from Spyglass). And
the list only <em>starts</em> with these...<P>
Microsoft truly behaves as though it corporately believes that there's
only a fixed pool of key ideas, most already discovered, which
software designers must squabble over in zero-sum competition until
the end of time. In that game, the only definition of `winning' is
cornering enough goodies to guarantee you a monopoly lock.<P>
But this raises a question for everyone betting on a Microsoft future;
can people with beliefs like that ``deliver innovation'' themselves?
Or are they more likely to lag further and further behind a culture
like Linux's, which perpetually seeks unexplored territory,
believes in innovation -- and practices it with the exuberance that
made VinodV observe ``<FONT COLOR="red">the <I>feeling</I> was
exhilarating and addictive</FONT>''.<P>
The interpretation of Ms. van den Berg's parting shot kindest to
Microsoft, then, is that it is a lie intended to frighten the
gullible. If it is the true Microsoft line, it reveals an astonishing
poverty of creative energy there -- that for all their billions and
all their putative brilliance, they cannot truly imagine anyone
creating anything genuinely new. }</FONT>
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<h3 class="nav">Table of Contents</h3>
<p class="nav"><a href="index.html">Halloween Documents Home Page</a></p>
<p class="nav"><a href="halloween1.html">Halloween I</a>: <strong>Open Source Software&#150;A (New?) Development Methodology</strong></p>
<p><a href="halloween2.html">Halloween II</a>: <strong>Linux OS Competitive Analysis: The Next Java VM?</strong></p>
<p class="nav"><a href="halloween4.html">Halloween IV</a>: <strong>When Software Things Were Rotten</strong>: Vinod Vallopillil's boss calls us "Robin Hood and his merry band." We return the compliment.</p>
<p class="nav"><a href="halloween5.html">Halloween V</a>: <strong>The FUD Begins!</strong>: The Sheriff of Nottingham rides again. In this exciting episode, the things he doesn't say are more interesting than the things he does.</p>
<p class="nav"><a href="halloween6.html">Halloween VI</a>: <strong>The Fatal Anniversary</strong>: First Mindcraft, now the Gartner Group&#150;Microsoft leaves a trail of shattered credibility behind it.</p>
<p class="nav">Before emailing or phoning me with a question about these documents,
please read the <a href="faq.html"><strong>Halloween Documents Frequently-Asked Questions</strong></a>.</p>
<p class="nav"><a href="links.html">Links</a> to press coverage</p>
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<p class="nav"><a href="../index.html">opensource.org home page</a></p>
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