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Microsoft is making money, even with Linux

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Apr. 29, 2010

Microsoft is a real machine to print money. The software giant has managed to install its Windows operating system on 9 out of 10 computers and notebooks sold on this planet.

This accounts for more than US $50 Billion a year in global sales. It's no secret that Microsoft has never liked to work with the Linux community, trying to figure out a way to make money on an open source operating system that powers about 71 percent of all Web and e-mail servers in the world.

Yesterday, the software giant announced a patent agreement with smartphone maker HTC that provides broad coverage under Microsoft's patent portfolio for HTC devices running Google's open source operating system, Android. Weird huh? But wait, it even gets better...

The way the deal is structured, Microsoft actually stands to make a profit from Linux! Wireless handset and mobile device maker HTC will pay Microsoft royalties for each phone it ships with Google's renegade operating system. Now if that isn't a touch or marketing genius, we don't know what is!

And HTC is just the latest dab under Microsoft's belt: Amazon, Novell, Linspire, TurboLinux and even Xandros have all signed similar deals with Microsoft in the past few weeks to actually protect themselves and their users against potential litigation over possible violations of Microsoft's patents by... well Linux!

As with HTC, no patents were named for now. Satellite navigation maker TomTom, which uses the Linux OS in its devices, was taken to court by Microsoft in March of last year over violations of no less than 8 patents in its implementation of the Linux kernel.

The two companies have since settled out of court, with TomTom promising to remove the offending functionality within two years along with some other, undisclosed, financial terms. But the fact remains: some Linux companies are now in bed with Microsoft, and for better or worse as they say...

Make no mistake: wireless and mobile devices is big business these days. Samsung, Nokia, Palm and Panasonic are all participants in this big market, as is HTC. Consumer electronics manufacturers also are big targets as well. They are now using Linux for use on cameras, music players, DVD players, TVs, Blu-ray devices, set-top-boxes, refrigerators, stoves, microwaves, etc.

For the past three years, Microsoft has even claimed more than 235 of its patents were violated by Linux, but the company has never come out and said what those patents are. Instead, Microsoft's strategy now is to carefully examine company after company that's implementing Linux in whatever product they are making.

Of course the approach directly benefits Microsoft, since it plays to the overall goal of monetizing its wide portfolio of software patents. IBM is doing a bit of the same, by the way, albeit to a lesser extent.

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Microsoft's corporate vice president and deputy general of intellectual property and licensing, Horacio Gutierrez, recently issued an open declaration pointing to the friendly nature of this new agreement with HTC. The deal is an example of how industry leaders can reach commercial arrangements that address intellectual property," Gutierrez said.

But an open declaration would mean that potential violations could be removed or that the claims could be exposed somewhat. The failure to disclose the patents might benefit Microsoft in one sense, but the constant flow of new patent covenants will only serve to rile open sourcers and constantly eclipse any attempts by Microsoft to work with the Linux community, nevertheless.

And to make its point very clear, Linux Foundation executive director Jim Zemlin said yesterday "Microsoft is once again demonstrating that it will attempt to use software patents to futher increase the current level of confusion and about the viability of any competitive platform in order to maintain its Windows monopoly across the globe."

Since 2007, Zemlin has actually been sort of "business-like" with Microsoft. He actually hosted Microsoft executives at the company's annual Linux Foundation Summit in San Francisco and stood up for the company when it was pilloried for donating thousands of lines of Linux driver code to the community because it had violated the GPL.

Indeed, these are times of rapidly shifting sands across the whole IT segment, and now some in the Linux community are watching Microsoft like a hawk.

In the coming months, it will be interesting to see what methods the software juggernaut is prepared to take in continuing its stronghold in the computer and server industry, and how it intends to do that in order to make more money, actually using the Linux community as an accessory.

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Source: LCNI.

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