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News > Technology
MSFT slams 'open source'
May 3, 2001: 3:32 p.m. ET

Software company executive sees source-sharing model as risky
By Staff Writer Richard Richtmyer
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NEW YORK (CNNfn) - A key executive of Microsoft Corp. warned Thursday that the "open source" software movement threatens to undermine the viability of the commercial software segment and suggested that companies embracing the concept could suffer the same fate as the scores of dot.coms that have evaporated over the past year.

"The Internet ... was full of sites producing content for free, in the hope that somehow they'd generate revenue from sources that never materialized, whether it was advertising, subscriptions, or a wing and a prayer," Craig Mundie, Microsoft's senior vice president of advanced strategies, said in a speech at New York University's Stern School of Business.

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Microsoft's Craig Mundie says the 'open-source' software model poses a risk to commercial software makers. (Courtesy/Microsoft)
"As we've learned or really re-learned one can't build a business or our economic future on that type of flimsy foundation," Mundie said.

In software, the term "open source" refers to the underlying code that makes it work. Most open-source software, such as the Linux operating system, is distributed under a General Public License, or GPL. That means developers are free to view and modify the source code, and even sell the resulting product, as long as they share all their modifications with the rest of the open-source community.

That's a drastically different model than the one employed by proprietary operating system and software vendors such as Microsoft, which dominates the market with its various versions of "Windows."

Some version of Windows is installed on the vast majority of the world's desktop computers. But Linux has been making headway, especially in the market for network servers.

Technology research firm International Data Corp. recently said Linux, which originally had a cult following of technically sophisticated users, was installed on 27 percent of the world's network servers, while Microsoft's Windows was on 41 percent.

What's more, the IDC report showed Linux is growing at a rate of 24 percent to Microsoft's 20 percent, thanks in part to heavyweight computing companies such as IBM and Compaq, which recently have thrown their weight behind it.

Several start-up tech firms specializing in Linux and open-source have emerged in recent years as well, such as VA Linux Systems and Red Hat. Although the Linux operating system can be obtained at no cost, companies have increasingly been opting to pay companies such as these for the Linux products as well as the attendant support and services they offer with them.

Supporters of the open-source model argue that information technology managers not only reduce the cost of acquiring the software, but they also have the flexibility to customize it for their specific operations. Being able to modify the source code also enhances systems engineers' ability to integrate disparate computing platforms within a corporate enterprise, Linux advocates say.

Defending the 'Shared Source' model

For its part, Microsoft has taken what it calls a "Shared Source" approach, providing developers with only those parts of its source code that they need in order to make their software products work with Windows and Microsoft applications.

During his speech, Mundie defended that practice. But he also acknowledged some of the benefits of the open-source concept, such as the fostering of community, improving feedback and working the bugs out of new software products.

"We are always looking for ways to improve our products and make our customers more successful, and to that end we have incorporated these positive [open-source] elements in Shared Source," he said.

At the same time, Mundie warned that there could be dire consequences to the open-source model, specifically the requirement under the GPL that developers fully disclose all of their source code.

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"This viral aspect of the GPL poses a threat to the intellectual property of any organization making use of it," he said. "It also fundamentally undermines the independent commercial software sector because it effectively makes it impossible to distribute software on a basis where recipients pay for the product rather than just the cost of distribution."

In that sense, Mundie said, the open-source software model mirrors the dot.com business models that proved the least successful during the past year.

"They ask software developers to give away for free the very thing they create that is of greatest value in the hope that somehow they'll make money selling something else. In effect, it puts at risk the continued vitality of the independent software sector," he said.

He also argued that the open-source development model leads to a strong possibility of "unhealthy forking" of a code base, which could result in compatibility issues across multiple versions of the same program, less interoperability and product instability. Further, Mundie argued that putting the source code of all programs out for all to see poses inherent security risks.

Those arguments echoed the same kinds of criticisms advocates of alternative operating systems frequently voice about Microsoft's products, which they say have a range of compatibility issues, are unstable and lacking in adequate security.

Shares of Microsoft (MSFT: down $1.23 to $68.53, Research, Estimates) were trading more than 2 percent lower on Nasdaq amid a broad downturn in the technology sector late Thursday. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.