Business & Technology
How to trip Microsoft
Create cool software. Give it away on the Internet
By Russ Mitchell
November 23, 1998
Bill Gates's nightmare goes like this: Someday, some way, some new competitor or new technology will leap out of the bushes and steal Microsoft's business away.
Well . . . boo! Something has jumped from the bushes–sooner, perhaps, than Gates ever imagined.
That something is called open-source software. And get this: It's free. Developed by dozens, hundreds, even thousands of devoted volunteers linked up on the Internet, open-source software is poised to unsettle software industry economics.
How so? These collaborative software projects are semipublic; their internal "source code" is open for anyone to look at, even modify. Companies that make a living selling software, by contrast, keep their source code secret. It's the core of any computer program, the well from which the software industry's outsized profit margins flow.
But no law says that all cool software must be created by profit-making companies or that source code must be kept under wraps. The open-source volunteers believe that their programming isn't just competitive with commercial software–they think it's better.
Their pride and joy is Linux (pronounced LINN-ucks), an operating-system alternative to Windows and the Unix systems used by businesses, universities, and other organizations. Considered by many information-systems managers to be more efficient, stable, reliable, and bug free than other operating systems–including Windows–Linux has begun nipping at Microsoft's business while threatening to become something much larger. "Personally," says David Sims, information-technology manager for Schlumberger, the giant oil field services company, "I think Linux is the future."
Linux is still a pipsqueak in Microsoft's world, but it's steadily gaining strength. More than 2 million commercial Linux packages will be sold this year, according to International Data Corp., and millions of additional copies have been downloaded from the Internet. Still, to put that in perspective, Microsoft has sold 150 million copies of Windows 95, Windows 98, and Windows NT.
So why are people writing software for free? The volunteers aren't a bunch of hobbyists. They're serious hackers, in the original sense of the word–highly skilled programmers with a creative bent.
Most of them have day jobs where they earn their pay developing software in the traditional way; many are university students. In their spare time, they hack open-source programs for enjoyment, for intellectual stimulation, for ego gratification, or to solve a particular software problem that commercial software can't handle. "They do it for love, and people who work for love make better things," says Kevin Kelly, author of New Rules for the New Economy and a longtime student of hacker culture. Of course, a rabid strain of anti-Microsoft sentiment motivates many of the hackers, too.
Profit motive. Users can download all the Linux software they want free off the Internet. But outfits like Red Hat, Caldera, Slackware, SuSE, and others have sprung up to put Linux on a CD, add some applications programs and an instruction manual, package it in shrink wrap, and sell the whole thing for about $50. These companies plan to earn their profits from support, training, enhanced software, and special services. Last month, Intel, Netscape, and two big venture-capital firms took minority stakes in Research Triangle Park, N.C.-based Red Hat (so named because cofounder Marc Ewing is still mad at whoever stole his grandfather's red lacrosse cap).
Another boost came earlier this year when database makers Informix, Oracle, Sybase, and IBM announced that their latest products will run on Linux. That convinced Jay Jacobs, the Seattle fashion retailer, to choose a Linux system linking headquarters with 105 stores over a system based on Microsoft's Windows NT. Jacobs's computer systems vendor, Apropos Retail Management Systems, offers NT. But, says Apropos President Kent McNall, "NT is not a reliable solution right now, and Linux is."
Meantime, major businesses such as Boeing, Mercedes-Benz, and Sony have been installing Linux systems. To date, most have been pilot projects, but big companies like Cisco Systems are beginning to move Linux into core operations. One big reason: Microsoft is woefully late with its industrial-strength Windows NT 5.0 operating system, recently renamed Windows 2000. No ship date has been announced by Microsoft.
Microsoft is worried. In a pair of leaked documents posted on the Internet, a Microsoft engineer warns top company executives of a "direct" threat posed by Linux in particular and the open-source movement in general.
And, in language that won't help Microsoft's image, he suggests fighting the open-source movement by using Microsoft-only coding against Linux to "deny [open-source] projects entry into the market." The suggestion has put Internet standards-setting groups on alert and has caught the attention of Department of Justice lawyers and the state attorneys general now prosecuting Microsoft on antitrust charges. Ed Muth, enterprise group marketing manager for Microsoft, says the memos are one engineer's analysis meant to provoke discussion and "not a position or a road map" on open-source software.
Linux got its start almost eight years ago in a most unlikely place: Helsinki, Finland. There, the now legendary Linus Torvalds was a university student, ticked off because he couldn't afford the high prices demanded by makers of Unix, the preferred operating system of the technical elite. So he began to write his own version, posting his work in progress on the Internet. He quickly attracted an international community of codevelopers that has steadily grown in size, fame, and prestige.
Many hard-core computer enthusiasts were hungry for a new operating system. Many of them sneered at Microsoft's products, including Torvalds, who believes that "Microsoft has been really bad at making operating systems. Windows NT is only the latest in a long line of technical failures." The alternative to Windows was Unix, highly regarded but problematic. Not only were Unix systems expensive but the operating system itself had splintered into several not-quite-compatible versions, made by the likes of Sun Microsystems, IBM, and Hewlett-Packard.
Thing of beauty. All those companies tailored Unix to their own high-priced desktop workstations; by contrast, Torvalds and his Internet buddies set out to create a new Unix for Intel-based PCs and named it Linux after the project leader. Because it cost nothing and ran on cheaper hardware, Linux would be affordable. But to work well on a PC, Linux had to be tight and efficient–or, as a skilled hacker might put it, aesthetically appealing, even beautiful.
That's where the power of open-source collaboration comes in. Unencumbered by commercial concerns, the Linux community focuses on writing the best code possible. Unrestricted by the limitations of in-house programmers, Linux draws from the highest IQs on the Internet, who compete in a friendly way to have their ideas incorporated into the product. The requirements for operating systems are almost purely objective. So the best alternative usually is obvious and is incorporated by consensus–although Torvalds has final say, which helps preserve a single Linux standard.
As a result, Linux is widely admired for its technical proficiency. It is considered highly reliable, not prone to screen lockups or system crashes. Some users say they've gone two years or more without an operating-system crash, a record Microsoft can't touch. Gary Nichols, network administrator for data broadcaster WaveTop, says since turning to Linux, "I no longer dream in blue screens," referring to Microsoft's post-crash error warning known to systems managers as "the blue screen of death." Linux fans also say it's speedier than the competition and so efficient that it runs fast on old hardware, even pre-Pentium 486 machines.
For many buyers, the open-source nature of Linux means it's easier to fix bugs and get help with other problems. And, while big companies argue that customers want the comfort of their support personnel, Linux support is available immediately over the Internet. This year InfoWorld magazine gave its award for best technical support to Linux.
Not for novices. Despite all the kudos, Linux is not entirely without problems. Customers are acquiring it mainly to run on servers, computers that manage network traffic and "serve up" applications to desktop machines. But Linux is unlikely to cut into Microsoft's Windows desktop market anytime soon. It won't run popular Microsoft software, like Word, Excel, and PowerPoint; its interface is a poor substitute for Windows; and Linux currently is too difficult for computer novices to use, which rules out most of the general office and home desktop market.
And then there's the weirdness factor. Even if their tech people love it, many top executives can't quite grasp the idea of tying their corporate data systems to something developed free on the Internet. If something goes wrong, whom do they sue? Companies like Red Hat are hoping to change that image, offering customers the stability of a real company to deal with–if not to sue.
Meantime, Torvalds has moved to Silicon Valley and is working at supersecret Transmeta Corp., which is financed by billionaire Paul Allen, cofounder of Microsoft. Torvalds says he's spending about half his time on Linux, overseeing not only further development of the core operating system but a new project trying to adapt Linux for smaller devices like hand-held computers.
But don't talk to him about whether top executives will embrace Linux or not. He's interested in pure technology, and he really doesn't care: "If some company decides they won't use Linux because of some distrust, I say that's your loss. It's not my problem, right?"
Kevin Horan for U.S. News
THEY SEE RED. The folks at Red Hat make their money from free software.
A peek behind Microsoft's mask
The fact that Microsoft executives ordered up internal reports on the open-source software phenomenon shouldn't surprise anybody. Companies research competitive products and companies all the time. They'd be dumb not to.
Devising strategies to beat the competition is part of the game, too. But what's intriguing about the reports, which were recently leaked, is the tactics they suggest: not just competing but using software tricks to lock open-source products out of the market.
The reports were dubbed the Halloween documents because of the date they were posted on the Internet by hacker activist Eric Raymond. In one of them, Microsoft engineer Vinod Valloppillil recommends that the company "deny [open-source] projects entry into the market." He proposes to do this by extending existing "protocols" and adding new ones that would favor Microsoft products over open-source alternatives like the Linux operating system.
Simply put, protocols are the rules by which different kinds of software communicate over a network. The Internet is based on "standard" protocols that allow software from different companies to use the network without favoring one over the other. The Internet couldn't operate without them.
No bite. The Halloween documents make standard-setting organizations wary. Chris Newman, a member of the Internet Engineering Task Force, which governs Internet protocols, says: "The IETF will have to be a little more strict so it is harder to abuse the standards." The organization's ability to do so may be limited, however, according to IETF veteran Einar Stefferud. "The IETF has no enforcement rules," he says.
Microsoft, in its defense, says that companies write nonstandard protocols all the time to make their products work better. "There are whole classes of problems that can't be met by com mod i tized protocols," says Ed Muth, the company's enterprise marketing manager. That's true. But what about writing those protocols to "deny" a competitor market access? "I don't want to defend the individual choice of words of one engineer," Muth says.
Still, the documents were sent to some of Microsoft's top executives. And the comments seem to fit the pattern that the Department of Justice is trying to prove in its ongoing antitrust case against the company. The trial has been loaded with testimony alleging that Microsoft has tried to bully competitors out of certain markets. An executive from Intel last week recounted what he called a "fairly terrifying" threat that Microsoft would withdraw support for Intel's next microprocessor if the company didn't withdraw from the market a piece of multimedia software that competed with a Microsoft product. Microsoft accused the executive of personal bias.
Whether the Halloween documents are relevant to the trial or not, they represent another blow to the company's image.–R.M.