Thursday, October 28, 2004

INDEMNIFICATION - THE KICKER BETWEEN WINDOWS AND LINUX? Steve Ballmer from Microsoft has pumped out a four-page memo explaining why Windows is better than Linux. Ballmer argues that the rising prices companies such as IBM, Red Hat and Novell charge for technical services and support, along with costs associated with indemnification, now outstrip the financial advantages of free open source software. Ballmer explains:

Increasingly, we're hearing from customers that another factor in their consideration of computing platforms is indemnification. In 2003, we looked at our volume licensing contracts to see what we could do to increase customer satisfaction, and a top issue we heard about was patent indemnification, which then was capped at the amount the customer had paid for the software. So later that year, we lifted that cap for our volume licensing customers, who are most likely to be the target of an intellectual property lawsuit.

Today, when a volume licensing customer – a business or organization ranging from as few as five computers to many thousands – licenses a Microsoft product, we provide uncapped protection for legal costs associated with a patent, copyright, trademark or trade secret claim alleging infringement by a Microsoft product. We do this because we are proud to stand behind our products, and because we understand that being on the wrong end of a software patent lawsuit could cost a customer millions of dollars, and massively disrupt their business.

No vendor today stands behind Linux with full IP indemnification. In fact, it is rare for open source software to provide customers with any indemnification at all. We think Microsoft's indemnification already is one of the best offered by the leading players in the industry for volume licensing customers, and we're looking at ways to expand it to an even broader set of our customers. It's definitely something businesses want to think about as they're building or expanding their IT infrastructure. reports on the memo here.

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