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Delaying product, spewing FUD

By Scott Bradner

Over a span of three days Microsoft delayed two major products and, maybe to compensate, hinted that it just might join SCO in trying to sue Linux out of existence.

On March 21st Microsoft announced that the consumer version of Windows Vista would be pushed back a few months to early 2007 from late 2006. Two days later Steve Ballmer was quoted in Forbes hinting that Microsoft might sue someone over Linux violating Microsoft intellectual property. Then the next day Microsoft made sure that the consumer version of Office 2007 was not misnamed by also delaying it until early 2007.

Delaying new versions of software has become a Microsoft specialty so these new delays should not be all that surprising or alarming. A number of pundits have gone into a mini-frenzy speculating about the completive impact of the delay on the efforts of Google, Yahoo and others to supplant Microsoft products in one area or another. Microsoft's management shakeup, announced the same day as the Forbes interview was published, of the part of the company that produces Windows has just increased the volume of the pundits twittering.

Ballmer did not actually say that Microsoft was priming its lawyers but did hint rather strongly at that possibility. Forbes asked Ballmer "You mention intellectual property. What's going on in terms of Microsoft IP showing up in Linux? And what are you going to do about it?" (http://www.forbes.com/home/enterprisetech/2006/03/22/ballmer-microsoft-linux-cz_df_0322microsoft.html) His answer was "Well, I think there are experts who claim Linux violates our intellectual property. I'm not going to comment. But to the degree that's the case, of course we owe it to our shareholders to have a strategy."

This is not the first time that Microsoft has tried to sell its products by inducing fear, uncertainty and doubt (FUD) about intellectual property rights (IPR). (See "Quality of threats rather than quality of software" http://www.networkworld.com/columnists/2004/112904bradner.html) It is still sad when a company with more market share than gravity and more money than King Midas ever dreamed of plots a corporate strategy based on attacking the competition with FUD rather than first class products. But maybe Ballmer felt that tossing a little FUD would keep customers from looking at alternatives during the latest product delay.

Not all companies with a lot of IPR resort to similar tactics. See, for example, Cisco's IPR statement to the IETF concerning one of its patent applications (http://www.ietf.org/ietf/IPR/cisco-ipr-draft-ietf-tcpm-tcpsecure.txt). The statement says, in essence, if you do not sue us we will not sue you, but even if you do sue us you can still license the technology for money.

This is not to say that all patents should be treated as Cisco is doing in that specific case. If a company has spent billions of dollars doing actual innovation it deserves to be able to profit from that investment, get money from others who use the patent or stop others from using the technology to compete, at least for a while. Not all patents fit this description, see, for example, US patents 5,443,036 and 6,368,227. (add URLs for the patents)

Things may be changing on the patent front. The US Supreme Court heard one important patent case, concerning what can be patented, in mid March and will hear another one, concerning when injunctions can be used to stop others using a technology, soon. In addition the US Congress is pondering reforming the US patent system. The combination of the courts and Congress might just make it harder for a Microsoft to sell with IPR FUD, but then maybe not -- do not hold your breath.

disclaimer: I did not check to see if the Harvard Business School has a class in marketing with FUD (I did not want to know) so the above is my own opinion.