Inside story: How Microsoft & Massachusetts played hardball over open standards

E-mails show that the vendor lobbied for hardball legislation over the file format controversy -- and then backed off.

Less than a week after he became CIO of Massachusetts last February, Louis Gutierrez sensed a serious threat to his power — one that was being promoted by a seemingly unlikely source. Within a matter of days, Gutierrez confirmed that Brian Burke, Microsoft Corp.’s government affairs director for the Northeast, had been backing an amendment to an economic stimulus bill that would largely strip the Massachusetts Information Technology Division of its decision-making authority.

Louis Gutierrez

Louis GutierrezFor Microsoft, the call to arms had sounded several months earlier, when the state’s IT division surprised the company with a controversial decision to adopt the Open Document Format for Office Applications, or ODF, as its standard file format. Even worse, from Microsoft’s perspective, the policy stipulated that new desktop applications acquired by state agencies feature built-in support for ODF, a standard developed and promoted by some of its rivals — most prominently, IBM and Sun Microsystems Inc.

The amendment Burke was promoting had the potential to stop the ODF policy dead in its tracks by giving a government task force and the secretary of state’s office approval rights on IT standards and procurement policies. Gutierrez, who resigned last month over a funding dispute that appeared to be unrelated to the ODF controversy, clearly was rankled by Burke’s involvement with the amendment. Yet he made no attempt to shut the door on Microsoft. On the contrary, he did the opposite.

“While Brian will never be welcome in my office, Microsoft, of course, will remain so,” Gutierrez wrote to Alan Yates, a general manager in the company’s information worker product management group, in an e-mail message that detailed what he had learned about Burke’s lobbying.

The message, sent on March 3, is one of more than 300 e-mails and attached documents obtained by Computerworld under the Massachusetts Public Records Law. The e-mails provide a behind-the-scenes look at some of the hardball tactics used, compromises considered and prickly negotiations that ensued as Gutierrez and Yates each tried to deal with the ramifications of the first-of-its-kind policy calling for state agencies to adopt ODF by Jan. 1, 2007.

The topic of document formats may have an arcane air to it, but it matters deeply to the world’s richest software company. Document formats have played a critical role in helping Microsoft to secure and maintain its dominance of the office-productivity applications market, with more than 400 million users of its Office software worldwide.

“It wasn’t the only reason that people standardized on Microsoft Office, but it was the main reason,” said Michael Silver, an analyst at Gartner Inc.

When Massachusetts committed to its ODF policy, migrating away from Office appeared to be the only way that executive-branch agencies could comply. Microsoft had spurned the state’s requests to engineer ODF support directly into Office, complaining in a 6,425-word document sent to the IT division in November 2005 that the open standard was “nascent and immature.”

The company argued that its new Office Open XML format also merited inclusion in Version 3.5 of the IT division’s Enterprise Technical Reference Model (ETRM), the newly minted open standards blueprint for state agencies. Microsoft even took the rare step of submitting Open XML to the ECMA International standards body in an attempt to show that its format would pass muster as “open.” But to Microsoft’s chagrin, Massachusetts issued only a noncommittal statement of optimism that Open XML would someday meet its standards.

Worldwide Impact

Microsoft’s concerns extended well beyond Massachusetts. Yates told Gutierrez in one e-mail that the state’s mandate carried “a lot of weight” with public policy makers around the world. And he repeatedly complained in his messages to the CIO that Microsoft’s rivals were misrepresenting the state as the “reference case for a mandatory ODF-only policy,” rather than stating its broader goal of embracing open standards in general.

“We think the common external view is that the current policy is etched in stone and [that] Microsoft products and technology are shut out of the Commonwealth unless we agree to neuter our products for awhile,” Yates wrote to Gutierrez in April.

The fact that the ODF policy threatened Microsoft’s business interests wasn’t lost on Eric Kriss, who had paved the way for its adoption while serving as a cabinet secretary under Massachusetts Gov. Mitt Romney. In an interview, Kriss said he wasn’t surprised by “the aggressiveness” that Microsoft showed both publicly and privately in pursuing its opposition to the ODF policy.

“I think Microsoft took a good run at trying to change the world as opposed to trying to change [itself],” Kriss said. “And you expect to get the shock and awe when that happens. That’s what we got.”

Kriss, who left his post as secretary of administration and finance shortly after Version 3.5 of the ETRM was issued in September 2005, instigated the open-standards policy based on the belief that public documents shouldn’t be tied to a single vendor’s proprietary document format.

He was no stranger to technology himself. Following a prior stint as the state’s finance secretary, Kriss became CEO of MediQual Systems Inc., a database developer with products based on Microsoft’s FoxPro software. He left MediQual in 1998 to start his own business, Workmode Inc., which uses open-source software to develop Web-based business applications. He makes no secret of his belief that governments eventually will move to open source.

Not Anti-Microsoft

But Kriss insisted that the ODF policy wasn’t intended to be anti-Microsoft. He said technical people at Microsoft told him it would be “trivial” to add support for ODF to the new Office 2007. The resistance to doing so came from the vendor’s business side, according to Kriss.

Yates told Computerworld in an interview last month that ODF “came up late in the development process for Office 2007” and that the standard “really isn’t finished.” He also said Microsoft was “surprised” when Massachusetts issued the ODF mandate and dropped what he claimed was an earlier agreement for the state to accept Office file formats as being open.

As part of his e-mail exchanges with Gutierrez, Yates didn’t deny Burke’s involvement in promoting the amendment sponsored by state Sen. Michael Morrissey that sought to take away much of the IT division’s decision-making authority.

“I am certain that Brian was involved,” Yates wrote to Gutierrez in response to the CIO’s March 3 message about Burke’s role in lobbying for the amendment. But Yates claimed that Burke’s intention was “to have a ‘vehicle’ in the legislature” to address a policy that Microsoft viewed as “unnecessarily exclusionary.” Burke’s aim was “not specifically to transfer agency authority,” Yates wrote.

He also asserted that the Morrissey amendment “was developed and is promoted by others who were/are very inflamed by your predecessors’ handling of many things.” The predecessors Yates referred to were Kriss and Peter Quinn, who was CIO before Gutierrez and had cited the Morrissey amendment as one of the contributing factors when he resigned last January.

During his interview with Computerworld, Yates was adamant that neither Microsoft nor anyone on its payroll had authored the amendment. In response to questions about the company’s lobbying activities, he said, “At the time, our public affairs people were — you can call it lobbying — but they were in fact trying to educate people to the real issues in the mandate for ODF. And we were, yes, arguing against it — absolutely.”

The situation started to change in late March and early April, however. A March 30 e-mail from Yates indicated that he had received a phone call from Gutierrez and that the CIO wasn’t happy. Yates wrote that he had spoken with Burke after Gutierrez called, “and ALL activity in and around the capitol building next week is now being canceled.”

By that time, discussions geared toward a compromise were in full swing between the two men. Gutierrez, who declined to comment for this story, was dogged in his quest for an Office software plug-in that could translate documents into and out of ODF. That would spare him the trouble of having to plot a potentially costly and time-consuming migration of tens of thousands of PCs to applications with built-in ODF support, such as IBM’s Workspace, Sun’s StarOffice and the open-source OpenOffice.org suite.

He also hoped the plug-in approach would satisfy advocates for the blind and visually impaired who had raised concerns that the most popular software products for reading and magnifying computer screens don’t work as well with ODF-supporting applications as they do with Office. Some advocates had threatened to file lawsuits based on federal antidiscrimination laws if the state moved to software that was inaccessible to people with disabilities.

Gutierrez first broached the subject of a “save-to-ODF” plug-in in a Feb. 17 e-mail to Yates. A subsequent message from Gutierrez on March 31 indicated that Microsoft had “committed” to Thomas Trimarco, Kriss’ successor as the state’s administration and finance secretary, that it would be willing to work with a third party to “technically cooperate, and possibly financially cooperate” on creating an ODF converter plug-in for Office.

In early April, Gutierrez signaled that he was willing to consider a memorandum of understanding that Microsoft had drafted. The company said it would publicly commit to financially supporting the development of third-party ODF conversion tools. In return, Massachusetts would announce that Open XML met its criteria to qualify as an open format and merited inclusion in future ETRM revisions, pending the technology’s sanction by an international standards body.

Microsoft went so far as to prepare a draft press release announcing the agreement. But Gutierrez wrote to Yates that he viewed “Draft 1” of the memorandum of understanding as “a bit of a slap.”

No ‘Chest Thumping’

At 9:27 p.m. Eastern Time on Friday, April 7, Gutierrez sent a message to Yates offering an “alternative formulation,” writing that he would “avoid any chest thumping or anything that smacks of nongracious support for a Microsoft ODF conversion commitment.”

Gutierrez added that, contingent on the delivery of a working ODF converter that was either inexpensive or free to government users, the state would “essentially say ‘this war is over’ and we look forward to long-term use of competitive office suites, including Microsoft Office.”

The discussions broke down, though. “I believe I’ve had enough,” Gutierrez wrote to Yates on April 8. “You all do what you need to do. We’ll do what we need to do.”

The next day, a Sunday, Gutierrez offered one last gasp at a compromise, repeating his previous offer “even as I begin to let go of hope for quiet, bilateral and pragmatic resolution of this matter.”

Yates responded on the evening of April 11. First, he told Gutierrez that Microsoft thought “a public announcement in the current environment probably was not a good step for either of us. It would just be too easy to ‘spin’ such an announcement in a negative way against us or you.”

Yates added that Microsoft would no longer pursue “legislative action” against the ODF policy because that approach had created “such friction” with the state’s IT division, Trimarco and Romney.

“We disagree with the governor’s mandatory ODF policy as much as ever,” Yates wrote, “but also respect your position and approach to the future; and will no longer argue our case for legislation — simply based on the constructive communication with you.”

In his interview with Computerworld, Yates said, “There was a time when we just stopped because we felt that at that point, the decision-makers in Massachusetts did understand the issues and were acting reasonably and rationally, and things would take care of themselves over time.”

An April 21 e-mail from Yates to Gutierrez said Microsoft’s “senior government leaders” were encouraged to hear that the CIO had given the go-ahead to distribute an internal memo about a new Enterprise Agreement the Massachusetts Operational Services Division had negotiated with Microsoft. The contract enables the state as well as municipalities to buy Microsoft products at discounted prices. Last year, a total of $5.8 million was spent under a previous deal.

“As always, please let me know if there is anything happening locally that causes you concern,” Yates wrote in closing to Gutierrez. “I assume that everyone on the ground in MA for MSFT is acting according to my directions as I communicated to you.”

Gutierrez told Yates in response that Microsoft’s promise to stop lobbying for the amendment aimed at the IT division had “already helped.” He wrote that if the Morrissey amendment or a version of it was approved, “my responses will be as immediate, sharp and unsparing as committed earlier. But that is a precaution that I trust is more formality than substance at this point.”

The Massachusetts legislature approved the economic stimulus bill in June without the amendment. In early July, Microsoft announced that it was sponsoring an open-source project to develop an Office plug-in for translating files between Open XML and ODF. And Gutierrez formally announced on Aug. 23 that the state at least initially would adopt a plug-in strategy to fulfill the ODF policy. By then, he had no need to rely solely on the fruits of the Microsoft-backed project. Plug-ins also had been submitted to the state for testing by Sun and the OpenDocument Foundation.

The tortuous process that played out in Massachusetts is starting to have an effect well beyond the state’s borders. For example, without the plug-in approach, Belgium’s national government wouldn’t be able to meet ODF adoption deadlines that are due to begin taking effect next September, said Peter Strickx, chief technology officer at the Belgian Federal Civil Service’s Information and Communication Technology Division in Brussels.

Like Massachusetts, Belgium is taking a wait-and-see approach toward Open XML. “The objective is interoperability,” Strickx said. But he added that the government doesn’t plan to migrate its entire user base away from Office. “That’s between 60,000 and 80,000 users,” he noted. “We’re in a very tight budgetary situation, so we cannot ask the IT managers to spend even more on something that in their opinion doesn’t bring any real business value.”

When Gutierrez announced his resignation as Massachusetts CIO in early October, he cited the legislature’s failure to pass a bond bill that included funding for key IT projects. Since the bill also would have funded non-IT projects, the stall didn’t appear to be directly tied to any remaining opposition to the ODF policy.

Ironically, on Nov. 2, Gutierrez’s last day as CIO, Microsoft announced an agreement with Novell Inc. that included a pledge to cooperate on development of translation software to improve the way ODF and Open XML work together.

What a difference nine months had made.

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