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Linux users to Microsoft: What 'balance sheet liability'?

'I took great offense to Ballmer's comments,' says one CIO

By Eric Lai
November 21, 2006 12:00 PM ET

Computerworld - While Microsoft Corp. may cast the Nov. 2 patent cooperation agreement it pushed on new partner Novell Inc. as a way to protect corporate users of the SUSE Linux operating system from potential lawsuits, CIOs today said they weren't worried in the first place.

"I do not believe that my company has an "undisclosed balance sheet liability," Russ Donnan, CIO at business information provider Kroll Factual Data, said in an e-mail response to questions from Computerworld about the Microsoft deal. Loveland, Colo.-based Kroll Factual Data, which provides credit reports and other business information services, currently uses both Windows and Red Hat Linux on servers in its data centers. Donnan plans to switch the Red Hat servers to Windows for ease of management, but said the shift has nothing to do with any concerns about legal issues involving Linux.

After keeping mum about Microsoft and Novell's tie-up, Microsoft CEO Steve Ballmer openly declared last week that he believes the Linux source code infringes upon Microsoft's intellectual property (IP). And companies that use Linux, apart from Novell's SUSE distribution, face a latent financial time bomb that he called an "undisclosed balance sheet liability."

Yesterday, the two companies released separate statements, with Microsoft softening but still standing by Ballmer's comments even as Novell's CEO Ron Hovsepian disavowed them.

Donnan, who described himself as "not a huge fan of software patents," said "the threat of such a 'liability' would not in any way influence" whether Kroll would stick with Red Hat or move to SUSE or even Windows. "Steve Ballmer is posturing for mind share to enterprise executives, knowing it will have little to no impact on IT executives," he said.

Barry Strasnick, CIO at North Quincy, Mass., financial services provider CitiStreet LLC, was even more emphatic.

"Like many IT executives, I took great offense to Ballmer's comments," Strasnick wrote in an e-mail. CitiStreet uses Red Hat Linux widely in its data centers. "If Microsoft really thinks there is some code in Linux that violates their patents, they should publish those lines of codes immediately instead of just posturing in the press. [Fear, uncertainty and doubt] may have worked for IBM in the 1970s (some of us are old enough to have been around then), but not today."

When Linux began gaining adoption by dot-coms in the late 1990s, many mainstream CIOs considered it risky in part because of their unfamiliarity with the open-source General Public License that governs the operating system's intellectual property, according to Gordon Haff, an analyst at Nashua, N.H.-based Illuminata Inc.

"It wasn't that any circa-1999 CIO had carefully studied the IP issues surrounding Linux; it was that they didn't know much about them and the whole thing sounded kind of fishy to them," he said.



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