Microsoft's Protection Racket?

Microsoft should have admitted that Linux matters sooner. For years, the Redmond, Wash.-based software giant seemed to be in denial as the open-source operating software made gains against its Windows franchise. But now a series of deals is finally allowing Microsoft to argue that it's ahead of the curve--with the entertaining upside of making some of the open-source community's truest believers even angrier.

Microsoft (nasdaq: MSFT - news - people ) announced a pact with Linux software distributor Xandros Monday that will the offer tiny company's customers so-called "patent covenants," protecting them from the threat of litigation from Microsoft.

So do Linux users need protection? It's an open question. In 2004, software vendor The SCO Group (nasdaq: SCOX - news - people ) sued Linux user AutoZone (nyse: AZO - news - people ) for what it claims are violations of its intellectual property--a case that hasn't yet been resolved. Some now fear Microsoft could play that game after open-source software distributor Novell (nasdaq: NOVL - news - people ) struck a sales and marketing pact with Microsoft last year.

Linux advocates were angered because, as part of the deal, Microsoft agreed not to sue users of Novell's Linux distribution. And Microsoft executives are hinting that trouble could be brewing--claiming last month that open-source products are violating 235 of the company's patents.

Meanwhile, the folks behind open-source software are growing more upset as they see companies aligning themselves with Microsoft to give their customers a free pass against that possibility. "They know their standing in the community is going to take a hit," wrote one commentator on geek site Slasdot.org in response to the news. "So, how much was it worth to them?"

Aside from having to endure getting flamed on a few geek-friendly message boards, however, it's hard to see a downside for the 80-employee Xandros. The company gets to fine-tune its offerings to work more closely with Microsoft's ubiquitous software. And both firms get to make a case to customers that their wares will play well with others, said Michael Cherry, lead analyst, Windows and mobile, at Directions on Microsoft. Financial terms of the deal were not disclosed.

The real question: Which software developer will sign a deal with Microsoft next?
Source :http://www.forbes.com