[relatively frightful intro sounds & music]
Being season appropriate, it seems the right time to discuss another frightful Microsoft
tale, one that relates very much to fiendish goings on, and that’s mainly because the
Halloween Documents, as they are known, are a series of confidential documents leaked
from Microsoft about the threats perceived from external companies and significantly,
open source software.
-SQUARESPACE, thank you for sponsoring this content-
In their entirety, they’re an incredibly interesting, and somewhat damming insight
into Microsoft’s thinking as they moved into the new millennium.
“A million pounds of fireworks then”
The reason they’re known as the Halloween documents is simply because they were mostly
leaked around this spooky season, across multiple years.
Beginning with “Open Source Software: A New Development Methodology”, written by
Microsoft software engineer, Vinod Valloppillil, and sent in August 1998. In October, this
original document was leaked to the American software developer, and open source advocate,
Eric S. Raymond (who would later coin the Halloween Monika). It was he, who in turn
would expose the document to the press who covered it with varying degrees of accuracy
and completeness in early November, with the New York Times commenting that;
“The memo warns that free software can meet or exceed the quality of commercial programs
and describes it as a potentially serious threat to Microsoft”
Which is by and large, the gist of things, and Microsoft even acknowledged to the New
York Times that the document was indeed authentic, in their November 3rd article about it.
This led some to speculate that the document was leaked intentionally in line with Microsoft’s
FUD practises;
FUD: What is FUD?
It stands for Fear, Uncertainty, Doubt. It’s a methodology Microsoft subscribed to to undermine
products launched by competitors, posing a threat. If the rival product is better in
some fashion and so facts cannot win the day, scare-mongering is instead employed to cast
a show of doubt in consumers minds. I’ve previously discussed how Microsoft used this
against DR-DOS and Stacker Disk Compression. This, then, could just be a carefully worded
script designed to make the public think less of Open Source offerings.
However, the fact that this document is so honest towards Microsoft’s outlook and actually
discusses FUD and other internal strategies, suggests that it is in fact, an authentic
leak, and the reason Microsoft confirmed its authenticity was likely to avoid further conflict
whilst the US Department of Justice were pursuing an antitrust action against them.
On his website, catb.org, Eric, has compiled a list of key quotes from the document which
illuminate this;
“OSS (Open Source Software) poses a direct, short-term revenue and platform threat to
Microsoft, particularly in server space. Additionally, the intrinsic parallelism and free idea exchange
in OSS has benefits that are not replicable with our current licensing model and therefore
present a long term developer mindshare threat”
“Recent case studies provide very dramatic evidence, that commercial quality can be achieved
/ exceeded by OSS projects”
“OSS is long term credible. FUD tactics cannot be used to combat it”
“Linux and other OSS advocates are making a progressively more credible argument that
OSS software is at least as robust — if not more — than commercial alternatives.”
“Linux has been deployed in mission critical, commercial environments with an excellent
pool of public testimonials”
“Linux can win as long as services / protocols are commodities”
Rather than planning a seed of concern in the minds of the public, this document actively
praises Open Source Software, and it’s very clear that Microsoft had deep, deep concerns
about it, particularly around the rival operating system, Linux.
But that last quote, well that’s quite concerning. It’s also mentioned elsewhere in the document;
The “de-commodisation of protocols”. For core software to be successful, it’s usually
dependant on external standardised components. For example, you might take the .doc file
format used by Word. Open Source word processors would also need to use this file format, otherwise
the masses would simply stick with Word; the only program that can read their documents.
Microsoft were therefore talking about the possibility of making it impossible or at
least difficult for other parties to make use of formats like this, and even more fundamental
commodities such as the TCP/IP communication protocols. If they changed how Windows worked
with files or the outside world whilst they had the common advantage, it could spell doom
for competition.
Of course, this had its own risk. Ironically, this was partly the downfall of Linux’s
predecessor, Unix, as various Unix vendors tried to give their versions a proprietary
edge over others, therefore de-commoditising them, creating features that didn’t exist
on other Unices, and therefore causing incompatibilities between systems. This erased the standardisation
essential for interoperability.
The document itself was clearly penned for high level management within Microsoft to
consume, including Bill Gates himself.
——
The second Halloween document was leaked on the 3rd November 1998, Eric write, as perhaps,
a direct result of the national press coverage. It’s a direct follow up of the first document,
but with a heavy focus on Linux, and an evaluation of its credibility against Windows.
Dated August 11th 1998, and penned by Vinod Valloppillil and Josh Cohen, the document
begins with a synopsis and history of Linux itself, before delving into more detail about
its inner workings and distributions. The swelling numbers on the Linux user base succinctly
communicates why exactly, Microsoft was so concerned about their business.
“Linux represents a best-of breed UNIX, that… has long term credibility which exceeds
many other competitive OS’s”
“Most of the primary apps that people require when they move to Linux are already available
for free”
“An advanced Win32 GUI user would have a short learning cycle to become productive”
“Consumers LOVE IT”
This is very much a document that is selling Linux to its reader, rather than trying to
demolish it, and it seems clear that Microsoft had no real strategy for dealing with this
monumental threat to their business. At the time, other businesses, such as Corel, were
jumping on the wagon of actually shipping their own flavour of Linux as a commercial
package. This was not only making it more accessible to the average user, who preferred
buying their product from shop shelves, but it was also demonstrating how powerful Linux
was becoming.
At one point, the document states “Compaq and Dell merely have to credibly threaten
Linux adoption in order to push for lower OEM OS pricing”, demonstrating the issues
that Linux was already causing for Windows profits.
Of course, for some, reading these leaked stories, and documents, this may have actually
been the first time they had heard of Linux, and so Microsoft would need to respond to
the leak.
That response has been named, the Halloween Document III.
———
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———
After their initial confirmation of its authenticity, Microsoft tried to largely downplay the contents
of Halloween I and II, however the prominent Linux user Henk Kloepping did manage to get
a statement from Microsoft’s Public Relations Manager in the Netherlands.
Aurelia van den Berg was quoted the following;
“It’s routine and appropriate for Microsoft to research and write about all competitors,
both from a business model point of view and a technical point of view”
“It is not an official position by Microsoft on Linux. It is a technical analysis written
by an engineer in a staff capacity, and designed to encourage discussion”.
But Aurelia did try and put down the position of Linux, stating that it had;
“No long term road-map… and no way to get one”
“No intellectual property protection means that the deep investments needed by the industry
in infrastructure will gravitate to other business models”
And “Unless Linux violates IP rights, it will
fail to deliver innovation over the long run”
In hindsight, we can perhaps scoff at these remarks, as Linux has continued to move to
strength to strength, and offered many innovations over Windows which the Linux community will
swear by.
It later became apparent, that, this was in fact an official set of statements filtered
down from Microsoft HQ, distributed to local offices. The responses were listed under the
Windows NT Server section of their website, indicating that Microsoft were both keen to
undo any damage to prominent users, whilst trying to remain as discreet about it as possible.
However it does back up that the original documents, were indeed, leaked without a plan,
and that Microsoft were deeply, deeply troubled by the notion of a free and credible operating
system.
——
Halloween documents IV to VI are writings and response by Eric S. Raymond himself, regarding
the chatter and noise of the whole debacle. But Halloween VII was presented at a Microsoft
internal Linux Strategic Review, at the Berlin Microsoft offices in September 2002.
The main core of the document is Microsoft’s own marketing research, which heavily indicates
Microsoft’s FUD tactics were indeed failing, as had been suggested that they would, back
in Halloween I.
Microsoft’s research polled developers, IT and non-IT Business Development Managers
and indicated; 77% were familiar with Linux, with 86% of
those finding Linux favourable over Windows. 40% indicated that the low Total Cost of Ownership
was a strong factor, although 33% said that the fact is was an alternative to Microsoft
was strong enough alone.
——
Off the back off this, a memo from Microsoft sent on 25th November 2002 from Orlando Ayala
to general managers Microsoft regional subsidiaries, would become known as Halloween VIII.
Halloween VIII warns its recipients to expect a lot more Open Source Software adoption announcements,
and requests an increase effort on marketing to try and squash the growing threat.
——
Which really leads us onto Halloween X. The point at which matters really escalate.
Here we have an email from Mike Anderer to Chris Sontag. Now Chris Sontag was the Vice-President
and general manager of SCOsource, responsible for “overseeing the development and licensing
of SCO’s intellectual property holdings”.
So, who are SCO. Well SCO Group began in 2002, after a renaming of Caldera International.
A company that sold an easy to use implementation of Linux, much like the Corel package I mentioned
earlier. In August 2000, Caldera purchased Unix technology from the Santa Cruz Operation,
and so under SCO were looking to present a unified (*ahem* profitable) view of Unix and
Linux that could satisfy high-end business requirements. Read into that what you will.
This ultimately meant that SCO would enter into various legal disputes with various Linux
vendors and users, particularly around the reported source code that was donated by IBM
into Linux. But the key question here, is where did they get the funding for all these
actions to try and thwart Linux’s Open Source majesty?
Well, on 4th March 2004, this leaked internal email (Halloween X), detailed how Microsoft
had raised up to $106 million dollars to kindly help SCO out in that regard. This cash injection
was via. a deal with the venture-capital firm, Baystar, which to those with a synical nature,
might think of as I don’t know, some kind of laundering/distancing process.
The memo reveals that “Microsoft will have brought in $86million for us, including Baystar.
The next deal we should be able to get from $16-20”.
At the time, SCO’s cash reserves were $68.5 million, suggesting that SCO would have been
in debt, if it not for Microsoft’s intervention.
It seems then that Microsoft had outsourced their anti-Linux strategies, and were desperately
trying to turn something Open Source into something of a grey area, and indeed, allow
SCO to monopolise on it.
But, it was not to be.
———
Despite their cash injections, SCO Group would file for bankruptcy in September 2007. In
2011, UnXis would purchase their software product business, but the ongoing legal case
between SCO and IBM due to alleged violations of IBM’s Unix licences, would mean, the
shell of SCO would continue to limp on.
On 30th March 2010, in the separate case of SCO vs. Novell, it was decided that Novell
actually owned most of the disputed copyrights. This meant the scope of the case against IBM
narrowed, and in October 2017 was dismissed with prejudice. But an appeal by SCO means
that this zombie of a case, still lingers.
However, Linux also lingers. In fact, it does more than linger, it surges through. And so,
despite the best efforts of Microsoft and their hired proxies, it remains an even more
painful thorn in their side today. Especially being that it’s currently runs on the vast
majority of web severs and indeed on a high percentage of personal hardware.
Maybe Microsoft should have just given out a treat, let them on their way, and concentrated
on improvements, rather than opting for a trick, which perhaps did more harm than good.
But hey, Microsoft and Windows are still here as well. So, all’s well that ends well.
This, then is where the Halloween Documents, and indeed, this tale ends. But I suggest
you go and take a look at Eric’s site, catb.org and take a look at yet another insightful
part of Microsoft’s dark history.
In any case, thanks for watching, and have a HORRIFYING evening.
Y’know, because it’s halloween. I don’t actually want you to have a bad evening.
See ya.