Microsoft To Open Some Server Source CodeMicrosoft To Open Some Server Source Code

Microsoft will license source code for the Windows Server technologies at issue in the antitrust fight with the European Union to "put technical compliance issues at rest," the company's head counsel said Wednesday.

"We are putting our most valuable intellectual property on the table so we can put technical compliance issues to rest and move forward with a serious discussion about the substance of this case," said Brad Smith, Microsoft's general counsel, in a statement from Brussels.

Microsoft's move is in reaction to a December 2004 filing by the European Commission (EC) charging that the Redmond, Wash.-based developer had failed to properly document the inner workings of Windows Server for rivals so that they could create server applications that worked as well as Microsoft's own.

In December, the EC, which oversees the 2004 antitrust ruling, told Microsoft it would begin levying a 2 million euro ($2.45 million) per day fine if the company didn't better document selected Windows Server communication protocols. Tuesday, Microsoft was given an extension until Feb. 15 to answer those charges.

Wednesday, however, the company switched strategies.

"We have now come to the conclusion that the only way to be certain of satisfying the Commission's demands is to go beyond the 2004 Decision and offer a license to the source code of the Windows server operating system," said Smith. "The Windows source code is the ultimate documentation."

Not so fast, said Matt Rosoff, an analyst with Directions On Microsoft, a Kirkland, Wash.-based research firm. "Source code is typically cryptic and dense, but unless you know what you're doing, it's seldom useful for duplicating functionality. It's most useful for debugging."

Microsoft didn't spell out exactly which portions of the Windows Server source code it would license, nor detail the licensing terms. "It will be similar to the licensing programs in the U.S.," said Tom Brookes, a Microsoft spokesman based in Belgium. How similar, Brookes couldn't say.

The software company is already licensing protocols, and some source code, for its desktop operating systems because of the 2002 U.S. antitrust settlement, but federal and state officials have repeatedly taken Microsoft to the woodhouse, most recently Tuesday when the Department of Justice blasted the company for its slow pace in providing documentation. In the press release Microsoft issued Wednesday, however, the company mentioned "reference license," the term given to the most restrictive licensing program currently offered.

"That's the license that lets companies look at the source code, but not change it or redistribute it," said Rosoff. And with the Europeans' fondness for open-source, that kind of license would make sense, he added.

"Microsoft wanted to settle [with the EU] all along, but there were two things it couldn't take. One, it doesn't want a government telling it how to design its most important products, and two, it doesn't want its source code to be covered by the GPL.

"Once you give up the source code, it's a slippery slope. It's out there, and you can't get it back."

While Sun and Novell were formerly part of the EU's antitrust case -- and according to Rosoff, prime movers behind the call to open up Windows Server protocols -- both have since settled separately with Microsoft. That leaves one major player chomping on the bit for source code.

"Open-source would love to get its hands on the Microsoft [Server] source code," Rosoff said.

Among the protocols that Microsoft will probably license source code for, added Rosoff, will be the proprietary way that Windows Server authenticates Windows clients.

"Microsoft had to do something," concluded Rosoff. "It had to make a good faith effort to stay on the EU's good side, as much as it could."

Microsoft's Brad Smith said much the same thing Wednesday. "While we are confident that we are presently in full compliance we wish to dispel any notion that Microsoft's technical documents are insufficient."

In related news, Microsoft's appeal against the EU's 2004 antitrust decision has been scheduled for April, according to an announcement by the Court of First Instance (CFI) in Luxembourg.

The appeal will be heard April 24-28, said the court, which will use a special, expanded Grand Chamber of 13 judges, including the CFI's president, Bo Vesterdorf.

This appeal is the next step in Microsoft's eight-year battle with the EU over allegations of unfair business practices, which led, among other things, to a record fine of 497 million euros ($610 million). A final decision on the appeal may take years.