Microsoft: Delaying product, spewing FUD

Over three days recently, Microsoft delayed two major products and, perhaps to compensate, hinted that it just might join The SCO Group in trying to sue Linux out of existence.

On March 21 Microsoft announced that the consumer version of Windows Vista would be pushed back a few months to early 2007, from late 2006. Two days later CEO Steve Ballmer hinted to Forbes.com that Microsoft might sue someone over Linux violating Microsoft’s intellectual property. The next day Microsoft made sure that the consumer version of Office 2007 was not misnamed by also delaying it until early 2007.

Delaying new versions of software has become a Microsoft specialty, so these new delays should not be all that surprising or alarming. A number of pundits have gone into a minifrenzy speculating about the competitive impact of the delays on the efforts of Google, Yahoo and others to supplant Microsoft products in one area or another. Microsoft’s Windows management shake-up, announced the same day that the Forbes interview ran, has increased the volume of pundits’ twittering.

On the anti-Linux front, Ballmer did not actually say that Microsoft was priming its lawyers, but did hint strongly at that possibility. Forbes.com asked Ballmer, “You mention intellectual property. What’s going on in terms of Microsoft IP showing up in Linux? And what are you going to do about it?” Ballmer’s answer: “Well, I think there are experts who claim Linux violates our intellectual property. I’m not going to comment. But to the degree that’s the case, of course we owe it to our shareholders to have a strategy.”

This is not the first time that Microsoft has tried to sell its products by inducing FUD about intellectual-property rights. (See Quality of threats rather than quality of software) Still, it’s sad when a company with more market share than gravity and more money than King Midas ever dreamed of plots a corporate strategy based on attacking the competition with FUD rather than first-class products.

Maybe Ballmer felt that tossing a little FUD would keep customers from looking at alternatives during the latest product delay. Not all companies with a lot of intellectual-property rights resort to similar tactics, however. For example, see Cisco’s statement to the IETF concerning one of its patent applications. That statement says, in essence, if you do not sue us, we will not sue you, but even if you do sue, you can still license the technology for a fee.

This is not to say that all patents should be treated as Cisco did. If a company has spent billions of dollars innovating, it deserves to be able to profit from its investment, get money from others who use the patent or stop others from using the technology to compete – at least for a while. Not all patents fit this description: see, for example, U.S. patents 5,443,036 and 6,368,227.

Things may be changing on the patent front. In mid-March the U.S. Supreme Court heard an important case concerning what can be patented, and soon will hear another concerning when injunctions can be employed to stop others using a technology. In addition, Congress is pondering reforming the U.S. patent system. The combination of the courts and Congress just might make it harder for a Microsoft to sell with intellectual-property rights FUD. But don’t hold your breath waiting.

Disclaimer: I did not check to see if the Harvard Business School has a class in marketing with FUD (I do not want to know). So the above is my own opinion.