Linked by Thom Holwerda on Thu 11th Oct 2007 21:38 UTC, submitted by Rahul
Red Hat Red Hat is taking a business-as-usual stance in the face of renewed rumblings from Microsoft's Steve Ballmer over the need for Red Hat Linux users to pay up. Ballmer has repeatedly claimed that Microsoft IP is found in Linux. "People who use Red Hat, at least with respect to our intellectual property, in a sense have an obligation to eventually compensate us," said Ballmer at a Microsoft event last week in London. But Red Hat itself has adopted a stance that keeps it above the Microsoft patent fray. "At this point, please reference our previous statements on this topic," said a Red Hat spokesman contacted Tuesday about Microsoft's statements on Red Hat Linux users. The spokesman pointed out a Red Hat blog posted "after the last FUD statements from Microsoft" in May, she said. Shuttleworth agrees.
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by SReilly on Thu 11th Oct 2007 21:57 UTC
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What a great couple of articles. RedHat, instead of buckling to pressure and lashing out in turn, simply stated that they don't wont to lower themselves to MS' level and refuse to say anything new on the matter.

Shuttleworth has an interesting spin on matters too. Just check out this quote:

"Microsoft settles an average of one billion dollars in IP claims a year. Microsoft trades on IP violations all the time. It seems to wrong for them to use that same framework against open source."

Brilliant! Gotta love that slap in the face ;-).

Reply Score: 17

by flanque on Thu 11th Oct 2007 22:08 UTC in reply to "LOL!"
flanque Member since:

I guess we'll see who can hold their poker face the longest.

Reply Score: 4

It's great
by SlackerJack on Thu 11th Oct 2007 22:04 UTC
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That Mark and RedHat can stand their ground on this, unlike other companies I could mension who jerk their knee like it's been hit by a hammer.

Reply Score: 3

Kudos to RedHat for showing good style
by britbrian on Thu 11th Oct 2007 22:06 UTC
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Not being goaded by Ballmer must be pissing him off even more. No need to worry when business is growing every quarter very nicely.
Somehow I don't see Ballmer's rumored prediction they'll being eating out of dumpsters in two years coming true ;)

Edited 2007-10-11 22:08

Reply Score: 3

jayson.knight Member since:

"No need to worry when business is growing every quarter very nicely"

Business is growing? Their stock has remained flat for the past year, in what warped economics sense is that growing?

Reply Score: 1

Rahul Member since:

Just maybe because the profits are increasingly quite nicely year over year?

Reply Score: 8

JonathanBThompson Member since:

It's a weird misconception people have that "stock price=accurate statement of well-being/profitability" because all a stock is worth after people buy the stock via the IPO is towards some small share of the company, the voting rights that may/may not go along with it (depending on the details of the stock) and possibly, if the company desires, the dividends handed out of the quarterly or yearly profits.

Having looked briefly at Red Hat's latest financial filings, I would very much like to have my personal financial picture "die" so horribly, regardless of what the outside world otherwise thinks of my future prospects. All a stock price is, once you remove the meaning as stated above as it relates to reality, is a measure of faith of what people believe it's actually worth. Where this could actually become a problem is if you're a profitable business that people don't put a high enough value on the stock, and then outsiders that are wise enough to realize what they're looking at say, "Oh, goody! Pure profit!" and buy out the company, and usually changing how things are done, often to the detriment of the newly-acquired company. Beyond that sort of worry, a stock price means almost nothing.

Reply Score: 8

britbrian Member since:

From the article
"If Red Hat takes alarm and responds to the Microsoft assertions, it will fan the fears, uncertainty and doubt that Microsoft is hoping to exploit with its statements. As it adds 10,000 customers a quarter, Red Hat must concentrate on executing its own business strategy and not get distracted by the assertions of competitors, he added."
is the sense I was referring to.

However my main point was they are not getting goaded by Ballmer

Reply Score: 3

spikeb Member since:

stock is not growth, or anythign else. redhat's stock has always been relatively stupid compared to their actual business numbers.

Reply Score: 4

MamiyaOtaru Member since:

MSFT stock has been relatively flat since 2000 (compared to its performance before especially). Next you'll tell me their business isn't growing either?

Reply Score: 5

Red Hat has good taste
by buff on Fri 12th Oct 2007 00:28 UTC
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I know a lot of people see Red Hat as the Microsoft of Linux. But you have to give them credit for not jumping into the fray and showing good restraint. I also respect them more for not scrambling to cover themselves with a Microsoft IP blanket scheme to offer them legal 'protection'. It is nice to see a company *not* react like a chicken with its head cut off hoping to snuggle up with Redmond. I also appreciate their contributions to Fedora and the tools they release under the GPL which I use a lot for administration.

Reply Score: 6

stock price on services company
by TechGeek on Fri 12th Oct 2007 01:26 UTC
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The problem that Red Hat has with their stock is that investors only want 20% of a companies revenue to come from services. They view products as much more profitable. So for a services company, this presents a problem. As a result, the stock experts under value Red Hat stock.

Reply Score: 2

RE: stock price on services company
by spotter on Fri 12th Oct 2007 16:28 UTC in reply to "stock price on services company"
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RedHat is *under*valued? What are you talking about? A company with only $463m in annual revenue and on $69m in annual net income with a $4.1b market cap is undervalued?

Come on, their trailing P/E rating is 64 and even their forward P/E is 24. Compare that across the industry to companies like Sun, IBM, HP, Microsoft, which have training and forward P/E in the 14-18 ranges. If anything Redhat is overvalued. Along with Novell, Google, and Yahoo, Redhat make up the new dot-com bust with too high valuations on little revenue and profit streams.

Reply Score: 1

Not surprised
by DigitalAxis on Fri 12th Oct 2007 02:32 UTC
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I'm not terribly surprised by this... I mean, what do you EXPECT Red Hat to do? Red Hat is the closest Microsoft has to a rival in the Linux market (Novell dearly wants to be the top dog, hence the agreement; Linspire's just Linspire), and wants them gone. Furthermore, Microsoft really hasn't said anything for Red Hat to respond to, that it hasn't already.

Microsoft's previous attempts to get rid of Open Source and Linux in particular have been about as successful as using a shotgun on a swarm of bees, so now they have to resort to vague unsubstantiated threats. It's just getting stupid.

Edited 2007-10-12 02:34

Reply Score: 3

by dylansmrjones on Fri 12th Oct 2007 03:53 UTC
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And while we speak Microsoft sues Redhat and Novell through a third party (IP Innovation LLC):

I can't see that patent survive ->,072,412

Reply Score: 4

by Marcellus on Fri 12th Oct 2007 06:33 UTC in reply to "LOL"
Marcellus Member since:

They're already after Apple over the same patent, and it's currently unknown (AFAIK) if they plan to go after MS as well.

But since you're convinced MS is behind this, how about you provide any proof?

Reply Score: 1

RE[2]: LOL
by porcel on Fri 12th Oct 2007 13:51 UTC in reply to "RE: LOL"
porcel Member since:

IP Innovation, which is a subsidiary of the Acacia Research Corporation, develops no products of its own. Its only product is litigation.

Well, it turns out that Acacia's new vice president (as of July) and executive vice president (hired at the beginning of the month) were both formerly in management at Microsoft.

I know, it's just a coincidence, right?

I think not:

Reply Score: 3

RE[2]: LOL
by dylansmrjones on Fri 12th Oct 2007 14:36 UTC in reply to "RE: LOL"
dylansmrjones Member since:

July 26, 2007 : Jonathan Taub (then Director of Strategic Alliances for the Mobile and Embedded Devices (MED) in Microsoft) joins Acacia Research Corporation as Vice President.

October 1, 2007 : Brad Brunell (former General Manager for Microsoft's Intellectual Property Licensing and former Senior Director with responsibility for digital media licensing (making deals with Disney and Time Warner) and setting up the DRM-patent licensing company known as Content Guard and he is also former Group Manager in Microsoft managing business groups responsible for Microsoft's DRM technologies) joins Acacia Research Technologies as Senior Vice President.

October 8, 2007 : It is reported that Steve Ballmer, Microsoft, threatens Red Hat with patent lawsuits in the beginning of October 2007.

October 9, 2007: IP Innovation, a subsidiary of Acacia Research Corporation, sues Red Hat and Novell over a patent for implementing "sticky windows" on multiple workspaces.

Hmm... That pattern says everything.

They are not going after Microsoft. Microsoft does not have such a thing implemented, though the XP power toy is a possible target - except Microsoft controls the company completely.

Reply Score: 2

RE[3]: LOL
by Marcellus on Sat 13th Oct 2007 06:27 UTC in reply to "RE[2]: LOL"
Marcellus Member since:

Does it mean anything at all that MS people went to this company? No. But of course, you see MS "Men in Black" around every corner and can't comprehend the fact that execs do change companies now and then.

It doesn't take a genius to figure out that someone would target Linux with a lawsuit such as the one against RH and Novell, eventually. Does that mean MS is behind it? No, but you take it as fact that MS are because Acacia took some people from MS.

Please just go to groklaw and slashdot and join people of your own caliber where you can pat yourselves on the backs with incoherent MS bashing.

Reply Score: 1

RE[4]: LOL
by dylansmrjones on Sun 14th Oct 2007 19:59 UTC in reply to "RE[3]: LOL"
dylansmrjones Member since:

Does it mean anything at all that MS people went to this company?

No it doesn't have to mean anything. Just because there is a sequence doesn't mean the elements are related. In order to establish relationship we need more information than just sequence. If you read my post, you'll see that I'm not basing it solely on sequence but on further analyses.

It is suspicious that execs with special knowledge on patents and patent ligitation are switching company just prior to (or at the same time as these) warnings about patent ligitation.

No. But of course, you see MS "Men in Black" around every corner and can't comprehend the fact that execs do change companies now and then.

Insults and ad hominem attacks are not valid arguments. But no, I don't see MS "Men in Black" _anywhere_. But Microsoft does have a proven track record for violating laws and stooping as low as possible to beat competitors. Of course I can comprehend people switching from one company to another, but when people with special knowledge about patents and patent ligitation switches to another company just prior to their former company warning about lawsuits against a specific company, and their new company just after that warning sues that named company, then the pattern is VERY suspicious. That this is a sequence of "coincidences" are highly unlikely, considering their knowledge, the timeframe, the warnings from Steve Ballmer, the new company's reputation as patent troll, Microsoft's past as criminal organisation with no respect for laws at all or decent behavior.

Acacia didn't just take some people. They took some people just prior to suing Red Hat. And these people have special knowledge about patents and patent ligitation and Acacia sued (through proxy) Red Hat just after Steve Ballmer warned about patent ligitation against Red Hat.

I never read slashdot. Slashdot are for GPL-fanatics and Microserfs. I read Groklaw, but Groklaw is about law and not about Microsoft or Red Hat or anything but lawsuits about software.

When Microsoft misbehaves it deserves bashing. When Red Hat misbehaves it deserves bashing. When Microsoft does something right, it deserves being applauded. Sometimes I'm against Microsoft, sometimes I'm pro-MS.

There are many posts at OSN where I defend Microsoft. There are also many posts where I bash Microsoft. Does that make me a GPL-zealot (despite being ambivalent about GPL)? Does that make me a MS-basher (despite often defending Microsoft)?

Reply Score: 2

Who would you want as a business partner?
by Haicube on Fri 12th Oct 2007 06:02 UTC
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a) Would you prefer Red Hat, a company with strong integrity, market lead and with strict moral


b) A partner, like Novell, who simply don't have a competitive product offering and therefor teams up, in an immoral way, with companies and claim indemnification of unknown IP and such?

Well, to be honest, I would hate to see the market going for option B. Red Hat is doing the right thing, and even though I'd never consider Linux for anything really, I must say that thoughts have (finally) come across to start deploying Red Hat, just because they can be trusted, unlike other acts mentioned in this letter.

Reply Score: 3

Marcellus Member since:

b) A partner, like Novell, who simply don't have a competitive product offering and therefor teams up, in an immoral way, with companies and claim indemnification of unknown IP and such?

Well... I can't say if Novell have competitive product offerings or not, but...
Go down a bit on the page and read what it has to say about the MS agreement...

For the lazy ones:
Microsoft has extended its covenant to not sue users of Linux-based products from Novell to all GPL v3 users as soon as GPL v3 code is integrated into SUSE Linux Enterprise. This means that the patent protection Microsoft extends to Novell customers now covers every customer who uses any Linux-based software that Novell distributes under GPL v3.

Reply Score: 0

B. Janssen Member since:

Haicube: b) A partner, like Novell, who simply don't have a competitive product offering and therefor teams up, in an immoral way, with companies and claim indemnification of unknown IP and such?

Bold by me. If that would only be true. Novell Directory Services (eDirectory) are still THE directory services. Only Microsoft's ADS comes close and Red Hat's ODS (former Netscape DS) is just mediocre in comparison. Despite all the shortfalls of proprietary software, there are good reasons to go with Novell on this one. And if a company is already deploying NOES2, why not deploy the SLED, too?

Reply Score: 1

Show us the code!
by mmu_man on Fri 12th Oct 2007 09:33 UTC
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Just stop naysaying and show us the offending code if any .
Else it's just defamation and RedHat could sue them over it.
btw, looks like is dead...

Reply Score: 1

What will be fun
by Earl Colby pottinger on Fri 12th Oct 2007 09:38 UTC
Earl Colby pottinger
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If Microsoft does take this to court all RedHat's lawyers have to do deliver a condensed version of the SCO case to the judge. In particular point out each and every example of the non-delivery of pointing out claimed conflicts, and how much court time/money was wasted without a single valid violation being found by SCO.

Hopefully the judge will cut through some of the FUD and demand Microsoft start suppling some patent numbers.

That Linux violates some of Microsoft's patents I am sure it very true. However, does not mean they are patents that will hold up in court if challenged or can not be worked around.

Reply Score: 1

by hitest on Fri 12th Oct 2007 20:44 UTC
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Show us the code, Steve, or go home.

Reply Score: 3