It seems that everybody and his mother is bent out of shape about the comments of Microsoft Senior VP, Craig Mundie. He made two assertions that particularly raised the heckles of many in the Open Source community. The first was that the Internet start-up craze created many implausible business models (ie business were giving product away for market share). The second was that Microsoft’s proprietary Intellectual Property (IP) model is the only sound way to run a business. He said:

Whether copyrights, patents or trade secrets, it was this foundation [IP rights] in law that made it possible for companies to raise capital, take risks, focus on the long term, and create sustainable business models.

Now, much of this essay is just inflammatory drivel, but the question is why did Microsoft bother? Was this a carefully planned marketing plot to get slashdot eyeballs? Does Microsoft really expect Mundie’s essay to convince anyone that Microsoft is the last bastion of God’s Own Capitalism? I doubt it.

To understand the motivations behind the publication of Mundie’s statement, take a look at this CNET article. Seemingly unrelated, it talks about Microsoft’s promise to release Windows XP, the .NET OS, in October. Of particular note is the concern retailers express that WinXP will cannibalize the sales of Microsoft’s other new platform, the Xbox. If Microsoft had a similar OS/gaming platform release even two years ago, no one would have suggested that there would be be a problem. After all, Windows is for Real Computing (tm) like doing spreadsheets, writing memos and connecting to the shared network hard drive. Games are for the little kiddie-winkles, right?

Take a look at what the Xbox is. Surprise! It’s just a stripped down PC. In fact, it does almost everything a PC can. It has an Intel processor, a hard drive and an ethernet card. If the PC on your desk is a few years old, chances are the Xbox is more powerful. There’s no reason the Xbox couldn’t run Microsoft Office, Internet Explorer or Linux. That’s right, Microsoft might just have handed Linux is best chance at desktop penetration to date.

The sales of Win2K and WinMe (harder) have been sluggish. Although new PCs come with one of these new Microsoft OS’s installed, people just aren’t buying PCs like they used to and businesses are loathed to spend dwindling IT budgets on another big OS rollout (many of us remember the win95 rollout. Oy!) Microsoft seems to be betting the farm on Windows XP, but why will people buy it? Sure, new PC owners won’t have a choice, but maybe they’ll buy the cheap Xbox and get all the functionality they need. Where will that leave Windows, the jewel of the Microsoft’s product line? In a museum.

But how does this relate to Mundie’s comments? Linux is already “eating Microsoft’s lunch” in the server market. Microsoft needs consumers to believe that Open Source software is anything but the unbelievable value that it is. Remember, Microsoft only rents you software; Open Source software is yours to keep. As Microsoft uses web services to finely control application usage to only licensed users, Open Source software’s consumer value will begin to become wildly attractive to IT departments strapped for cash. The Big Lie Microsoft needs you to believe is that every software upgrade they sell will make your life better. In fact, the only ones who benefit are Microsoft shareholders. And so, it’s not so surprising that a weakened and uncertain Microsoft is taking pot shots Open Source software. It’s all just another sign of their growing desperation.

[Original post and comments.]