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2003 May 09 12:44

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Re: [vox] OS/2 and Linux, why has IBM changed?
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Re: [vox] OS/2 and Linux, why has IBM changed?

On Fri, May 09, 2003 at 10:34:06AM -0700, Joel Baumert wrote:
> > 
> > (a) Pay stockholders back for the illegal withholding of dividends
> > 	over the past twenty or so years (that's why they've got $50 
> > 	billion in the bank).
> I am not sure why you would require this. I'm not sure what the
> illegal thing that Microsoft has done here. They may need that
> money here shortly to protect themselves from a number of patent
> and antitrust actions that are winding through the courts.  If
> they spend that money they could be in serious problems if they
> have multi-billion dollar patent losses.

Microsoft doesn't need this type of money to protect itself from 
lawsuits of any type -- thats what their (rather large) legal department 
is for, and that cost is covered strictly out of operations funds.

Microsoft's cash-hoarding practices are both illegal and detrimental 
to minority shareholders; the only reason why Microsoft hasn't paid
dividends is because it grants a tax-break to Bill Gates and Co., who
would otherwise have to pay the top-marginal tax rate as applied to
dividends (a little under 40% as of 2002).  Microsoft is also guilty of
tax-dodging; accumulating wealth "beyond the reasonable needs of the
business" subjects Microsoft to an Accumulated Earnings Tax[1], which
they have never paid.

(But you are correct -- not paying dividends isn't illegal).

> I think that should be allowed to partner, but would have
> completely different management, stock, and would have to offer
> the same agreement terms to any taker.  This could obviously be 
> abused, but separating the shareholders from an operating system
> and applications group should fundamentally change the value
> equation.

Not really; if they're allowed to partner, they can engage in the same
underhanded deals that they have in the past; even if they allow the
'same agreement terms to any taker'.  What's to stop them from putting
explicit requirements in the term of the agreement that would only be
acceptable to the other half of the former juggernaut, even if it isn't
listed explictly by name?

> I think that Microsoft is in for significant legal and market 
> pressure in the next decade that may make it difficult for such
> a large company to compete as it has in the past. Essentially,
> I think that their days are numbered, not that they are going
> to disappear, but that they will become less relevant as we move 
> foreword.

On this, I agree -- Microsoft stock growth rates have slowed down quite
heavity, and it's pretty clear from their management decisions that they
have become a problem looking for a solution, rather than the other way
around.  Linux is kicking their collective ass in the low-end server
arena, and hardware capable of running Windows isn't powerful enough to 
tackle the high-end dominated by Sun and IBM.  Their licensing changes
are pissing off customers left and right[2], and even Joe Consumer is
starting to look towards alternatives.

> I would probably add another item. You cannot change the
> licensing agreements with maintenance patches. I think that
> going forward it will be more likely that product liability
> laws will be applied to software without regard to the EULA.
> Software companies will probably have to face increasing 
> pressure from trial lawyers for sloppy releases and this 
> will fundamentally change the way that software is produced.

That's actually covered by contract law already; the terms of a contract
cannot be changed unless both parties explicitly agree to the change.
This is probably why Microsoft has never tried to test the EULA in
court -- it really is unenforcable.

As per product liability laws, I think that we should stick with the way
the rest of the economy does things -- the provider of a tool is only
liable provided that gross negligence was demonstrated.  For example, if
my company finds a security hole, and immediately begins work on a patch
that is released a month later, my company would *not* be held liable
for damages (due dilligence).  On the other hand, if we tried to cover
the exploit up without fixing the problem, we would be liable.

[1] As per IRS Publiction 542.

[2] My employer chose Linux for file service; partially because we're
    already a half-Unix shop (Solaris for the big servers), and also
    because the cost-savings was something on the order of fourty 
    thousand dollars.  We lost a little functionality[3], but in the end
    our experiences have been overwhemlingly positive.

[3] Samba doesn't support NT groups yet, and I've still had some trouble
    getting printer driver downloads to work properly in a 
    cross-platform[4] fashion.

[4] Across Win98 and Win2K.

Don Werve <donw@examen.com> (Unix System Administrator)

Yorn desh born, der ritt de gitt der gue,
Orn desh, dee born desh, de umn bork! bork! bork!
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