Microsoft throws open its Windows to govts

PARIS: Microsoft Corp said that it had given a dozen national governments access to its Windows source code in its battle to win lucrative public sector contracts and muffle mounting hype over rival software Linux.

Earlier this year, Microsoft started a new initiative called Government Software Program that involved opening up its flagship Windows operating system to governments interested in tailoring the software to fit, primarily, their security needs.

Microsoft said 12 countries, including Austria, Russia, China and the UK, had entered into the new deals, with another 35 in negotiation, since the programme started in January.

The stakes are high. An increasing number of corporations and governments are turning to the so-called open-source Linux software to run their desktop and networked computer systems, posing the biggest threat yet to Microsoft's dominant market position in computer operating systems.

Microsoft has turned up the heat in its offensive against vendors of Linux software and services -- which range from software titan IBM to Red Hat Inc. -- creating special funds and discounts to win over budget-conscious potential customers.

Linux, which is relatively cheap to install and is transparent because the key software was developed by volunteers, has built market share in servers -- the workhorse computers that feed Web sites, email and other data to desktop PCs.

Linux now runs some 15 percent of all servers sold in Europe, up from 0.7 percent in 1998, market research group IDC found.

NO "TOE IN THE WATER"

Opening up Windows was an unthinkable concept a few years ago before the open-source concept gained momentum, but Microsoft has been forced to respond to the new spirit in the software industry of allowing customers to tailor proprietary products to fit their needs.

"We are sharing what is arguably the most valuable intellectual property in the industry, which is Windows," Jason Matusow, manager of Micrsoft's shared source program, told Reuters in an interview.

Microsoft, with a stock market valuation of $284 billion built largely on Windows' dominance in desktop computing, is not opening up all the source code, like Linux.

But it has been offering a closer peek at the software to counter competitive pressure from the open source community.

"This isn't dipping a toe into the water," Matusow said.

Industry analyst Thomas Meyer at IDC said Linux was set to gain more market share because, unlike Microsoft, it is sold by multiple vendors. "Linux lends an air of impartiality. Linux keeps the doors open," he said.

EASTERN EUROPE EMERGES

On the corporate side, Microsoft will allow big enterprises to view, but not change, any of the core Windows 2000, XP and Server 2003 source code. Smaller companies with under 1,500 Windows desktops are not permitted any access.

Also, Microsoft has begun to allow licence-holders to tweak its Windows CE.Net and ASP.Net source codes, encouraging the development of commercial applications based on Microsoft code in areas where the software giant is a relatively new entrant and faces intense competition from connectivity software such as Java.

One such example is Japan's Hitachi, which has a high-speed-Internet-enabled personal digital assistant in development based on Windows CE.NET software.

Meanwhile, Wilfried Grommen, general manager for Microsoft business strategies for Europe, Middle East and Africa, identified Eastern Europe as a significant future market.

Microsoft pointed out that it had recently won contracts to help the Lithuanian and Romanian governments put tax-filing and visa-proccessing, respectively, online.

© Reuters