Trying to understand the recent patent licensing deal between Microsoft and Amdocs is like watching a poker tournament, where you never know whether players are bluffing or if they have pat hands. In this case, it appears that Microsoft is bluffing when it comes to Linux. An inspection of the facts, as they are known, indicates the “Linux licensing” element of the story is only more Microsoft FUD–with Amdocs being a willing participant.
This isn’t the story of an underdog being pressured by the Redmond giant into paying a bounty on some patents Microsoft claims are being infringed upon by Linux servers in Amdocs’s data centers. In fact, it appears as if Linux licensing isn’t really a part of this deal at all.
When Mary Jo Foley reported on the agreement in ZDNet last week, she described it this way:
“Today’s patent agreement announced between Microsoft and Amdocs provides ‘mutual access to each company’s patent portfolio, including a license under Microsoft’s patent portfolio covering Amdocs’ use of Linux-based servers in its data centers,’ according to Microsoft’s press release.”
In other words, the real deal has to do with Amdocs and Redmond gaining access to each others patent portfolios, which just happens to include the 235 or so patents Microsoft claims are violated by Linux. The issue of Linux was only raised because it’s good FUD, pure and simple. Again, I suspect Amdocs is a willing participant.
In case you don’t know, Amdocs is huge, with reported revenues of over $3 billion in the last twelve months. It offers a full service IT solution for the telecommunications industry worldwide, with a client base that includes Sprint, Comcast, Rogers Communications and others. Its software solutions are tailored for the industry and manage everything from billing to customer service.
After being a subsidary of Southwestern Bell for many years, Amdocs went public in 1998. In this century, the company has expanded its influence into banking and financial services and appears to have spent at least several hundreds of millions of dollars in acquisitions in the last ten years or so.
Like Microsoft, Amdocs is in the software business. It would appear the company sells its own stack and also acts as a reseller, most likely for products from folks like Oracle and Microsoft. As the company earns its keep by peddling proprietary software, it would be just as threatened by open source solutions as Redmond. So when it reached a cross licensing agreement with Microsoft covering a wide range of patents, adding some Linux FUD into the mix would be a no-brainer.
Last Wednesday, ZDNet’s Steven J. Vaughan-Nichols quoted Jim Zemlin, executive director at The Linux Foundation, who has a similar take on the matter:
“‘The key to remember here is this: When Microsoft signs a patent license agreement with a company and that company uses Linux, it doesn’t mean that the company concluded they needed a license for Linux. It only indicates that it concluded it needs a license to at least some of the Microsoft patents. Patent license agreements cover any and all technologies between the two companies. In the case of Amdocs: yes, they run their business on Linux servers, as most companies do today, but it is a mistake to conclude that Linux was the impetus for the licensing agreement. For Microsoft this is an attempt at another sound bite for a tired and dying FUD campaign.’”
In other words, it appears as if Linux had very little, if anything, to do with this agreement. Mr. Ballmer was just taking advantage of another opportunity to practice one of his favorite hobbies, the sowing of FUD. When they really have something, they’ll sue Red Hat, of that you can be sure.