WINDING DOWN
An idiosyncratic look at the week's net and technology news and 
comment
by Alan Lenton
November 24, 2002

Interesting week this week with SEC filings from Microsoft lifting the lid on 
financial internals, a small victory for democracy in the UK, and Oracle's Larry 
Ellison shooting his mouth off at Oracle World. Just another week in the life of 
the web, I guess.


Shorts:

The most fascinating story of the week came out of Microsoft's filings with the 
Securities and Exchanges Commission. The filing broke down information on 
where its profits came from, and what it spent those profits on. It seems that it 
makes an 85 per cent profit on the Windows operating system. Eighty Five 
Percent. that's an incredible rate of return - and only possible because of the 
monopoly Microsoft enjoys on the desktop. Perhaps even more fascinating, 
though, is the revelation that it loses money on virtually everything else it puts 
its hand to. Last quarter the Home and Entertainment division (which includes 
the Xbox console) lost $177m, MSN blew $97m and the Business Solutions 
group lost $68m. The CE/Mobility division was the baby of the megacorp, 
'only' losing $33m. I think those who criticised the Department of Justice 
Microsoft trust deal are going to have a field day with these figures!

http://www.theregister.co.uk/content/4/28128.html

The World Wide Web Consortium (W3C) which sets the standards for the web 
(like HTML and HTTP) has finally come down firmly in favour of royalty free 
standards. Participants in the standard body must agree to licence patents on 
a royalty-free basis. About a year ago there was a proposal that W3C 
standards should be allowed to include chargeable patents. The suggestion 
cause a great furore, and threatened to cause a split in W3C. The whole issue 
was then put on ice while some free software developers were added to the 
patents policy group and the matter was re-discussed. The issue is not trivial, 
if the standards that make up the Internet and the web had not been royalty-
free, then it's likely everyone would be paying a fee to copyright owners every 
time they accessed a web site! Congratulations to W3C on the return of sanity 
to the discussion.

http://www.theregister.co.uk/content/6/28135.html

A report from the Aberdeen Group published earlier this month claims that 
Open Source software has a worse security record than Microsoft. They 
counted 16 Open Source security advisories out of a total of 29 in the first ten 
months of 2002. This is interesting. Leaving aside their counting (which is 
disputed in some quarters), personally, I don't think numbers are the key 
issue. Open source programmers are as vulnerable to making mistakes as 
anyone else. The point is that they get fixes out a lot faster. And it's not just 
that. I'm sitting at my computer here working on this column, and I truthfully 
can't remember the last time any of my Linux machines were hit by a virus. In 
fact thinking about it, I can't remember any of my Linux machines -ever- being 
hit by a virus. On the other hand, I got three copies of the Klez virus in the 
mail on my Windows machine this morning...

http://www.theregister.co.uk/content/55/28118.html

Funnily enough, there was an interesting piece of news came out earlier this 
week which may well have a bearing on the previous item. It seems that 
Microsoft will be issuing fewer warnings of 'critical' security vulnerabilities in 
future. Don't get excited - it's not because there are less problems, it's that 
they are being re-classified. Previously, advisories from Microsoft were 
classified as either Critical, Moderate, or Low severity, but now they will be 
classified as one of Critical, Important, Moderate or Low. And most of the old 
Critical ones will be re-classified as Important. To give you some idea the bug 
that allowed Code Red and Nimda to proliferate would be classified as 
Critical, but holes that allow your files to be stolen or deleted are only 
Important. So that's what they mean by 'trusted computing'!

http://www.theregister.co.uk/content/55/28191.html

Over here in the UK the Business Software Alliance (BSA) managed to 
extract vast amounts of money from a couple of UK businesses because the 
companies had unlicensed copies of commercial computer programs on their 
corporate networks. The BSA - a coalition of the big shrink wrap software 
producers - was, of course cock-a-hoop at the hit and trumpeted on about 
how the industry lost $11bn through piracy last year. This estimate, which 
bears all the hallmarks of being plucked out of thin air, assumes two things. 
One, that everyone pays the full list price for their programs - patently untrue 
as anyone who ever bought a commercial program will testify. Two, that 
people using the pirated copies would still use them if they had to pay for 
them - pretty unlikely in a large proportion of the cases I would say. But in any 
case there is an easy way for companies to avoid the attentions of the BSA 
Gestapo. Stop using software sold by the BSA's backers - there are plenty of 
much cheaper, or even free alternatives out for all but the most specialist 
uses. And if you opt for Open Source, not only do you save on the cost of the 
programs, but you also save the cost of having to track licenses. 

http://www.theregister.co.uk/content/4/28129.html

And while we are on the subject of affairs in the UK, a funny thing happened 
to the EU Copyright Directive on the way to the British parliament. It was due 
to be turned into a UK law before Xmas, but it seems that the response to the 
Patent Office's (PO) consultation document was so overwhelming that they 
are going to have to put off making the law while they read the responses. 
Oops! The problem for the PO is that although there were only about three 
hundred responses, they were virtually all carefully argued substantial 
documents which cannot be dismissed as the work of a loony write-in 
campaign. Indeed, many of them included alternatives to the PO's 
suggestions for how copyright law should be amended. The Patent Office 
reckon that it will take them until the end of March next year to work their way 
through the submissions, so the whole process has been put back until then. I 
guess sometimes democracy does make a difference, if people care enough 
to put in the hard work developing alternatives.

http://www.theregister.co.uk/content/4/28203.html

Red faces at Microsoft when users discovered they could FTP Microsoft 
internal documents from one of its public file servers. The documents 
available were hardly critical but they included a number of interesting internal 
policy documents, some of which I'll be analysing for your Xmas reading. 
What was critical though, was that it also made available a 1 GB zipped 
database containing millions of names and mailing addresses. Microsoft took 
the server off the air as soon as it became aware of the problem. 
Unfortunately, as soon as the server came back into use, more internal files 
appeared, resulting in another outage. A Microsoft spokesperson said that 
they don't comment on intrusion claims, and then commented that the 
information was out of date!

http://go.hotwired.com/news/infostructure/0,1377,56481,00.html/wn_ascii

And, to finish up this week, I have to tell you that Oracle's Larry Ellison has 
finally flipped his lid. I don't think I even need to comment on this statement 
from the head of the world's biggest database manufacturer to his customers:

"We are in the business of selling databases, and you have bought too 
many of them."

This fascinating statement was made to delegates at the Oracle World user 
conference in San Francisco last week. Ellison delivered the message via a 
video link from his Americas Cup yacht in New Zealand. I just can't wait to see 
the customers' response!


Scanner - Other Stories:

Microsoft and the US Government - a new partnership
http://www.salon.com/tech/wire/2002/11/20/ms_government/index.htm

Big retailers use DMCA to zap reports of Thanksgiving sales prices
http://www.wired.com/news/print/0,1294,56504,00.html


Have fun on the web!

Alan Lenton
alan@ibgames.com

Past issues of Winding Down can be found at 
http://www.ibgames.net/alan/winding/index.html.


