[ISN] Surprise Settlement Evenly Splits Microsoft

From: InfoSec News (isnat_private)
Date: Mon Jan 21 2002 - 00:21:39 PST

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    Forwarded from: "R. A. Hettinga" <rahettingaat_private>
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    Status:  U
    Date: Sun, 20 Jan 2002 00:44:14 -0500
    To: dcsbat_private
    From: "R. A. Hettinga" <rahettingaat_private>
    Subject:  Surprise Settlement Evenly Splits Microsoft
    Sender: bounce-dcsbat_private
    Reply-To: "R. A. Hettinga" <rahettingaat_private>
    Decision Keeps Redmond from Monopolizing Massive Microsoft Patch Industry
    Redmond, Wash. (SatireWire.com) - In a surprise settlement today with
    nine U.S. states, Microsoft agreed to be split into two independent
    companies - one that will continue to make Microsoft operating
    systems, browsers, and server software, and another, potentially
    larger company that will make patches for Microsoft operating systems,
    browsers, and server software.
    Critics immediately charged that the settlement - which overrides a
    previous agreement with the U.S. Department of Justice - does nothing
    to diminish Microsoft's standing as the world's most powerful software
    company. But industry analysts argued that providing patches for
    security holes in Microsoft programs is a major, untapped growth
    industry, and applauded the states for not allowing Redmond to control
    "Just consider, Microsoft can make an operating system, such as
    Windows XP, and sell 200 million copies, but each one of those copies
    is going to need at least five patches to fix security holes, so
    that's 1 billion patches," said Gartner Group analyst Mitch Fershing.
    "That is an enormous, undeveloped market."
    Microsoft employees seem to agree, as sources in Redmond described a
    "mad scramble" among staffers to position themselves for spots at the
    new company, called Patchsoft. Asked why people would want to leave
    Microsoft for a startup, the source said the answer was "really quite
    "Everyone here is asking themselves, 'Do I want to be part of the
    problem, or part of the solution?'" he said.
    But J.P. Morgan analyst Sherill Walk suspects another motive.
    "Considering the sheer number of patches we're talking about, I think
    the new company will become another monopoly, and I believe the people
    who've jumped ship very well know that."
    "Nonsense. It's really all about consumer choice," responded
    Patchsoft's new co-CEOs, Bill Gates and Steve Ballmer.
    But how will Patchsoft make money? Currently, Microsoft issues free
    patches for problems in Windows XP, SQL Server, Internet Explorer,
    Outlook, Windows 2000, Flight Simulator, Front Page, Windows Me, Media
    Player, Passport, NT Server, Windows 98, LAN Manager (for a complete
    list of MS software needing patches, see www.support.microsoft.com).
    Under the agreement, Microsoft will no longer issue patches, which
    Gates said explains the recent five-day outage at Microsoft's upgrade
    site. "That was planned," he said. "It was a test of the Microsoft No
    Patch Access system. Went perfectly. No one was able to download
    At a press conference to outline the settlement, Connecticut Attorney
    General Richard Blumenthal pledged to keep a close eye on Patchsoft to
    ensure it would not overcharge for its services. He also expressed
    hope that other firms would soon become Certified Microsoft Patch
    Developers (CMPDs) and challenge the spin-off. Asked if Patchsoft,
    with so many former Microsoft employees, will have an advantage over
    potential competitors in the Microsoft patch market, Blumenthal said
    the settlement prohibits collaboration.
    "Patchsoft developers will not have any foreknowledge of bugs or
    security holes before software is released. They'll just have to be
    surprised," he said.
    "So it will be just like it was when they were at Microsoft," he
    One Reuters reporter, meanwhile, questioned the long-term viability of
    Patchsoft. "This seems like a logical split right now, but what if
    Microsoft's products improve to the extent that patches are needed
    less frequently, or perhaps not at all?" she asked.
    "I'm sorry, I can only respond to serious questions," Blumenthal
    Copyright  1999-2002, SatireWire.
    R. A. Hettinga <mailto: rahat_private>
    The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
    44 Farquhar Street, Boston, MA 02131 USA
    "... however it may deserve respect for its usefulness and antiquity,
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    experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
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