Software: Microsoft's Suing Spree

Magazine News Story/July 31

After years of turning a blind eye to piracy, Microsoft is finally cracking down on software thieves. In its biggest legal action ever, the company filed 26 lawsuits in seven states on July 18. The suits accuse companies of selling unlicensed versions of its two main products—the Windows operating system and Office desktop software.

Microsoft says it is working to protect its partners, through whom it sells most of its software. Pirated software causes honest partners to lose out on business, says Mary Jo Schrade, senior attorney at Microsoft. “Honest resellers and distributors are telling us we need to do more to support them,” she says.

But there may be more to Microsoft’s actions, says Carmi Levy, analyst with the Info-tech Research Group. Microsoft is at a critical point in its business as it attempts to shift from producing shrink-wrapped boxes to delivery of software as a service. In November, Microsoft Chairman Bill Gates sent a memo to employees urging them to better leverage web-based software and services. The coming “services wave” will be highly disruptive to the software industry, he said.

With the future of boxed software being called into question, Microsoft needs to work harder than ever to protect its existing revenue stream. “I don’t think Microsoft has a choice,” says Mr. Levy. “They need to do this because they are trying to shift their revenues, but until then they have to do everything they can to protect their existing products.”

Some 21 percent of all software in the United States is unlicensed, causing $6.6 billion in losses last year, according to trade group Business Software Alliance. The No. 1 software maker is among the worst hit. Now, with improved broadband access, creating and distributing pirated software is easier than ever, says Mr. Levy.

Until recently, Microsoft’s attitude toward pirates was far less aggressive since acquiring more users, licensed or otherwise, could only help its hegemony. But now that the market is reaching saturation, the company is spending millions of dollars on legal action. In September, it filed suits against eight software resellers for piracy. The company has also started secret shopper programs to purchase hardware and software from computer dealers across the country and then run tests to determine their authenticity, says Ms. Schrade.

Security: Open Source Gets Ugly

Magazine News Story/ July 31, 2006

Proponents may believe that the movement can do no wrong, but could open-source tools and techniques be doing more harm than good? A July 17 report from security giant McAfee poses that question and reaches some disturbing conclusions. Open-source systems that help companies create efficient and inexpensive software can become instruments of online mayhem in the hands of hackers and cyber criminals, say McAfee security researchers.

“The open-source code-sharing model has contributed to the rise of malware,” or malicious code, says Dave Marcus, security research and communications director for McAfee AVERT Labs. “Without source-code sharing, we would not see the massive virus families today.”

Increased availability of the source code of viruses like W32/Mydoom has led to more types of malware. Bots, or a network of infected computers controlled by hackers, are on the rise, replacing legacy viruses for DOS and Windows 3.1, because of greater collaboration among malware writers.

Transparency and openness are generally considered essential when it comes to finding and fixing software vulnerabilities. Mailing lists are devoted to sharing information about security loopholes in popular products and finding patches.

But McAfee says some of those techniques can backfire. Malware writers are using open-source development models and software to share malicious code and collaborate on projects, increasing the efficiency of the malware creation process. “There are times when the community needs to show some restraint, some public responsibility, before sharing with the world,” writes Jimmy Kuo, a senior fellow with McAfee Avert Labs, in the report.

For example, cyber criminals are making available source code with documentation so that viruses can be easily modified to create more variants. They are also using open-source project management software, such as a Content Versioning system, to keep track of their nefarious projects, says the report.

Still, stifling conversation may not be the answer, says Mike Rothman, an analyst with consulting firm Security Incite. “Open source is a wonderful thing from the standpoint of building up a community to help troubleshoot and magnify development efforts,” he says. Instead, he suggests security experts be made responsible for the kind of disclosures they make and work better with the companies to fix loopholes faster.

Collaboration: India Blocks Blogs

Magazine News Story/July 31, 2006

For four days, all blogs on Google’s Blogger and Six Apart’s TypePad in the world’s largest democracy were mysteriously shut down, sparking an outcry among writers. As it turned out, the government of India had ordered the country’s Internet service providers to block access to some sites a few days after the deadly train bombings in the financial capital of Mumbai on July 11.

The Indian government says it was trying to squelch some of the radical voices in the country. “A two-page write-up containing extremely derogatory references to Islam and the Holy Prophet which had the potential to inflame religious sensitivities in India and create serious law and order problems in the country appeared in a blog,” says A.R. Ghanashyam, Indian deputy consul general in New York City.

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Software: Vyatta's Open Source Router

Startup Vyatta launched an open-source router for businesses on Monday, in a move that puts a new twist in the billion-dollar networking market dominated by such giants as Cisco and Juniper. yatta’s open-source Open Flexible Router software will be a low-cost, reliable alternative to proprietary solutions, the company said. Vyatta will also offer a software subscription service for businesses to receive software updates and professional technical support.

Vyatta is positioning for a chunk of a highly profitable business. The enterprise routing and firewall segment is estimated to be an $8-billon market. But it is largely dominated by networking giant Cisco, which has about 80 percent of the market. Though an open-source router hasn’t found success yet, Vyatta comes at a time when open source is in fashion. In April, publicly listed open-source software company Red Hat acquired JBoss, another open-source player, in a $420-million deal.

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Microsoft Files Piracy Suits

Microsoft said Tuesday it has filed 26 lawsuits in the U.S. against alleged dealers of pirated software in a move to protect its partners and curb the proliferation of unlicensed versions of its software. The software giant accused companies of pirating its software or installing copies of its products on computers they sold without paying license fees.

Piracy hits No.1 software maker Microsoft particularly hard. The company sells much of its software through partners. But often honest partners lose business to companies offering pirated software at cheaper prices. The company’s efforts to combat piracy are aimed at leveling the playing field for these honest partners, it said.

More at Red Herring Online