Microsoft has followed in the shoes of HP and Novell and decided to indemnify its customers against future legal threats. But while the decision is great marketing it will have little impact on users, experts have said.
For several years, Microsoft has indemnified its volume licence customers. Last year, it lifted the monetary cap on that protection. It is now extending that protection to virtually all users of its products.
"This expansion will cover several million more people," said David Kaefer, director of business development at Microsoft. "We performed a review of the indemnification we offer today and came to the conclusion that there really is no reason why we would not offer it to anybody." The indemnification covers legal costs and damage claims from patent, copyright, trade secret and trademark claims. Windows CE is not covered however.
Such programs have become something of a fashion recently, especially the litigious US. It has gained most prominence with Linux though following the SCO Group's copyright infringement threats over the past year. That action has caused first HP (in September 2003) and then Novell (in January 2004) to reassure its Linux customers that it will take whatever legal problems arise through their use of the open-source software bought from them.
"It is important that the vendor is willing to stand up for the integrity of its products," said Ken Meszaros, assistant vice president and infrastructure manager at LandAmerica Financial Group. "Microsoft offering indemnification for all its products, regardless of licensing strategy, is a positive change and helps to protect us from intellectual property issues."
While having a form of free insurance is always nice, Microsoft's expanded indemnification appears to be mostly a marketing move, said David Elkins, a partner in the intellectual property practice of Squire, Sanders & Dempsey. Customers who could ever need protection, the largest corporations, were already covered, he said.
"Microsoft is using its financial power to enhance its marketing advantage in this particular area," Elkins said. Smaller Linux vendors can't match Microsoft's blanket indemnification because they don't have the financial means, he said.
Indeed, Microsoft plans to make indemnification a more visible part of its Get the Facts campaign, a marketing effort by the Redmond, Washington, software vendor that favourably compares Windows with Linux, Kaefer said.
"Indemnification is one element in overall platform value, just like total cost of ownership, security or reliability," Kaefer said. "If you compare the leading Linux vendors to what we're offering, those vendors really have much narrower indemnification."
Al Gillen, a research director at IDC, said that Microsoft's indemnification program expansion won't mean much to software buyers in a practical sense. "The chances are that if a customer was sued over intellectual property violations by Microsoft software there is a pretty good chance that Microsoft would have to step into the fray anyway," he said.
Microsoft's program doesn't cover Windows CE or Windows XP Embedded, however. It has less control over those products because partners can modify the source code, Kaefer said.