Jane Wakefield: The day the hackers broke Microsoft's heart

News that Microsoft has been hacked will give the Microsoft Unappreciation Society even more ammunition in its war against the software giant. Not that much more ammunition is needed -- the amount already accumulated would make Colonel Gaddafi green with envy.

It would be fair to say that 2000, despite the (delayed) launch of Windows 2000, has not been Microsoft's year.

What with a US judge ordering the company to split itself in two and the European Commission probing alleged abuse of power, it is a wonder Bill Gates hasn't taken himself off to the woods and hidden in the hollow trunk of a tree. If I was Bill Gates, that is what I would do, but I guess that kind of attitude is unlikely to have spawned the world's largest and most powerful corporate empire, so who am I to advise?

Perhaps the most worrying aspect of Microsoft's latest gaffe is the message it sends out about the power of hacking. Say what you like about Microsoft but one thing is indisputable -- it loved its source code. It was its golden egg, its crown jewels, its most treasured possession. It is the building block of the whole empire and Microsoft's staunch refusal to publish it has been one of the biggest guns in the Microsoft Unappreciation Society's arsenal.

Now it would seem someone else (almost certainly someone who spends a good deal of time in his/her bedroom) has seen Microsoft's most closely guarded secret and the news must be sending shivers down the spine of every chief exec in the land.

It has been suggested that the Microsoft hackers could have been intending to hold the source code hostage. Last century, criminals keen to get their hands on a slice of a tycoon's fortune resorted to kidnapping their children. This century virtual abduction is more in vogue. And while the hijacking of intellectual property is an altogether more humane form of kidnap, it is potentially far more threatening to companies. Hacking, rather than revolution, could prove the downfall of capitalism in ways Karl Marx would never have dreamt of.

Intellectual property is increasingly becoming a company's most precious asset and one that has sent Intel, Rambus and Hyundai among others rushing to court in order to protect it. (A tip for anyone keen to change career path: become an intellectual property lawyer, you will make a fortune). AMD is so worried about protecting its IP it has employed a vice president of it.

Microsoft's tale of woe will send out renewed danger signals about how vulnerable such property is. It needs anti-intrusion software to be the cyberequivalent of Fort Knox, something which Microsoft apparantly failed to provide. One of the many accusations levelled at Microsoft is that it leaves backdoors in its software allowing the US national security service to wander in whenever it likes and see what people keep on their PCs. This time, it would seem, it not only left the back door open, it left the lights on and a big sign saying "STEAL ME" stuck on the entrance.

Well, that is a slight exaggeration. In fact, it is suspected that the hackers created their own backdoor using an application called QAZ, but Microsoft was obviously sleeping on duty. And if Microsoft cannot protect its most treasured jewel, what hope does the rest of the tech industry have?

In the old economy we had busts and booms, inflation and job losses affecting the equilibrium of capital. In the new economy the enemy is more likely to be a spotty teenager banging away furiously on his bedroom PC.

There is a small extremist breakaway group of the Microsoft Unappreciation Society that has an outrageous conspiracy theory about the whole debacle. It suggests that before the FBI begins its trawl for the culprits, it should first of all look closer to home.

Microsoft itself, so the theory goes, has the most to gain by stealing its own source code and blaming it on outsiders. Then, with source code freely available for everyone to potentially see, what point in continuing with the ridiculous DoJ persecution. Without its golden egg, how can it be continue to lay monopolistic software? Without its crown jewels, what can it do to abuse its power? In short, with its source code out in the wild, what point in pursuing it?

That of course is a silly idea, one that should be confined to the bin marked 'lunatic conspiracy theories' alongside the one that says Marilyn Monroe was abducted by aliens and the theory that Elvis didn't die but is currently living in a maisonette just outside Crewe.

It is worth noting that Microsoft's hack attack has not worried shareholders. Its shares, in fact, are up.

I personally have my own theory about the attack. I reckon that Microsoft, fed up with being hauled up on security blunders, has made the whole thing up. Then, the next time a bug is found in its software, it will hold its hands up and claim it was the nasty hackers that did it.

I would however, in the interests of balanced journalism, like to remind everyone that Microsoft is not always embroiled in disaster. Last week it rolled out the its test version of the next Office software earlier than expected. Now that is impressive and very unlike Microsoft -- the conspiracy theorists will be muttering that the hackers finished the job.

Of course the funniest thing about the whole sorry tale is that Microsoft has always maintained that the reason it hasn't released its source code is because doing so would compromise security. That line of defence is looking a little wobblier today and will give fans of Linux a surer footing in calls for an open source Microsoft code.

Poor old Bill Gates. He is being battered from so many sides he must be wondering whether it is worth being a billionaire. He once (and I literally mean once) joked that computers were unreliable and advised a group of conference attendees to keep their prized possessions in a shoebox because "shoeboxes can't crash".

Today he might be wishing he'd stashed his source code in a similar way.

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