"A common trait of many of the companies that failed is that they gave away for free or at a loss the very thing they produced that was of greatest value--in the hope that somehow they'd make money selling something else," according to a white paper authored by Senior Vice President Craig Mundie.
In the paper, which accompanied remarks Mundie made to an audience at New York University's School of Business, he argues that releasing source code into the public domain is "unhealthy", causes security risks and "as history has shown, while this type of model may have a place, it isn't successful in building a mass market and making powerful, easy-to-use software broadly accessible to consumers."
The speech by Mundie--regarded as one of Microsoft's chief software strategists--is the latest move in a long-running public relations campaign by Microsoft to combat the open-source movement. Under the open-source model, which has created successes such as the Linux operating system, the underlying code of a program is freely available for other programmers to examine and modify.
As the largest independent software maker, Microsoft's entire business is predicated on selling new releases of its Windows operating system, Office business applications and other products. The open-source movement, and in particular the General Public License (GPL), is at odds with the company's business goals.
"That's their business," said Keith Waryas, an analyst with IDC. "It doesn't surprise me that they don't want to give away their product."
Proponents of the open-source approach say it helps to improve software quality by finding bugs more quickly and combining the talents of multiple developers around the world. Microsoft argues that giving software away is, at minimum, a bad business decision, and, at worst, theft of intellectual property.
Mundie's comments largely echo a similar message delivered by Jim Allchin, another Microsoft executive, in February. Allchin, at the time, said "open-source is an intellectual property destroyer. I can't imagine something that could be worse than this for the software business and the intellectual-property business."
The comments from Mundie and Allchin are in keeping with Microsoft's long-held positions, said Waryas.
"When Microsoft first came out with DOS and Windows (operating systems), the entire software market was based on sharing and open source," said Waryas. "Microsoft was the first to buck that trend and start selling their stuff."
Not all large software sellers oppose the open-source movement. In the past year, IBM has been championing Linux, vowing to invest $1 billion on Linux development and marketing this year.
Microsoft itself seems somewhat torn on how to approach the open-source movement. While Microsoft denounces the move toward free software, it does recognize at least some of the value of open-source development. Since last year, Microsoft has made available to hundreds of its larger customers copies of its closely guarded Windows source code. The company hopes its best customers can help it improve Windows.
Microsoft is trying to reach what Mundie described as a balance between completely open and proprietary approaches.
The company is shooting for a "shared-source philosophy," he said, that allows Microsoft to share source code with customers and partners while maintaining intellectual property.