Microsoft vs Mass.: What ever happened to 'The customer is always right'?

Is it just me, or is there something highly unusual about the extremely hard time that Microsoft is giving to the Commonwealth of Massachusetts over its decision to move to Open Document Format (ODF) as the standard for storing files produced by productivity applications like word processors and spreadsheets?  Whatever happened to the old saying that "The customer is always right (even when they're wrong)?"

Just when I thought I beat this issue to death with several blog posts, along comes a recording of the Open Format Meeting that was held in Massachusetts by the Mass Technology Leadership Council where the Commonwealth of Massachusetts heard feedback "on the latest draft iteration of their Enterprise Technical Reference Model, specifically the section on document formats."  Massachusetts Secretary of Administration and Finance Eric Kriss was in attendance as was the Commonwealth's CIO Peter Quinn.  Although than MP3 audio file of the entire meeting can be downloaded off the Net, text transcripts are beginning to show up.  The first one I noticed was on one of Tim Bray's posts (see New England Town Meeting) where he excerpted an exchange between Microsoft National Technology Officer Stuart McKee and other Microsoft representatives

What stood out to me is that Quinn (and other Massachusetts officials) spelled out in no uncertain terms what was important to the Commonwealth, what the Commonwealth's definition of open was, and what Microsoft had to do to satisfy the Commonwealth's requirements. 

On the "of critical importance" front, the discussion covered in great detail what it means for a state in the United States to maintain its sovereignty and how state officials felt that proprietary technologies are at odds with that sovereignty. The officials made it pretty clear that it felt as though the intellectual property rights (IPR) that Microsoft is maintaining with respect to its file formats were at odds with the non-negotiability of the Commonwealth's sovereignty.  They acknowledged that  it had no problem with software companies maintaining IPR on the software itself, like Microsoft Office.  But, to the extent that public documents will be stored electronically using certain file formats, there's minimal room for IPR to be connected with those formats.

Mass. officials also gave their definition of an open specification as one that meets the following three criteria:

• It must have no or absolutely minimal legal restrictions attached to it. 
  
• It must be published and subject to peer review
• It must be subject to joint stewardship

With the three criteria laid out, the officials explained to Microsoft's McKee and others that if Microsoft dropped it's patents on the file formats, really published the standard so it was available for peer review, and made the current versions and future modifications subject to joint stewardship, that it would be open to reconsidering its policy.

As you can see from the transcript on Bray's blog, and as you can hear from the audio file, McKee and the others representing Microsoft were fairly respectful in their delivery.  But, while I wasn't present to see the body language, the audio made it seemed as though they were out of place in conservative New England culture -- cracking coffee jokes at a relatively serious meeting and saying things like "There's 400 million people using Office. It's embarrassing to say that very frequently." No one was laughing.  At one point, during a sort of tongue-in-cheek invitation to an IT matters debate, McKee confused New England Talk Radio Host Howie Carr with Harvard's Nicholas Carr. 

As a result of the deliberations with Massachusetts, Microsoft apparently swallowed a bitter pill by making the license to the Office file formats perpetual and royalty-free.  McKee noted this was a big change for Microsoft.  While Microsoft has come a long way in addressing the Commonwealth's concerns, rather than adopting a conciliatory tone (and this is my opinion), Microsoft's overall response in the meeting challenged the Commonwealth's logic and put state officials on the spot, forcing them to explain their rationale in a way that most companies would never tolerate (rather than saying "We totally get it, we hear you, we understand your requirements, and we'll get back to you").  At one point, Microsoft's Brian Berg made it clear that he and others had gone to the Commonwealth's Senators with the issue.  Based on his account of those discussions, he briefly called into question the Commonwealth's execution of the legislation that led to policy requiring ODF.

At one point [time code 1:12:20], McKee lectured Secretary Kriss on how Microsoft's intellectual property is key to the company's revenue generation and tax payments and then asked Kriss "Are you talking about extinguishing IP rights?" Responded Kriss:

Of course not. Intellectual property is extremely important. But when it comes to this specific issue and the definition of a file format, you can always make the claim of intellectual property to the definition of a file format.  That is any corporation's or any individual's rights to do so..  It's just that that doesn't serve the needs of a sovereign state.  Here we have a true conflict between the notion of intellectual property and the notion of sovereignty.  I would say 100 percent of the time in a democracy, sovereignty trumps intellectual property. 

Massachusetts is currently ground zero for the soul searching Microsoft must do. If it capitulates, as it already has  to some extent on the license to its formats (thanks to Massachusetts), then the rest of the world gets to benefit from the new license terms.  In that respect, the license terms are more like a house of cards.  If the formats get opened (Massachusetts-style), then a piece of the footing on which the entire Office and Windows franchise stand will have crumbled and what happens next is anybody's guess.  At the same time, Microsoft's business model and tactics are being drawn into question. 

During the deliberations, Massachusetts officials also made it clear that the cost of sticking with Microsoft was a major pain point, citing how the next version of Office (to the best of their knowledge) will not run on Windows 2000 and they'll be forced to upgrade a bunch of operating systems too (the state has 80,000 employees).  With a format like ODF, back-level support -- even if the format matures -- won't be subject to the whims of a single vendor's decision.  That's what sovereignty is about.