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Halloween documents


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A brief article describing the events and the main facts concerning those secret documents circulating inside Microsoft about Linux and Open Source.

A brief article describing the events and the main facts concerning those secret documents circulating inside Microsoft about Linux and Open Source.

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  • 1. ENGLISH RESEARCH PAPERTHE HALLOWEENDOCUMENTS1998 – Microsoft Corporation compelled to admit the authenticityof some Confidential memoranda about the suppression of OpenSource Systems.Facts, consequences and main events about the documentswhich put Microsoft in a big pickle at the end of 90’s.Workgroup:- Andrea Tino- Mariacarmela Spada- Vincenzo Sofia- Cristian SantoroEXAM RESEARCH PAPERA.Y. 2006-2007UNICT – INGEGNERIA INFORMATICA
  • 2. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE IENGLISH RESEARCH PAPERCONTENT INDEXWHAT ARE THE HALLOWEEN DOCUMENTS· Microsoft Illegal economic strategies to suppress OSS (Pag. 1)· 1998 – Microsoft in a big pickle for many reports found (Pag. 1)· Discussing and analyzing facts and events (Pag. 1)· How we will talk about the Halloween Documents in this paper (Pag. 1)GENERAL INFORMATION ABOUT MICROSOFT· Brief history of Microsoft (Pag. 2)· The importance of Microsoft (Pag. 2)· Brief history from the foundation (Pag. 2)· Microsoft today (Pag. 2)· Microsoft’s internal structure (Pag. 2)· The Board of Directors (Pag. 3)· The Executive Team (Pag. 3)· The Corporate Staff Council (Pag. 4)ANALYSIS OF THE LINUX AND GNU-LINUX PHENOMENA· Most important considerations about Linux (Pag. 5)· Brief history (Pag. 5)· Linux in the beginning (Pag. 5)· Linux today (Pag. 6)· Main characteristics of Linux (Pag. 6)· A small but important consideration (Pag. 7)· GNU, GNU-Linux and Linux (Pag. 7)· An important difference (Pag. 7)· Introduction to the GNU system (Pag. 7)· Introduction to the GNU-Linux system (Pag. 7)INSIDE THE HALLOWEEN DOCUEMNTS OF THE MICROSOFT CORPORATION· Microsoft background near 1998 (Pag. 8)· Something to say first (Pag. 8)· Microsoft general situation before the Halloween Documents (Pag. 8)· Microsoft economic situation close to October 1998 (Pag. 8)· Inside Microsoft Halloween Documents (Pag. 9)· The finding of the first memos (Pag. 9)
  • 3. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE IIANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007· The original authors of the memoranda and all the people around them (Pag. 11)· Main content of the Halloween Documents (Pag. 12)· The main question (Pag. 12)· Halloween I (Pag. 12)· Halloween II (Pag. 14)· Microsoft’s response to Linux’s growth (Pag. 16)MICROSOFT’S REACTION TO THE HALLOWEEN DOCUMENTS AND THE MAIN CONSEQUENCESON THECOMPANY AND ITS POLICY· Interviews, comments, speeches and official positions of Microsoft towards the publicationof the Halloween Documents (Pag. 17)· The importance of reactions (Pag. 17)· Three months of “No Comment” (Pag. 17)· First comments and official positions (Pag. 18)· The official Microsoft spokesperson’s statements: Ed Muth (Pag. 18)· The main consequences of the Halloween Documents on Microsoft, its policy and Linux (Pag. 19)· Scandal and rumors (Pag. 19)· Microsoft’s policy (Pag. 20)· Linux’s reaction (Pag. 20)MICROSOFT’S ECONOMIC STRATEGIES INCLUDED IN TH HALLOWEEN DOCUMENTS· A general view of Microsoft’s strategies (Pag. 21)· A general vision (Pag. 21)· What kind of strategies (Pag. 21)· EEE – Embrace, Extend and Extinguish (Pag. 21)· Brief history (Pag. 21)· General working (Pag. 22)· FUD – Fear, Uncertainty and Doubt (Pag. 22)· Brief history from IBM (Pag. 22)· How it works (Pag. 23)· Phases of the FUD strategies actuated by Microsoft towards Linux from 1997 to 2001(Pag. 23)FINAL CONSIDERATIONS ABOUT THE HALLOWEEN DOCUMENTS AND GENERAL OPINIONS· Final considerations on the Halloween Docs in this paper (Pag. 25)· Why these were important (Pag. 25)· Final considerations (Pag. 25)· General opinions of the group (Pag. 26)· Looking now at what happened then (Pag. 26)
  • 4. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 1ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007WHAT ARE THE HALLOWEEN DOCUMENTS?Microsoft illegal economic strategies to suppress OSS1998 – Microsoft in a big pickle for many reports found.At the end of 1998 Microsoft went in the teeth of a very big cyclone.Halloween Documents is the name that is today used to referee to a series of Microsoft Corporationconfidential memoranda. During that time, these memoranda were written by some engineers of the well-known Company, and they are now famous because these documents related how to suppress thegrowth of Open Source Systems, with particular attention to some well known informatic technologies suchas GNU/Linux, UNIX and Netscape.The importance of the Halloween Docs: Halloween Documents were a very important event because theycontradicted the official Microsoft’s public pronouncements on the subject (OSS), and also the Microsoft’spublic policy about software production and worldwide competition with other firms.Discussing and analyzing facts and eventsHow we are going to talk about the Halloween Documents in this paper.In this paper we want to analyze what really happened during 1998 with particular interest in theconsequences and in Microsoft’s actions.Talking about the argument: We will talk about the Halloween Documents following a specific line ofthought. Our purpose is not to judge Microsoft’s actions or to define what was wrong or right. This paper’sonly purpose is to analyze the main events and the most important facts, in order to understand whatconsequences those events caused during then, and now.For this reason, we will focus on the elements which we consider among the most important and significant:· General information about Microsoft Corporation and OSS.· Most important facts and events about the core of the Halloween Documents.· General information about the economic strategies applied by Microsoft.· Most important consequences of the Halloween documents on Microsoft and its general internalpolicy.Opinions: Discussing the arguments, our purpose is also to express our considerations and opinions on theirconsequences at that time (1998 and later) and during the present. We deem that the HalloweenDocuments have been a really important event in the history of IT (Information Technology), so it isimpossible not to give some considerations on it.
  • 5. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 2ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007GENERAL INFORMATION ABOUT MICROSOFTBrief history of MicrosoftThe importance of Microsoft.In this part of the paper we will talk about Microsoft Corporation. This is necessary because the HalloweenDocuments concerns Microsoft in the first place.Microsoft, the full name is Microsoft Corporation, is today one of the most importantmultinational computer technology corporations in the world. It has a global annual revenueof 44,28 billion US$ and a total employees number equal to 71.553 spread in 102 countries(data upgraded to July 2006).The company is headquartered in Redmond, Washington, USA and its products are sold all over the world.Among Microsoft’s most famous software we can find: Office, Windows, Windows Server System and .NETFramework. At the moment Microsoft is hard working in order to release in January 2007 the new version ofWindows XP: Windows Vista.Brief history from the foundation.Microsoft’s name, originally bi-capitalized as MicroSoft or with hyphenation Micro-Soft, is a portmanteau of“Microcomputer Software” and it is often abbreviated as “MS”.The company was founded in Albuquerque, New Mexico, USA on April 4, 1975 by Bill Gates and Paul Allen.The company was not very famous after the foundation and for some years it has kept on remaining so.Microsoft begun to be a well known firm after the first important collaboration with IBM. Microsoft, in fact,produced the first computers which could be used by everyone, that’s to say the Personal Computers orPCs.The fast growth: The first Operating System by Microsoft was MS-DOS, it is still very famous, which has somesuccess after its release. Then the system grew very fast in several versions until Windows 3.0.Windows was the most important step for Microsoft’ growth because it was the first Operating System witha GUI (Graphic User Interface). Thanks to Windows 95 Microsoft verified good sales and starting from there,the company became very famous, even because the contract with IBM was over.Microsoft todayMicrosoft’s internal structure.All we know that Microsoft was founded by Bill Gates, even if not all know that Paul Allen founded thecompany too, and that he is still inside the company as an important executive figure. In order to betterunderstand the facts concerning the Halloween Documents, it is important to explain and describe howMicrosoft is organized internally.
  • 6. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 3ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Analyzing all Microsoft’s internal structure is too difficult and, for our purpose, useless; for this reason we aregoing to talk about the most important managerial structures: the Board of Directors, The Executive Teamand the Corporate Staff Council.These are, in ascending order of importance, the most important groups of people at Microsoft.The Board of Directors.The company is mainly run by a group of ten people: the directors of the company. These ten people, atthe moment, are (in order of importance): Steve Ballmer, James Cash Jr., Dina Dublon, Bill Gates, RaymondGilmartin, Ann Korologos, David Marquardt, Charles Noski, Helmut Panke and Jon Shirley.Election of the Board: The ten members are elected every year at the annual shareholders’ meeting; butsome of these cannot be elected, some of them are stable in the Board of Directors (like Bill Gates). Duringthe election, those who don’t get the majority of votes must submit a resignation to the Board, which willsubsequently choose whether or not to accept the resignation.Subdivisions: Inside the Board there are five committees which oversee more specific matters, theresubdivisions consist of:· The Audit Committee: It handles accounting issues including auditing and reporting.· The Compensation Committee: It approves compensations for the CEO and others employeesinside the company.· The Finance Committee: It handles mainly financial matters.· The Governance and Nominating Committee: It mainly oversees the activities during the reelectionof the Board.· The Antitrust Compliance Committee: This committee, really particular, oversees the actions of thecompany in order to approve or deny their actuation whether or not they suit the Antitrust marketlaws.The Executive Team.The Executive Team is another important body inside Microsoft. It is made up of sixteencompany officers across the globe. The team is charged with various duties includingmaking sure employees understand Microsoft’s policy and its culture for business.But the Executive team has many other tasks very important. These sixteen members can beconsidered as the head of the entire company, they decide about economical actions and operationand, besides, they are the main figures who can decide about the future of the company.
  • 7. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 4ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Members: The Executive team is made up of the most important people at Microsoft. In the first place,among these people, we can find the three CEO (Chief Executive Officer) of the three Microsoft’sworldwide economic areas: Middle East, Europe and Africa; but there are also other members:CEO: Inside a company there are some important figures, one of these is the CEO. This member can be consideredas the most important element in the company because he it is part of the Board of Directors and has many tasks. Inthis case, given that Microsoft has three geographic economic areas of sales, there is the necessity to have uniformlydistribute the executive power on the globe. For this reason in Microsoft there is a main CEO, but there are otherCEOs on the globe representing the various sales areas.· Chairman and CEO: Inside the Executive Team there is the most important elements of thecompany: the Chairperson and the CEO. We must underline that the CEO and the Chairman aretwo separate figures having different tasks and roles, but in our case, at Microsoft, we can find oneperson covering both positions: Bill Gates. Bill Gates is part of the Executive Team, he is Chairmanand CEO of Microsoft and he is also part of the Board of Directors.Bill Gates has always been the main figure inside Microsoft, but in the next years he is going toabandon his position at Microsoft to work full time at the Gates Foundation.· CSA – Chief Software Architect: This is another important figure in the company. The CSA overseesall the Software Development Team’s operations.· The General Counsel: Inside the Executive Team, during every Team Session, the General Counseloversees the operations of the members and the activities of the Team.The Corporate Staff Council.The Corporate Staff Council handles all major staff functions of the company, including approvingcorporate policies. The Council consists of many members; mainly it is made up of employees from the Lawand Corporate Affairs, Finance, Human Resources, Corporate Marketing and Advanced Strategies groupsat Microsoft. There are also some Executive Officers just like the Presidents and the Vice-Presidents of thevarious Product Divisions of the company.
  • 8. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 5ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007ANALISYS OF THE LINUX AND GNU-LINUX PHENOMENAMost important considerations about LinuxBrief history.“Linus Benedict Torvalds” is the name of the young student of the University of Helsinki, who started buildinga new Operating System which now we all know with the name of Linux.Linux from Minix: Torvalds, during those years, used a very particular system called “Minix” which wasdistributed with many facilitations to students and professors. Linus believed to be able to improve thesystem with new features, but he couldn’t do that because the system’s license didn’t allow any edit andits producer, a professor of the University of Amsterdam: A.S. Tenenbaum, rejected that changes too.So, Torvalds decided to start building its own system anew; the name “Linux” was attributed to it only later,nevertheless this name was not an idea of Torvalds, but of Ari Lamke who first rendered the systemavailable on the Internet. In particular, “Linux” was the name of the directory containing the core files ofthe system.Linux in the beginning.When Torvalds decided to build another system anew, he decided to program the Kernel using a GPLlicense (General Public License). This allowed every user to access the software and reprogram it.In the beginning Linux was just an emulator programmed in C and Assembly; slowly the kernel grew until itwas able to manage an entire system on its own.Kernel: An Operating System works thanks to the Kernel, that’s to say a particular software which can be consideredthe core of an OS. The kernel in fact manage the data stream of the system and in it there are the most importantprogramming structures that let the system work.GPL License: Every software is sold with a license, it is the permission of using that particular software. Normally alicense also establish how the user can use the software. A GPL License allow every kind of operation.C: C is a programming language very common and also one o the most popular. Almost every system today has alot of components programmed in C or in C++ and C#, which are other languages based on C.Assembly: As C, Assembly is another programming language among the most common and popular. Today it is usedfor OS and satellite systems.In October 1991 Torvalds released the first version of Linux: Linux 0.02, but it didn’t have much successbecause it was a very simple system which could work only on Minix (because Linux 0.02 used the Minix FileSystem). But going on with time Linux grew and overtook Minix until it became a complex OS with all therequested features. When Linux reached this level, Torvalds decided to reprogram Linux in order to beinstalled also on other systems, in particular onto the GNU platform.
  • 9. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 6ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Linux today.After the first steps, Linux grew and the kernel programmed and always improved by Torvalds, reachedhigh power and functionality levels.We must remember that Linux is not an Operating System, it is in fact only a kernel structure which Torvaldskeeps on reprogramming everytime in order to improve its capacities and functions. In 1996 Torvalds chosethe penguin as official Linux’s mark, its name is “TUX” which signify “Torvalds Uni X…”. At the moment,thanks to the possibility to access the programming structures of Linux, this kernel is the most favorite in theworld by programmers and software developers.Main characteristics of Linux.The kernel of Torvalds has a lot of functionalities and has several aspects which renders it unique:· Multitasking management: Today every kernel supports multitasking, that’s to say the possibility todo several actions at the same time, and Linux supports it.· Multi-user management: Linux is able to manage more than one user in the system.· Multi-platform management: Linux is able to manage more platform installed on the computer.· RAM exclusive protection: Linux manage the RAM memory of the computer so that every programhas its own memory space which doesn’t interfere with programs’ other.· Memory sharing: On the contrary, Linux can also manage an open sharing RAM memory forseveral applications which can use the same data, stored in the same storage area.· Availability of the source code: The core of Linux, that’s to say, the source files containing theprogramming structures of the kernel, is available for edits by the user.· File System: Linux has a particular File System called UMSDOS.· Modularization: Linux can be expanded by adding other modules to its standard structure.Linux, in the end, has also several advantages in comparison with other OS in the IT market, but also someweaknesses, here is a brie list of its main advantages and disadvantages:· License cost: Surely one of the most powerful advantages of Linux is its license’s cost which iscompletely free.· System stability: Linux is a very stable structure, it is very difficult that Linux goes on crash and if itdoes, the problem must be searched in the hardware configuration.
  • 10. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 7ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007· Software limits: Linux, nevertheless, has several problems of software integration. In fact, not manyapplications today are built for Linux and this takes a lot of problem for a user who needs someprograms that cannot be installed on its computer..A small but important consideration.We have said that Linux is not an Operating System but just a Kernel structure. In spite of this we have saidsometimes that Linux could be considered as a system anyway. Then, what is it all about? The truth is thatLinux is a Kernel but in our times it is incorrect not to consider it as a system too. Today Linux works as asystem and as a Kernel too.GNU, GNU-Linux and LinuxAn important difference.Understanding the history of Linux is important in order to understand what happened in the HalloweenDocuments matter. But now we want to spend a minute to describe a little difference between threetechnologies that are confused one with each other.Introduction to the GNU system.GNU is an Operating system launched in 1983 by Richard Stallman, its main purpose was to build a systemcompletely free. To do that many applications and programming structures were created in order to coverthe most the needs of the user but, even today, GNU still needs to be improved. To renders the system freefor the users, Stallman endowed it with a GPL license.Introduction to the GNU-Linux system.The project of Stallman was great if we consider the time, but with years, Stallman realized that GNUneeded several changes in order to better serve the needs of the users. For this reason, the GNU systemand the Linux kernel were combined together.We are now talking about GNU-Linux which is a different system in comparison with GNU only. In fact thekernel of Linux rendered the GNU system more stable and endowed it with a higher complexity level.Thanks to these new characteristics, the GNU-Linux system was able to support more technologies and alsomany other applications.Main architecture: GNU-Linux is today used by many people and companies. In fact we must not forgetthat all the system has a GPL license. Furthermore, Gnu-Linux combines the advantages of Linux with thepower of GNU. GNU maintains its functionalities, but the new kernel, Linux, gives it more stability and othersignificant aspects. One of the most important to underline is surely the difference between User-Spaceand Kernel-Space.In a GNU-Linux system, the processes of the system, GNU, are executed separately from the kernel’s ones.This is another factor of major stability.
  • 11. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 8ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007INSIDE THE HALLOWEEN DOCUMENTS OF MICROSOFTCORPORATIONMicrosoft background around 1998Something to say first.Before talking about the core of the Halloween Documents and what happened during that time, we mustfirst talk a little bit about the Microsoft general situation until 1998; it is necessary in order to understand aswell as possible what happened later (the beginning of all the story).Microsoft general situation before the Halloween Documents.Microsoft’s new step: Around 1998 Microsoft finished building one of its most famous Operating Systems:Windows 98. During that period, Microsoft was about to take a very crucial step in the world of computersand software, because this new Operating System was supposed to change the vision of IT (InformaticTechnologies) in the world.The new system built by Microsoft had a lot more new features if compared to Windows 95; we also mustnot forget that, in those years Internet was growing up and Microsoft also finished building its browser:Internet Explorer. In short, 1998 was a very intense year for Microsoft which had to face the new market withnew products.A new threat: So, in a situation of general alert, Microsoft had to find out everything which could representa minimal threat, in order to take the suitable countermeasures; this behavior in economy is completelynormal for a company which is launching a new product on the market, it is in fact an ordinary aspect ofcompetition. And just in those years Microsoft found a potential threat: Open Source Systems.OSS represented a very big problem for Microsoft because they could be an obstacle for its products in themarket (We have talked about OSS before so now it is possible to understand why Microsoft did really careabout them).Microsoft economic situation close to October 1998.So, as we can see, 1998 was a really important year for Microsoft. Now we want to take a look atMicrosoft’s general economic situation, during the months when Windows 98 was released, within otherproducts (Office 97, Internet Explorer etc.).Windows sales: After Microsoft released the new version of Windows: Windows 98, the company verified alarge increase of sales all over the world. Windows, after few months from the presentation, was the bestOS (Operating System) sold, although the system still had many problems and bugs (solved in more thanone year, with the release of the first service packs and security updates).Office sales: Also Office 97, when presented (before Windows 98, that’s to say in 1997), experienced goodsales. Most of the users who had older versions of the suite, migrated to the latest one, in few months.
  • 12. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 9ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Internet market: The only problem was the Internet development. Microsoft, in fact, was one of thosecompanies that missed the first years of the “Internet Boom” at the beginning of 1990. But the companywas able to access the market thanks to ActiveX technology and COM (Microsoft Component ObjectModel).Active X: Active X is a particular Microsoft technology released in 1996 as an upgrade of the old OLE (anothertechnology which can be considered as the parent of Active X). Active X is used to build media content for webpages; it is, I short, a technology for the web.COM: Microsoft Component Object model is a special platform for software componentry introduced by theCompany in 1993. This platform can be used to enable interprocess communications and dynamic object creationin any programming language that supports the same technology. The innovation of COM is to allow every user tobuild programs which can be run on every Windows platform.At the end, in 1995, Microsoft launched its own network: MSN, Microsoft Network as a major point of accessfor Microsoft users.We can see at the end, how Microsoft’s economic situation was really good during 1998 and before. This isimportant now to understand what happened later.Inside Microsoft Halloween DocumentsThe finding of the first memos.Now, it is the moment to really talk about the main argument of this paper. Until now wehave in fact dealt with other arguments concerning general aspects of Microsoft and OSS, inorder to better understand those series of events which affected Microsoft in 1998 and thatare commonly known as Halloween Documents.Steven Raymond: Everything begins on October 1998, when a confidential memorandum from Redmondwas leaked to Eric Steven Raymond (the picture beside).Redmond: Redmond is a city located in the state of Washington (USA). It is a famous place because it housesMicrosoft’s international office. So sometimes it is possible to refer to Microsoft Corp. using the name of this city.E. S. Raymond: Steven Raymond is a well-known figure inside the computing world. He was born on December 1957 inMassachusetts but now he lives in Pennsylvania. At the moment, he is one of the most famous hackers all over theworld. During the last years he has written several books about OSS and other technologies. He is also knownbecause he developed several applications and contributed to build others among which there are some GNUlibraries. Inside the Halloween Documents events, he was deeply connected with all the happenings during thattime.The memorandum which Raymond had in his hands was marked “Microsoft Confidential”, and containedmuch information about Microsoft’s strategies against OSS and Linux. The source through which Raymondobtained that document is still nameless, and for much time it was thought there was a mole insideMicrosoft’s hierarchy.
  • 13. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 10ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007However, after few days Raymond published the entire document (with some comments of his) on hispersonal website. It took just few hours, and suddenly the memorandum was divulged all over the world.SOURCES OF THE HALLOWEEN I AND I IIt is very important to underline a significant fact: Raymond, after the publication of the documents on theInternet, officially affirmed that the sources of the memoranda were three, but that these three sources were notamong those people who wrote the memoranda; that’s to say all those ones who were directly involved in thedocuments inside Microsoft (the authors or people who ordered the documents).Raymond also affirmed that he knew those sources.Halloween I and II: After this first event, the publication of the Microsoft memorandum, things didn’t stop. Infact, only a few days later, another Microsoft confidential memorandum was leaked to Raymond. Thisdocument contained other important information about Microsoft competitors and in particular, in thememo, some special strategies against Linux were explained.This further document wasn’t really a surprise, because in the first memorandum there were somereferences about a second eventual file. Raymond, who published and commented this one too, on hiswebsite, said that the second file was leaked by two different sources (nameless too).It is now that Raymond gave the name of “Halloween Documents” to the memos leaked to him.Halloween Documents: Raymond called the memoranda with this name just because of the period: it was Halloweenand it might have been a good idea to call the documents like this.Halloween III and all the others: Within days, Raymond collected another memorandum from anothernameless source and also published other documents written by himself, until they became a large series.At the end the complete series included eleven files:· Halloween I, II and III: These are the first Halloween Docs written by Microsoft and also the mostfamous. Raymond commented and published them on his website.· Halloween IV and V: These memos are probably the most discredited among the Halloween Docs,because their content consists just in a parody of the first two memos (even if a part of HalloweenV deals with an important argument).· Halloween VI: Number six was written by Raymond and it is just a response from him to a Microsoftgroup.· Halloween VII, VIII and X: This documents are a summary about costs, statistics and sales anddamage-control strategies of Microsoft. They contain some original parts from Microsoft and otherparts edited by Raymond.· Halloween IX: Number nine consists in another satire on Microsoft by Raymond.· Halloween XI: This document is a response from Raymond to a campaign by Microsoft called “Getthe facts” on negative marketing against Linux.
  • 14. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 11ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007The publication: Before talking about the authors of the documents, we want to focus on a particular thing:“Why didn’t Raymond publish the original uncommented version of the memos?”. The answer is simple butimportant. Raymond said in his web site, to those ones who requested him a copy of the original files, thathe couldn’t publish an uncommented version of the Halloween Docs.The reason is almost legal; in fact if Raymond had published the original version of the memos thenMicrosoft would have been able to sue him for damages.We consider this to be a very important fact because just for this reason Microsoft couldn’t touch Raymondat all. Raymond in fact never had to defend himself from an eventual Microsoft legal action against him,even if the documents published were confidential and property of the Microsoft Corporation.The original authors of the memoranda and all the people around them.It is evident how most of the Halloween Documents are not “completely original”. In fact the first threememos are, physically, documents written by people inside Microsoft’s hierarchy, while the others are justpublications of Raymond about the first three Halloween Docs or other aspects of Microsoft.It is for this reason that we will take only the first three documents into consideration.We know that the documents came to Raymond were memoranda written by “someone” inside Microsoft.Now we are going to talk about who, physically, wrote the memos now known as Halloween Docs andwho got involved in them.Vinod Valloppillil: The main author, main because the memoranda were written by morethan one person, of the Halloween Documents is Vinod Valloppillil. During 1998 Valloppillilworked as an engineer, in particular as a Program Manager (PM), for Microsoft in the ProxyServer and Windows NT team, and during the summer of that year he was asked byMicrosoft Executive James Allchin to write several memos for Executive Paul Maritz, in orderto discuss potential strategies for combating OSS and Linux.Program Manager (PM): A Program Manager, or PM, in a software company or in a research group, is an engineer ora qualified person assigned to coordinating the interactions between development groups. Usually in adevelopment group, the PMs coordinate several tasks and manage the general work.As it is possible to see, Valloppillil was not part of Microsoft management, the reports were in fact asked byan executive. However during the events concerning the Halloween Docs, Valloppillil was surely in themiddle of attention, but the files were just true economic analyses. Now Valloppillil works for Microsoft nolonger.Josh Cohen: The first three, original, Halloween Documents were written by Vinod Valloppillil and JoshCohen. There is not much information about Cohen, but, although his name appears on the documentsamong the authors, his influence on them was almost irrelevant, because he just helped Valloppillil to writethem.
  • 15. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 12ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007James Allchin: James Allchin was one the most important people involved in the HalloweenDocuments events. His high position inside Microsoft’s hierarchy (he was a senior executive)caused him several problems after Raymond published the memos. In fact, as we saidbefore, it was Allchin who asked Valloppillil to write those memos.But this is not the first time that Allchin got involved into a problematic situation; in fact healso had to testify in some trials against Microsoft. He was dismissed from Microsoft on September 29th 1999.Paul Maritz: Maritz was a senior executive of Microsoft from 1986 to 2000, and he wasinvolved in Halloween Documents too. His importance is not very relevant, but the memoswritten by Valloppillil were just for him. For this reasons, he was one of the Microsoft’sexecutives to be investigated. We mustn’t forget that Microsoft, for several months, tried tofind the mole inside the company who leaked the confidential files.Maritz retired from Microsoft in September 1999 at the top of his career inside the company, for, he said,personal reasons.Analyzing how these men were involved in the Halloween Docs matter, it is possible to understand howtheir positions inside the company put them into a pickle; this happened for two reasons: first of all, Linuxand all the other firms mentioned in the memoranda tried to take Microsoft to court, and meanwhile,Microsoft tried to discover the mole inside the company who leaked the confidential documents toRaymond.Someone says it was not a chance that most of the people involved in the Halloween Documents weredismissed from the company. Nevertheless, it is impossible to know what happened inside Microsoft duringthose years, surely many things changed and the company had to take timely countermeasures.Main content of the Halloween DocumentsThe main question.The question we want to give an answer to now is: “Why were the Halloween Documents so harmful forMicrosoft?”.The answer in some parts is simple but there are other aspects of the entire matter which must beconsidered. So to understand the threat that these files represented to Microsoft, it is necessary to know, ingeneral, the content.Halloween I.The main content: The Halloween I is surely the most famous document published by Raymond; but its fameis due to its embarrassing content for Microsoft.We mustn’t remember that the document consists in a confidential memorandum written for a Microsoftexecutive in order to analyze the market and the possible threats for the company’s products; for thisreason the file must be analyzed by topic.
  • 16. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 13ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Halloween I basically dealt with the most dangerous threats that Microsoft’s new products might face inthe market. In the document, in fact, Valloppillil documented how Open Source Software and Systemscould be dangerous for Microsoft, because they had several strengths that Microsoft’s products had not.Furthermore, Valloppillil deduced that Linux represented surely one of the greatest threat to Windows 98and that it was better to take adapt countermeasures.These affirmations demonstrated that Microsoft was really scared about OSS. And basically for this reasonthe first Halloween Document was so embarrassing for Microsoft, because the company, during severalinterviews, affirmed that OSS were not better than its own products and that, for this reason, Microsoftdidn’t fear competition with them. But as it is possible to see, the first memorandum showed somethingcompletely different that contradicted the company’s official version.Threats: Inside this memo, Valloppillil, besides providing a list of the most dangerous threats, explainedseveral possible strategies to actuate, in order to maintain Microsoft’s top position on software and OS salesin the market.The list of these potentially dangerous software included these ones (to be noticed: for every item aredescribed its strengths, its weaknesses and the best strategy to beat it):· Linux: The first threat identified by Valloppillil was GNU Linux, an operating system now famousamong the OSS. Valloppillil deemed, in fact, that Linux could really represent a danger forWindows, because one of its strengths was the capacity to support SMP, virtual memories and themost used platforms (x86, alpha, PowerPC, SPARC etc.).· Netscape: Another dangerous company was Netscape (now Netscape exists no more). In fact itsweb browser: Netscape Navigator, was one of the most competitive products within InternetExplorer. Valloppillil listed a series of weaknesses in order to combat the software.· Apache: Valloppillil also found out Apache as a threat for Microsoft. Apache in fact producestoday one of the best server user-manager platform and during 1998 Apache Server software wasgrowing fast.As we said before, inside the threat description, Valloppillil also added a lot of information about thesoftware’s history, strengths, weaknesses and defeating strategies. For this reason this part of the documentin particular was very embarrassing for Microsoft.Licensing systems: In the end the final argument dealt with by the Halloween I, was the licensing systems ofthe other companies, competitors of Microsoft.Licensing system: Every company which produces software, operating systems, applications, informatic platforms orsomething similar, sells these products using a particular licensing systems; that’s to say the way of managing thepermissions of using one of its products.So it is possible imagine the license just like a permission. A company in fact produces a software; the user, to use thatsoftware, must buy a license, an authorization which enables him to use the product for a specific range of time.
  • 17. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 14ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007There are many kinds of license. For example, what makes OSS really different form every other kind of applicationsor software in general, is exactly the license: licenses for OSS are free.Surely, in fact, one of the most dangerous aspects of OSS for Microsoft was, and is at present too, thelicensing system. Every Microsoft’s product has several types of licenses, but they all have a cost, while OSSones are completely free.So Halloween I described how to eventually change the Microsoft licensing system in order to combat theOSS’ ones; this aspect was really dealt with by Valloppillil who added in the threat list also a description ofthe licensing system of every company.Halloween II.The main content: While Halloween I mainly deals with some particular applications among OSS, HalloweenII is really more centered on one technology only. In fact Valloppillil, in Halloween II, made a carefulanalysis about Linux. Inside this document it is possible to read a lot of information about variouscharacteristics of Linux and some of its components.Linux: So, as we can see, Halloween II is completely dedicated to Linux, Operating System identified byMicrosoft as a threat among its competitors, and this memorandum deals with a lot of aspects of the mostfamous OSS in the world (during 1998 of course). In order to understand how deep was the analysis ofValloppillil on this argument, we are going to see what Halloween II reported on Linux.The memorandum dealt with all the aspects of Linux as Operating System, as OSS, as competitor and aspotential threat for Microsoft; everyone of these items was discussed with a wide range of statistics andinformation. The aspects of Linux analyzed in the document are many, so we are going to make a list of themost important:Note: all the information reported in the document, Linux’s organization, economic situation, most important factsetc. refers to 1998.· Linux’s growth: The first part of the document deals with the most important parts of the history ofLinux, how it started and how it grew. Finally there is also a description of its organization.· Technical analysis (part 1): The technical analysis is divided in two parts. The first one deals with themain structure of Linux (Operating System). Inside this section Valloppillil described a lot of coreaspects of the software just like:· Kernel and GPL structure.· System internal libraries and Applications.· Main development tools.· Data stream management.
  • 18. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 15ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007· Commercial aspects: The commercial analysis concerns a description of the Linux OperatingSystem distribution with particular attention to its versions (each one analyzed and commented):· Linux RedHat.· Linux Caldera.· Technical analysis (part 2): The second part of the technical analysis concerns all the main featuresof the Operating System, user-side. In fact, while the first part dealt with the programming aspectsof the Operating System (all those aspects that a software programmer can analyze), this partdeals with the system features available to the user who decides to install Linux:· User Interface (GUI).· Networking.· Applications.· Operating System installation.· Main performances and tools.· Linux on client-side and on server-side: One of the most interesting parts of Halloween II is theclient-server side system analysis. Here Valloppillil analyzed the main weaknesses and strengths ofLinux when it is installed onto a server or onto a client. In this part of the document, in fact,Windows Server is compared with Linux on the server and Windows for ordinary users is alsocompared with Linux’s versions on the client.Server and client: When Internet developed fast and when Microsoft Windows 98 was first released, serverand client concepts became a milestone in Informatics. An Operating System has different characteristicsand purposes depending on where it is installed. In fact when a system is installed on a client, that’s to say anormal computer, it must satisfy the needs of an ordinary user. But when the system must satisfy the needs ofa server, everything changes because a server is a special computer connected to a network (manycomputers) and all the computers connected to it must be managed (because that’s the purpose of aserver). A server manages the clients’ accesses (every computer connected to a server is a client) and a lotof other services. That’s why a Server Operating System is endowed with something more than a normalClient Operating System.· Forecasts: In the last part of the memorandum Valloppillil finishes with his analysis and begins withsome forecasts about Linux, in order to try to anticipate the results of the situation discussed andanalyzed by himself. These forecasts are just a conclusion of the entire discussion made during thedocument.· Linux competitive analysis: The final part of Halloween II is a complete analysis of the totalcompetitive level of Linux. Here Valloppillil makes several comparisons between Microsoft andLinux in a wide range of aspects, concluding that Linux must be treated as a real threat.
  • 19. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 16ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Well, it’s possible to see how Halloween II contains the “core” of the Halloween Documents. When thedocuments were published by Raymond, Halloween II was one of the most read documents.Microsoft’s response to Linux’s growth.Final part of Halloween II: However, “Linux competitive analysis” is not the final part of Halloween II. In factthe document finishes with a very important chapter titled: “Next steps and Microsoft response”. In thisspecial chapter, Valloppillil takes into consideration the main aspects which make Linux’s products betterthan Microsoft’s ones. In this further analysis it is possible to see a lot of information concerning economicand programming aspects of Linux.Process vulnerabilities: The main argument in this section is surely “Process vulnerabilities”. Here Valloppillilexaminates the main strengths of Linux and suggests what kind of strategies Microsoft could adopt in orderto improve the quality of its products.Beating UNIX: In the end the final paragraph is “Beat UNIX” . In this part Valloppillil takes a list of the mainstrategies adoptable by Microsoft, in order to beat UNIX and Linux in the Market.UNIX: We introduce now another system strictly connected with Linux: UNIX. UNIX is an Operating System, itspeculiarity is to have been the very first Operating system. In fact every other system we know was built from thisparticular system. The main differences between UNIX and all the other systems is that UNIX is a system without a userinterface which works without windows, like Windows or Linux or Macintosh. This doesn’t mean that UNIX is nowobsolete, on the contrary it is one of the most used systems in the world. Given that UNIX hasn’t got a user interface(GUI), this renders the system light and very fast. A lot of networks are managed with UNIX systems and thesenetworks are very robust and efficient. Linux is deeply connected to UNIX as it is the only system which maintains a lotof connections with it. Many internal parts of the Linux’s software is programmed with UNIX components and libraries,and, besides, UNIX and Linux are OSS together.These strategies are, above all, about the general Linux’s success, strongly connected with UNIX market.The main aspects of UNIX to beat, found out by Valloppillil were:· DNS integration with directory: A characteristic which renders the UNIX system endowed withupgrades, security and authentication services.· HTTP-DAV: This is a particular protocol, very complex, which provides the system with an infinitelevel of complexity for various applications.· Structured storage: UNIX storage system has different properties in comparison with the storagesystems of other Operating Systems. It has different rules and different advantages.· Customization: UNIX, being an OSS, can be reprogrammed as the user wishes.
  • 20. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 17ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007MICROSOFT’S REACTION TO THE HALLOWEEN DOCUMENTS ANDMAIN CONSEQUENCES ON THE COMPANY AND ITS POLICYInterviews, comments, speeches and official positions of Microsofttowards the publication of the Halloween DocumentsThe importance of reactions.Analyzing and talking about the Halloween Documents’ content, it is now possible to see howcompromising these memoranda were, knowing that they were leaked and published on the Internetwithout the company’s knowing it. In fact what happened later was very important both for Microsoft’sreaction, the press’ releases and public opinion changes.Reactions analysis, so, is important. For this reason in this part of the paper we are going to deal with themain events which affected Microsoft from November 1998 to February 1999.Three months of “No Comment”.A three months hole: We have talked about reactions from Microsoft, but Microsoft preferred to set up a“No Comment” wall rather than releasing comments or official positions on the argument. Public opinionwas strongly affected by the publication of the memoranda by Raymond and the press, TV news andnewspapers, have talked about that for months.Confirming the rumors: This hole in Which Microsoft got itself, had as its main and most importantconsequence, the confirmation of all the rumors about Microsoft’s illegal competition towards Linux andOSS. As we said in the first pages, we have seen how Microsoft passed trough a lot of trials and happeningsjust because of its possible monopoly on IT (Information Technology) and all that happened with theAntitrust authorities.That’s why, during December 1998, Microsoft was at the center of attention. For many aspects, theHalloween Documents were just what everybody was waiting for: a confirmation of the illegal operationsperformed by Microsoft in order to maintain its monopoly. Surely these three months of silence didn’t putMicrosoft in a better position.Not a complete silence: Although Microsoft issued no comments, the company had to give a sort of officialposition on the argument. As it is possible to suppose, the company’s official channels, during the first days,released statements and articles, where Microsoft neither denied nor confirmed the authenticity of thememoranda published on the Internet by Raymond, but just admitted that inside the company, someconfidential documents were leaked by an “internal source”. For the rest, in spite of the continuousrequests by the press to issue interviews and other information about the company’s official position on theHalloween Documents, Microsoft did never say nothing.
  • 21. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 18ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Direct questions: At the end, it is important to underline not only the general behavior of the company, butalso the individual behavior of every Microsoft manager and officer towards these happenings. Duringthese three months of utter silence, a lot of journalists tried to have some statements or positions from manyimportant members of the company. When asked about the Halloween Documents, everyone of themalways refused to give any information or statement and, sometimes, there were episodes of violencebetween journalists and managers. It is also a common rumor that Microsoft Call Center and MicrosoftOffice for Public Relations collapsed during those months.First comments and official positions.January 1999: After almost three months, Microsoft finally released the first comments and issued alsoseveral interviews in order to make up for the blank, left from October to January (1998 - 1999). But whatwere the statements issued by the company and what was its main position regarding the HalloweenDocuments?Beginning to talk about it: So after only three months later, Microsoft itself decided to talk about theargument. In fact, it was impossible for the company to keep on maintaining the “No Comments” officialposition.And in order to establish Microsoft’s official statements on the Halloween Documents, many managers andofficers of the company had several interviewing sessions in January and February (1999).Microsoft’s official position: During all the interviews and all the Q & A Sessions, every Microsoft’s managerand officer released the same kind of answers. Microsoft’s official position was just one: Microsoftconsidered Linux and OSS in general, like competitors in the IT market and every analysis of them,concerning every aspect, was performed in order to improve the quality of Microsoft’s products.The official Microsoft spokesperson’s statements: Ed Muth.An important Q & A: In order to see what were the official Microsoft statements on theHalloween Documents, it is important to have a look at an important Q & A Session taken byMicrosoft’s Enterprise Marketing Group Manager Ed Muth during January 1999. This interviewis very important because Muth was the most important people who every journalist tried toreach in those months. This special Q & A Session was also published on Microsoft’s websiteand it is available even today.The session: We are going now to see the most important questions and answers of Muth during thatinterview:· Are the Halloween Documents posted by Raymond genuine? To this question, a core question,Muth answered by saying that Microsoft never performed a line-for-line review of thosedocuments, but surely those ones appeared to be official Microsoft memoranda sent internally inthe company.
  • 22. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 19ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007· What was the purpose of creating these documents? Muth said that at Microsoft it is standardpractice to write and research about the most important competitors. Microsoft would do adisservice to its shareholders if it didn’t monitor market conditions.Furthermore, the memoranda written by Valloppillil were intended to stimulate an internaldiscussion about OSS and Linux.· Is this an official response to the Open Source Model and Linux? The first word pronounced by Muthwas “NO!”. Muth in fact explained that the internal memoranda leaked were just a market analysisby an internal engineer.· Who is Vinod Valloppillil and what his role at Microsoft? Here, Muth explained how Valloppillil wasan internal engineer and how his role was just to analyze the market in order to perform deepresearches about the most important competitors. Muth also finished saying that Valloppillil wasnot an official spokesperson.· Does Microsoft consider Linux a competitor? Muth answered “Yes!”. Microsoft consider Linux as animportant competitor. Furthermore, Muth also said that every action performed by Microsoft waspart of the ordinary operations that a company must take in such a robust and competitive marketlike IT.· How did these documents get leaked to the press? Here, Muth explained how Microsoft couldn’tconfirm how the documents were distributed outside the company and who was the directresponsible for this.· The first document talked about extending standard protocols as a way to “deny OSS projectsentry into the market”. What does this mean? As it is possible to see, this is surely one of the mostimportant and embarrassing questions for Muth. To this question Muth answered by saying thatMicrosoft needs to develop and build more innovative standard protocols, with new features andtools for the users. This leads to the inevitable possibility of redefining a new standard. Microsoft, forthis reason, acts in order to better serve its customers, that’s why raising the standard level was aneed for Microsoft and also a consequence for Linux’s users.Muth’s answer to the final question was not good or complete. That’s why there is a common rumor abouthow Microsoft could repair damages about the purpose of the documents but not about the statementson Linux included into them.The main consequences of the Halloween Documents on Microsoft, itspolicy and LinuxScandal and rumors.After talking about Microsoft’s response to the Halloween Documents, it is, at the end, very importanttalking about what was the general reaction of the public and of all the other companies in the IT market.
  • 23. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 20ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007Rumors during November and December 1998: After the publication of the documents by Raymond, as wesaid during the last pages, Microsoft was in the eye of a great storm: journalists, the press, newspapers,tabloids and media always talked about the memoranda. The reason is simple: the events happenedduring those months could be, at the eyes of the peoples, just a confirmation of what Microsoft has alwaysbeen accused for years: its boundless, and illegal, monopoly on IT and OS market. Surely this can beconsidered as one of the most immediate reactions.Microsoft’s policy.However, the most important thing is what changed in Microsoft’s policy towards its costumers and theother companies, competitors or not.Well, it is impossible to describe Microsoft’s reactions to the Halloween Documents in terms of behaviortowards its costumers, because there are no physical evidences of this. In fact Microsoft never releasedpublic statements about an eventual change of its “behavior”. We can just report how Microsoft reactedduring those months in comparison with the past time.So, Microsoft didn’t really change what we are calling its “behavior” towards the customers, in fact, itremained almost the same. But surely what changed deeply, are the relationships of Microsoft with othercompanies, just like competitors and allies.Here, in fact, many things changed: on a side, competitors and a lot of other companies in the IT marketembittered the controversy about Microsoft’s monopoly and, some of them, denounced the company ofBill Gates, even if without results. Instead, on the other side, Microsoft’s alliances changed as its allies; this issomething that happens when a company pass through such intense and difficult happenings, and inorder to reconstitute the general structure, it has to redefine its allies.Linux’s reaction.But what really matters is just Linux’s reactions to the Halloween Documents. If these documents affectedMicrosoft so much in economic, financial and credibility terms; how deep was Linux affected?What happened to Linux is something really interesting and ironic. The well known OSS in fact, after thepublication of the Halloween Documents by Raymond, verified a large increase of the selling and a lot ofpublicity. But what is really marvelous is that Linux, instead of not considering what was written on theMicrosoft’s memoranda, used the Valloppillil’s analysis’s to improve the quality of the system. After fewmonths, in fact, Linux changed several things in the Operating System and the corrections applied took thestarting point just from the weaknesses of the system reported in Halloween II.Summarizing, Linux used the Halloween Documents as a tool to improve the quality of the system. In theend, it seems that these Microsoft’s memoranda, at the beginning finalized to outline a strategy to defeatLinux, instead helped Linux itself. For this reason, the Halloween Documents were considered an ironicevent for Microsoft.
  • 24. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 21ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007MICROSOFT’S ECONOMIC STRATEGIES INCLUDED IN THEHALLOWEEN DOCUMENTSGeneral view of Microsoft’s strategiesA general vision.As it has been possible to see during these pages, Microsoft wanted to adopt some particular strategies inorder to succeed in the market ant to stop the Linux’s growth. With the publication of the memoranda,containing these strategies, it was impossible for Microsoft to realize these ones, so they remained just on apiece of paper, never actuated for real.We are going now to talk about tight these very important strategies that, we remember, was the maincause of embarrassing for Microsoft when the documents were published by Raymond.What kind of strategies.But what were these strategies?Microsoft is a well known company which has always succeeded in the market thanks to its notoriousness,the quality of its products and even its publicity (which is always an important element in the IT market).As we said before, the company has always actuated several strategies in the market and these strategies(some of them included in the Valloppillil’s researches in the Halloween Documents) were sometimesjudged as unethical, anticompetitive and wrong by the general opinion; the reason? Surely because of themethods used or outlined. In fact some of the strategies had as purpose, the suppression of severalcompanies classified by Microsoft as competitors, and they provided the using of particular actions in orderto make these companies fail.EEE – Embrace Extend and ExtinguishBrief history.One of the most important strategies included in the Halloween Documents, in the analysis of Valloppillil, isthe Embrace Extend and Extinguish known also as EEE. This particular strategy was just used by Microsoftand it is very important to explain it, as most clear as possible.Embrace and Extend: As we said before this strategy was used by Microsoft and, how it is possible to see bythe name, it sounds something ironic. In fact the strategy used by Microsoft was first called Embrace andExtend (without “Extinguish”) because a company’s executive officer, during an interview, said thatMicrosoft was about to Embrace the standards in order to extend them later; this affirmation, after a fewtime, was taken by the critics and modified adding the word “Extinguish” to make some irony on theMicrosoft’s monopoly.
  • 25. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 22ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007General working.What does it consist in: So this strategy is used very often in the IT market because it is connected with thesoftware sharing and selling market. It consists in a long term series of procedures which a companyactuates in order to establish the superiority of its products on the others. It can be summarized with threemain steps:· Embrace: The firm makes known that it wants to support a specific standard for its own products. Sothe firm takes contact with the producer of that standard in order to define the support protocolsor similarities.· Extend: After having supported the standard in exam, the firm begins building and distributing newapplications with new extensions, not prevented, which doesn’t support the standard.· Extinguish: When the first two phases success, the firm is ready to end the strategy. In fact,distributing programs which doesn’t support the standard, even if there is a contract for supportingit, the firm weaken the producer of that standard because its customers (of the firm) areaccustomed in not using the application which loses users and positions in the market. At this pointthe producer is compelled to abandon the market because its own applications are no morestandards.It is important to underline another aspect of this strategy. In fact it is generally actuated also in theInternet-targeted applications because of the Network effect. In fact, the more a program or a technologyis diffused, the more it is used by the users. This amplifies the effects of the EEE in terms of time andeffectiveness.FUD – Fear Uncertainty and DoubtBrief history from IBM.There is another strategy in the Halloween Documents mentioned and even commented by Raymond inhis web site where he published the memoranda; this strategy is very important and it has been actuatedin a lot of situations by several companies and firms. Its name is Fear Uncertainty and Doubt known alsowith the abbreviation FUD.Starting from IBM: The FUD has a very long history, in the IT world it was associated for the first time to the IBMwhich was the first company to actuate such a particular strategy in 1970.IBM: The International Business Machines is a famous American company founded in 1914 in the USA. It is one of thefirst companies in the world of Informatic. Now it is one of the most important firms in the IT market; it producers, buildsand distributes software and computers all over the world.The term FUD was also used for the first time right by IBM ex-director Gene Amdahl. He called “FUD” thatstrategy used until that time by the IBM in order to discredit the competitors in the market giving rise to
  • 26. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 23ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007rumors about the low level quality of their products.After that event, even now, this term is generally used for referring to every kind of misinformation as acompetitive weapon.How it works.General meaning: FUD is a particular marketing strategy actuated by a company when a competitorlaunches in the same market a new product which is more convenient, more economic and in generalbetter than the ones of that same firm. In this case the company in exam can actuate severalcountermeasures and, among them, there is the FUD.How it works: Actuating a FUD strategy is not difficult, it consists just in sending misinformation through non-official channels about a company, or its products, in order to discredit the same firm or some products ofits. Doing this operation the company which is the target of the FUD loses credibility and its products on themarket are less sold.Such a technique like this one has been judged unethical by the public opinion and by a lot of companies,so that also the Antitrust and other market – supervisor companies decided to formulate a general rules –system in order to prevent such anticompetitive actions.Phases of the FUD strategies actuated by Microsoft towards Linux from 1997 to 2001.Staring from 1997 about until 2001, Microsoft actuated several actions against Linux in order to succeed inthe IT market. These actions has several consequences, but in the end these ones were not useful forMicrosoft:· 1997: Microsoft individuated Linux and OSS in general as a possible threat for its products in themarket and decided to actuate several strategies to defeat the emerging system.· 1999: From 1997 to 1999 Microsoft always declared that Linux was not considered as a threat forthe company. But starting from 1999 Microsoft’s official statements about Linux changed. Thecompany in fact admitted the high potential of the Open Source, but always declared thatMicrosoft’s products were the better ones.So, on April 1999 a performance – testing firm called Mindcraft, published an article titled“Mindcraft study shows Windows NT outperforms Linux”. After few months it emerged thatMindcraft was charged by Microsoft itself, so there was the possibility that the article was notcompletely truthful.· 2001: Although the Microsoft’s actions and the information apparently wrong to the detriment ofLinux, the famous Open Source didn’t fall and, instead, was able to survive in the market. Thestrategy actuated by Microsoft failed.An important thing: We know about the Microsoft’s actions against Linux just because we are dealing withevents really happened. But we don’t know if these actions were performed by Microsoft in order to
  • 27. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 24ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007actuate a FUD against Linux, this is a supposition convalidated by some real events. However it is acommon rumor that Microsoft during those years tried to suppress Linux with several economic, andsometimes unethical, strategies.
  • 28. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 25ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007FINAL CONSIDERATIONS ABOUT THE HALLOWEEN DOCUMENTSAND GENERAL OPINIONSFinal considerations on the Halloween Docs in this paperWhy these were important.Well, we have dealt with the main events concerning the Halloween Documents and as it is possible to see,what happened during that period was very important. In general, when such a strong and great eventlike this one happens, its consequences are important and affects everything. In our case, Microsoft, Linux,the general informatic world and the IT market verified several changes; now that changes are irrelevantbut just why we cannot see them as it was before.At present, Microsoft, Linux, OSS and other systems are the way they are because of these happenings;that is the main reason why we really think that the Halloween Documents were so important in the historyof Informatics.Microsoft has been one of the first leader companies in IT market since its birth; when something happensto such an important firm, everything connected to it, changes. We deem that our present society hasbeen modified by those events, that’s the reason why we think that our research constitutes a validdocument and a significant source of information from everyone interested in this argument.Final considerations.So what is it possible to say in the end?Reading what happened we can see how hard and difficult is the IT market and how strong is thecompetition among the companies and the firms there. Our research has the only one purpose to be asignificant source of information for these happenings and for what happened to Microsoft, but expressingsome considerations is surely possible.Every market has its own rules. Competition is present in every level and in every economic sector, even inthe IT world. And right in the IT market we can see one of the strongest competitions; in fact, computers,software, innovative technologies and informatic products constitute a very big business in the world.When a company tries to emerge in the market, when it tries to succeed there and, so, to be the best;economic strategies are a very important component in order to reach such a kind of objective.Surely Microsoft adopted some strategies, some of them were not completely ethical and others werewrong and anticompetitive.But what we want to underline is just a thing: today, what Microsoft did, is part of the various existingmarkets; it is impossible to demand a company to succeed within behaving absolutely “right”. In Economyanticompetitive actions are common and, in spite of the existence of special supervisors like the Antitrust,
  • 29. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPER PAGE 26ANDREA TINO, MARIACARMELA SPADA, VINCENZO SOFIA, CRISTIAN SANTORO – 2006-2007things like this happens anyway. So seeing what Microsoft did, like an extraordinary thing is wrong because,at contrary, it is a very common situation.General opinions of the groupLooking now at what happened then.At the end of this research we want finally express our personal opinions about the Halloween Documents.In general we consider the Microsoft’s behavior not right; but considering that some confidential andstrictly secret documents were leaked, the company had to face difficult times. We consider the leakageof the documents out of Microsoft as another wrong and anticompetitive action, even if the leaking sourceremains unknown.Furthermore, given that the competition in the IT market is strong and very exclusive, we also think thatMicrosoft maintains its top position inside the market thanks to its products’ quality, and not only for itsstrategies.Because of all these aspects of the general problem we don’t feel like judging the Microsoft’s behavior aswrong, but given that its actions were anticompetitive, we cannot judge these ones right too.Finally we believe that events like this one, are part of the market dynamics.So what happened is just a consequence of something larger like the market’s general dynamics. Untilthere will be organizations like the Antitrust or other supervisors, the market strategies will be always,somehow, ruled and commeasured.
  • 30. MICROSOFT HALLOWEEN DOCS – ENGLISH RESEARCH PAPERENGLISH RESEARCH PAPERCOMPONENTS OF THE GROUP· Andrea Tino: Project Manager and Research Division (Halloween Documents’ core)· Maria Spada: Research Division (Information about Microsoft Corporation)· Vincenzo Sofia: Research Division (Microsoft’s economic strategies)· Cristian Santoro: Research Division (Information about Open Source Systems and Linux)INFO & CREDITSTHE HALLOWEEN DOCUMENTS: MICROSOFT COMPELLED TO ADMIT THE AUTHENTICITY OF SOME CONFIDENTIAL MEMORANDAABOUT THE SUPPRESSION OF OPEN SOURCE SYSTEMS.© 2006/2007 - All rights reserved.University of Catania, Academic Year: 2006 – 2007.MAIN SOURCESAll the information used to make this paper have been taken from official and reliable sources. Folowing isthe list of the main sources used in this paper:· Microsoft:,· Open Source:· E.S. Raymond’s official site:· Wikipedia:,