Microsoft reaches licensing agreement with Quanta computers, the manufacturer of the Kindle Fire

Microsoft and Quanta Computer have signed (what we presume is a giant stack of legal papers) an agreement that protects and licenses Quanta by providing "broad coverage under Microsoft's patent portfolio for Quanta’s tablets, smartphones and other consumer devices running the Android or Chrome Platform".  The full details of the agreement haven't been disclosed, and likely never will be, but it's another deal where Microsoft will earn money on the back of software using the Linux kernel.

Quanta Computer probably isn't a name you recognize, but there's a good chance you're using some of their products.  They build hardware to spec for other companies -- including the Amazon Kindle Fire.  This, and the addition of Chrome OS to the mix makes this a dangerous precedent.  Microsoft has long considered open source software, and the Linux kernel in particular, a thorn in their side and have used creative ways to try to stop the distribution of products using the technology.  Let's have a look at the history a bit after the break.

Source: Microsoft (opens in new tab)

Microsoft realized in November 1998 that software built on Linux could pose a serious short term threat to their business model, especially on the enterprise level.  The infamous Halloween documents (a set of internal Microsoft memos leaked to open source foundation members) state a few really interesting things, which I'll quote from the documents here:

  • Linux represents a best-of-breed UNIX, that is trusted in mission critical applications, and - due to it's open source code - has a long term credibility which exceeds many other competitive OS's.
  • Most of the primary apps that people require when they move to Linux are already available for free. This includes web servers, POP clients, mail servers, text editors, etc
  • I previously had IE4/NT4 on the same box and by comparison the combination of Linux / Navigator ran at least 30-40% faster when rendering simple HTML + graphics.
  • Linux's (real and perceived) virtues over Windows NT include: Customization ... Availability/Reliability ... Scaleability/Performance ... Interoperability ...
  • Linux is emerging as a key operating system in the nascent thin server market
  • Using today's server requirements, Linux is a credible alternative to commercial developed servers in many, high volume applications.

Perhaps the biggest tell in why Microsoft cares about Linux is the following:

Compaq and Dell merely have to credibly threaten Linux adoption in order to push for lower OEM OS pricing.

Compaq and Dell may not be the big players they once were, but in 1998 if they had decided to offer computers to the general public that ran Linux, a copy of Windows 7 might not cost $300 today.  Microsoft saw that they would have to fight Linux at every turn to maintain their huge profit margins.  While those profit margins aren't as huge, and Microsoft is no longer the only major player in the tech world, the practices continue.

In 2005 the Open Invention Network was founded, consisting of IBM, Sony, Philips, Novell, Red Hat, and NEC, and they pooled together a portfolio of patents designed to keep Microsoft at bay.  If Microsoft ever decided to go after a Linux vendor, the OIN would countersue and all hell would break loose.  Microsoft has long threatened to do it, saying that the Linux kernel violates over 200 patents, but so far things from Redmond have been all talk.

Enter Google and Android.  Microsoft likely sees the popularity of Android as the threat they avoided in 1998 -- Windows Mobile is dead, and WP7 can't sell enough product to justify it's existence.  They have been able to convince some Android OEM's to sign undisclosed licensing agreements, which very likely revolve around the Linux kernel.  Acer, Viewsonic, and HTC are notable examples.  Now they have thrown Chrome OS into the mix.  Like the OIN, Google could probably make things very tough for Microsoft -- especially in the public eye -- so they avoid the real issue and go after the smaller partners.  Now they have shown a new strategy -- going after the people building the equipment.  Amazon would never settle with Microsoft, and Microsoft would never sue Amazon, so they had to find another way to make their money.  They went after the factories that are actually building the hardware.

I'm a fan of licensing agreements.  Microsoft deserves every penny they collect from companies (like Apple and Google) that use Exchange Active Sync.  They offer up a fairly priced license, and continue to work on the product.  But what they're doing with Android OEM's and vendors is evil.  Microsoft needs to find a new way to fund their mobile division, or Google needs to step in and force things to come to a head.

Jerry Hildenbrand
Senior Editor — Google Ecosystem

Jerry is an amateur woodworker and struggling shade tree mechanic. There's nothing he can't take apart, but many things he can't reassemble. You'll find him writing and speaking his loud opinion on Android Central and occasionally on Twitter.

  • And the plot thickens...
  • maybe the Android version after Jelly Bean should be Kinetic Enema? Not quite a dessert, but it sure would be sweet to see MS take it in the rear for a change.
  • @Jerry, any thoughts on WHY Google has not stepped in other than a bit of talk and a patent handoff to HTC?
  • Patent troll is patent trolling.
  • You mentioned some of this in a thread yesterday, thanks for more detailed info. Interesting stuff. I too, wonder why Google doesn't go right after both MS and Apple. It seems like the OEM 's are left hanging.
  • Another great post Jerry. Well written and thought out, what journalism should be. It would be nice if all AC editors put this kind of thought in their posts.
  • I don't care about this license for that or what this company says about x company. That's all inside baseball to me & that stuff is all too common. What I do care about is the end result to consumers. My fire gets lit when said mega corporation, so concerned for their profits, becomes a greed machine. When M$ begins to act like Bank of America then I got serious issues. That should tell you something coming from a resident of Charlotte, NC where BOA is head quartered.
  • Are you "occupying" someplace while you post this?
  • Wait, Jerry, why are you suddenly flopping to the dark side of this issue? I've seen you post before that the most probable scenario is Microsoft is simply licensing Fat32 or MTP or some other common technology that these device makers put into their devices. Now you gone whole pumpkin on the 1998 Halloween stuff?
  • Yup.  Now that MS has decided to go after a company like QC (the Foxconn of the tablet and netbook world) who doesn't write software, I think it's more than some licenses for file systems. If it is just bickering over FAT support, QC was stupid to settle.  The problem is Microsoft won't just come out and say why they take issue.  I can only think they conspircay theories are wrong for so long, after all :P  
  • This is kind of a one sided post..
    I noticed you say that "Amazon would never settle with Microsoft." The only problem with that statement is Amazon has already settled with Microsoft regarding the Linux patents. Also, for all of Google's chest thumping regarding Microsoft Android patents, they never say Android doesn't infringe, and I noticed you didn't either. So, tell me, how is it ok for another company to steal the intellectual property of another, and not expect the offended company to come after others that use the infringing software? If you cannot protect your IP why do R&D to develop it? Also, you failed to mention Motorola. Microsoft is suing Motorola over these very same patents, and the case is not going well for Moto(we should expect a decision from the judge on November 4.) Lastly, if Microsoft's patents weren't legit, why did Samsung settle? Samsung, the same company that is defending itself, and counter suing Apple regarding patents. Why would they not counter-sue Microsoft if they threatend anything?
  • Microsoft has been doing this kind of garbage now for years.. Some settle some dont.... ultimately thsoe that dont settle end up fighting in court.... i am very curious to see where anyone is infringing on patents if its not for FAT32 or something honestly because they have pulled the same junk with Linux.... Steve ballmer has even been quoted with saying that Linux users owe microsoft... Even going so far as to threaten to sue individual users of the Linux Distributions if companies didnt settle with them. Only ones that did i'm aware of is Novell. You'll also note if its software patents that they are tiptoeing around actually going after the people that wrote the software the OHA and google....