SURPRISE SETTLEMENT EVENLY SPLITS MICROSOFT

[Jim Herrmann]

SURPRISE SETTLEMENT EVENLY SPLITS MICROSOFT; ONE FIRM TO MAKE SOFTWARE, OTHER 
TO MAKE PATCHES

Decision Keeps Redmond from Monopolizing Massive Microsoft Patch Industry

Redmond, Wash. (SatireWire. com) In a surprise settlement today with nine U. 
S. states, Microsoft agreed to be split into two independent companies, one 
that will continue to make Microsoft operating systems, browsers, and server 
software, and another, potentially larger company that will make patches for 
Microsoft operating systems, browsers, and server software.

Critics immediately charged that the settlement, which overrides a previous 
agreement with the U. S. Department of Justice, does nothing to diminish 
Microsoft’s standing as the world’s most powerful software company. But 
industry analysts argued that providing patches for security holes in 
Microsoft programs is a major, untapped growth industry, and
applauded the states for not allowing Redmond to control it.

“Just consider, Microsoft can make an operating system, such as Windows XP, 
and sell 200 million copies, but each one of those copies is going to need at 
least five patches to fix security holes, so that’s 1 billion patches,” said 
Gartner Group analyst Mitch Fershing. “That is an enormous, undeveloped 
market.”

Microsoft employees seem to agree, as sources in Redmond described a “mad 
scramble” among staffers to position themselves for spots at the new company, 
called Patchsoft. Asked why people would want to leave Microsoft for a 
startup, the source said the answer was “really quite simple.”

“Everyone here is asking themselves, ‘Do I want to be part of the problem, or 
part of the solution?’” he said.

But J. P. Morgan analyst Sherill Walk suspects another motive.  “Considering 
the sheer number of patches we’re talking about, I think the new company will 
become another monopoly, and I believe the people who’ve jumped ship very 
well know that.”

“Nonsense. It’s really all about consumer choice,” responded Patchsoft’s new 
co-CEOs, Bill Gates and Steve Ballmer.

But how will Patchsoft make money? Currently, Microsoft issues free patches 
for problems in Windows XP, SQL Server, Internet Explorer, Outlook, Windows 
2000, Flight Simulator, Front Page, Windows Me, Media Player, Passport, NT 
Server, Windows 98, LAN Manager
(for a complete list of MS software needing patches, see www. support. 
microsoft. com). Under the agreement, Microsoft will no longer issue patches, 
which Gates said explains the recent five-day outage at Microsoft’s upgrade 
site. “That was planned,” he said. “It was a test of the Microsoft No Patch 
Access system. Went perfectly. No one was able to download anything.”

At a press conference to outline the settlement, Connecticut Attorney General 
Richard Blumenthal pledged to keep a close eye on Patchsoft to ensure it 
would not overcharge for its services. He also expressed hope that other 
firms would soon become Certified Microsoft Patch Developers (CMPDs) and 
challenge the spin-off. Asked if Patchsoft, with so many former Microsoft 
employees, will have an advantage over potential competitors in the Microsoft 
patch market, Blumenthal said the settlement prohibits collaboration.

“Patchsoft developers will not have any foreknowledge of bugs or security 
holes before software is released. They’ll just have to be surprised,” he 
said.

“So it will be just like it was when they were at Microsoft,” he added.

One Reuters reporter, meanwhile, questioned the long-term viability of 
Patchsoft. “This seems like a logical split right now, but what if 
Microsoft’s products improve to the extent that patches are needed less 
frequently, or perhaps not at all?” she asked.

“I’m sorry, I can only respond to serious questions,” Blumenthal answered.

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