With the recent launch of Windows 7, Microsoft is banking on a return to the technological limelight. It still runs on 90 per cent of the world’s personal computers, but the company has seen revenues slide and finds itself threatened by web upstarts like Google and the renewed vigour of old foes such as Apple. Microsoft executives plan to throw $9bn next year into taking on their rivals but, more intriguingly, they have announced plans to work with some of them too.

The longstanding thorn in Microsoft’s side is what has become known as the “power of free”: the idea that software code is an algorithm, a kind of mathematical recipe that is not patentable. It has been championed for nearly two decades by, among others, Richard M Stallman, a long-haired bear of a man who delivers tub-thumpingly passionate lectures in his bare feet. In computing he is as close as it gets to rock n’ roll. Computer users should be free to view, edit and reuse the code, Stallman says; without these fundamental rights, we can’t be sure what the software is really doing and how that might affect our civil liberties.

These ideas have spawned a whole generation of programmers who produce free and open source software (FOSS). Over the years they have come up with software such as OpenOffice, which rivals Microsoft Office. More importantly for Microsoft, Stallman’s project to build an entire operating system, the underlying software that makes a computer work, produced GNU/Linux. The poster child of the FOSS movement, it is a free, open source alternative to Windows that runs on many millions of computers across the world and is Windows’s only serious competitor in the corporate computing market.

Microsoft executives have reviled FOSS in the past, openly deriding it as “communist” and “a cancer.” So they stunned everyone when, this summer, Microsoft contributed its own code to the GNU/Linux project. And in late August they announced they were putting $1m into Codeplex, a non-profit foundation for the promotion of open source. According to Darren Strange, head of open source engagement at Microsoft UK, the move was “a very realistic, business based decision, not a fit of altruism as such.”

What is really going on here? In part, Microsoft is interested in learning the methods FOSS communities use to produce code. The collaborative style of working, in which volunteers come together over the internet, provides an environment conducive to innovation. In addition, some of Microsoft’s big corporate customers run mixed environments with Windows and GNU/Linux, so they need software that works with both. Microsoft wants its application products like Office to run successfully under GNU/Linux, but they also want to protect their crown jewels, Windows. It is a delicate balancing act.

The move may also be an attempt to silence critics. With its huge market share, Microsoft’s activities have troubled competition bodies within Europe. It’s been argued that everyone should be able to access public documents without needing to purchase a particular software product. Microsoft’s use of intellectual property rights to keep its code secret raises concerns about long-term access, particularly to public sector data—our health records, tax data, and so on.

The software giant’s new tack has split opinion in the FOSS communities. Many have welcomed them as a sign that open source has come of age. Justin Erenkrantz, president of the Apache Software Foundation, one of the leading FOSS communities, thinks that it represents a “sea change” and adds, “every positive and constructive engagement Microsoft has with the open source community will continue to chip away at the old perceptions.” Others, like Stallman, remain unconvinced.

The bottom line is that the success of giant companies like Microsoft is defined by their ability to move with the times. And it’s becoming clear that FOSS offers a “viable and credible alternative to proprietary software,” in the words of one office of government commerce report. While estimates vary, it appears that the public sector could save millions by moving to FOSS. Much of this will come out of Microsoft’s pocket. Their new willingness to work with open source could therefore represent a genuine strategic shift. In the meantime, the company has just started recruiting staff to build Windows 8.

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