Red Hat, a company offering open-source software, has countered Microsoft’s proposal to settle class-action suits by donating what the software giant describes as $1 billion worth of software, hardware, and computer training to needy schools. Among other things, the Red Hat counterproposal focuses attention on how much Microsoft actually would have to spend if the courts were to accept its settlement offer.

Microsoft has described the proposed donations as an innovative way to end more than 100 class-action lawsuits pending against it. Microsoft’s proposal was submitted to the Federal District Court of Maryland Nov. 20 and is awaiting approval by U.S. District Judge J. Frederick Motz in Baltimore, who is overseeing the class-action suits. The suits stem from anti-trust litigation originally filed by the U.S. Justice Department.

Critics immediately labeled the Red Hat offer a publicity stunt, but some school technology leaders told eSchool News the proposal seems to have substance.

Red Hat—which makes a version of the Linux open-source operating system—offered to give its software to every school district in the nation for free. As a result, the company said, Microsoft could focus on buying hardware, instead of software, for the estimated 14,000 eligible school districts.

“While we applaud Microsoft for raising the idea of helping poorer schools as part of the penalty phase … for monopolistic practices, we do not think that the remedy should be a mechanism by which Microsoft can further extend its monopoly,” said Matthew Szulik, chief executive officer of Red Hat.

Under Microsoft’s proposed settlement, the majority of the $1 billion would be spent on software donations, while smaller portions would be used to fund teacher training, create programs to support and sustain technology in schools, and discount the cost of approximately 200,000 refurbished computers for schools each year.

The products included in this offer are Office XP, Office 2000, Office 2001 for the Mac, Windows XP Professional, any Scholastic Magic School Bus title, any My Personal Tutor title, one Windows 2000 server and client access license, and one Encarta Class Server and access license.

Only schools at which 70 percent or more of students receive free or reduced-priced lunches would be eligible. That’s approximately 14 percent of all schools, according to Microsoft’s estimates.

Red Hat said it would give its open-source Red Hat Linux operating system, office applications, and associated capabilities to any school system in the United States at no charge. Red Hat also will offer online support for the software through the Red Hat Network, which currently is a fee-based service.

Unlike the Microsoft settlement, which is guaranteed for five years, Red Hat’s offer has no time limit, the company said.

“Initially, I just found it humorous, since you can download Red Hat’s software for free already. However, since the offer includes Red Hat Network [support], this becomes a much more serious offer, as that service does involve some direct costs to Red Hat,” said Kyle Hutson, director of technology at Rock Creek School District in Kansas.

He added that this public-relations stunt is more than a philanthropic gesture. “It calls Microsoft’s bluff that they are spending $1 billion as the settlement for a lawsuit, when it will actually cost Microsoft much less than this amount,” Hutson said.

Norris Dickard, senior associate of the Benton Foundation, which focuses on digital divide issues, said Red Hat’s offer is “part of a ‘tit for tat’ among competitors.”

“Competitors of Microsoft—like Red Hat—feel that Microsoft is using this deal to get out of numerous lawsuits and extend its monopolistic position by getting [schools] hooked on its software, while looking good in doing so,” Dickard said.

He pointed out that Red Hat—which earns money by charging fees for technical support for its free, open-source software—essentially is doing the same thing. “Of course [Red Hat would] like to see Linux become the standard in schools,” Dickard said.

“Red Hat, Microsoft, and Apple are all battling for the schools’ [business], because today’s students become tomorrow’s consumers and business leaders. I think schools tend to forget that this is the ace up their sleeve when dealing with any software that has a practical use outside the schools,” Hutson said.

So, would schools fare better with free, open-source software from a company like Red Hat, or more mainstream products from Microsoft? “It could be argued from a straight cost-benefit analysis that using open-source software like Linux could be cheaper for schools in the long run. However, schools and systems are not as familiar with it,” Dickard said.

“A school that has already invested a great deal in Microsoft products would probably not get a whole lot of value out of Red Hat’s proposal, because it would cost more to integrate the old and the new,” Hutson said. “For a school without much investment in Microsoft or … in any platform, Red Hat’s proposal provides a way to get much more value.”

When eSchool News contacted Microsoft for a comment, the company said it would welcome contributions to its National eLearning Foundation, which will be created to oversee Microsoft’s school donations.

“If [Red Hat] would like to donate to the foundation—to the schools—that would be wonderful and they should do it,” Microsoft spokesman Rick Miller said.

Links:

eSchool News, Nov. 21: Microsoft’s $1 billion class-action settlement to benefit schools
http://www.eschoolnews.org/news/showstory.cfm?ArticleID=3302

Red Hat Inc.
http://www.redhat.com

Microsoft Corp.
http://www.microsoft.com