Petard Update...

I think this Times article sort of supports my hypothesis - apparently MS costs have skyrocketed while they threw bodies at the security problem, profit margins shrank rapidly so what did they do? They reduced employee benefits!

Amid Belt-Tightening, Microsoft Talks of a Bright Future

Part of the rethinking has included Microsoft's recently announced moves to reduce coverage for employees on branded prescription drugs and to reduce the discount that employees receive on purchases of Microsoft stock to 10 percent from 15 percent.

"Belt-tightening is what more mature companies do," observed Michael Cusumano, a professor at the Sloan School of Management at Massachusetts Institute of Technology.
...
Mr. Ballmer also added that Microsoft was more confident about competing against the rising challenge of open-source software like the Linux operating system, which is distributed free. Microsoft's competitive response is to emphasize what it contends is the lower total cost of owning, maintaining and supporting its Windows operating system.

They forgot to include this quote:
"Open Source software's total cost has declined rapidly over the past three years as quality has improved, while the total cost of Microsoft solutions has skyrocketed due to serious security failures and a new, more expensive pricing structure. Microsoft does have $40 billion dollars in cash, but once a major customer is damaged by security flaws, the legal troubles for Microsoft will skyrocket", observed kmhess, lisnews.com.

Comments

Legal troubles

but once a major customer is damaged by security flaws, the legal troubles for Microsoft will skyrocket

My understanding is that software licenses these days make it practically impossible to sue a software provider for damages. (This, by the way, is a point I've heard Eric Raymond make to point out that a software license gives you no legal recourse; the only hold one has over a software provider is the threat of taking one's business elsewhere.)

We probably do need tort reform, but I think it must be said that lawsuits function as a natural constraint on companies' behavior. If there were more of a legal threat for negligence against software makers, the world of software might be different.

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