Microsoft's initial reaction on the 'halloween memorandum'

On the memo:

It appears to be a document written within Microsoft in August, with some annotation by others.
It is routine and appropriate for Microsoft - and we would assume all other vendors - to research, write about, and assess all competitors ... both from a business model point of view and from a technical point of view.
It is not an "official position" by Microsoft on Linux. It is a technical analysis written by an engineer in a staff capacity, and designed to encourage discussion.

On Linux:

Sometimes Linux competes with Windows NT. This is hardly news. But it is not NT vs Linux.
Dramatically demonstrates the wildly different business models of the OS marketplace and the vigorous competition at every level (technical, alliances, applications, channels and business model) that characterize the industry.
In addition, however, Linux is an alternative to/competitor for other versions of UNIX, especially RISC UNIX - in fact this may be the more powerful affect in the marketplace.
Has an utterly different business, support, and investment model from the comprehensive, integrated Microsoft model for Windows NT, which has attracted millions of developers and tens of thousands of applications.
Linux is a philosophy as much as technical phenomena. On the positive, and Microsoft is interested in better understanding and finding ways to accommodate this dynamic, it provides for extensive peer review, and for a lot of independent parallel work on a variety of features. The negatives are stark, however:

• no long term roadmap ... and no way to get one;
• individuals are a non-scalable factor in the development at various control points;
• no intellectual property protection means that the deep investments needed by the industry in infrastructure will gravitate to other business models.

Unless Linux violates IP rights, it will fail to deliver innovation over the long run.