In an effort to get further involved in the growing opensource movement, Microsoft has announced that it will be creating and funding ($1 million annually) the CodePlex Foundation. The initial framing of the announcement, is as a neutral place for companies and developers to share ideas and interact, ultimately increasing the commercial opportunities for all involved. But the details as far as licensing and board governance have yet to be worked out, so it will be interesting to see the community’s reactions and willingness to participate.

Regardless, of the how the foundation moves forward, the potential benefits for Microsoft are numerous, given that many of the early projects will likely focus on the their product ecosystem, despite claims that the foundation will be platform agnostic. Ultimately, the possibility of delivering a better product to consumers was perhaps too good to pass up, in spite of the financial outlay. Think of it as money invested in R&D with greater leverage. Depending on the spin, this announcement can also go far in bolstering Microsoft’s standing in the eyes of the general public as well, the very same people that could be buying their software down the road.

Bill Hilf, general manager of Windows Server, explained the decision on his blog:

“The perspectives on OSS at Microsoft have evolved to the point where Microsoft’s open source strategy is no longer just locked in a single ‘lab’ on campus – now OSS is an important part of many product groups and strategies across the company. We have become increasingly clear on where we work with open source – development methodologies, projects, partners, products and communities – and where our products compete with commercial open source companies or platforms. Today, there are engineering and business leaders across the company, myself included, looking at how to drive interoperability for customers and as a lever for new growth.”

[image via schoschie]