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Microsoft Would Settle For The Children
The news from MSNBC
is that Microsoft wants to, er, settle for the children. Take that
whichever way you want. They propose to settle civil anti-trust cases (not the DoJ suit) with a $1.1 billion (retail value) spanking (they
have $36 billion in the bank), consisting of free computer goodies to our nation's poorest schools (the first hit's free, kids). I'm sure Microsoft will upgrade those old computers to keep them current, in perpetuity, for free, out of the kindness of their hearts, but in an apparent oversight that was left out of the news report. Of that $1.1 billion, $0.9 billion will be software presumably valued at whatever Microsoft wants to charge (see "monopoly"). For hardware and (laughable) training/support costs, Microsoft will be docked three weeks' worth of interest on their cashpile; they will seek matching funds for the remainder, I am not making this up. Some lawyers opposed this but "concluded that Microsoft's monopoly already is so pervasive that students would have to learn to use these products anyway in the workplace." Update: 11/20 21:22 GMT by M : Heh. Red Hat offers an alternative to Microsoft's settlement proposal - you provide hardware, we'll provide software.
"You are a monopoly. As punishment, you must provide free software to the public schools, so that you can spread even further. Bad Microsoft! Now get back to replacing those foreign operating systems."
You're very right, Jamie. The double-meaning in the title *is* hilarious.
Sounds like Andrew Carnegie's big thing with libraries -- donate lots of money to build libraries without any money to fill them with books.
Joe Chemo would be proud. This is exactly what antitrust laws are supposed to prevent.
No SIG for you!
How about Microsoft has to spend the money to buy the computers, but must put free (as in speech, not beer) software on the computers. Microsoft then helps out the schools without having to spend all that money on expensive software. That is what it's all about, right? Helping out the schools?
This is so bad because of what you said. It's a business decision that Microsoft might make, it's not in any way something that should be a settlement for lawsuits. "As a penalty, we'll engage in a massive marketing campaign...".
<obvious>Why not hook the kids up to CocaCola and BigMac's, IV'd.</obvious>
.. don't let your kids get left behind by forcing them to think "My Documents" is where their files are, no matter which computer/OS/etc they are on.
/surely/ be stuck in places when they grow up when only Coke is available).
This is kind of backwards if you want your next generation to be tech-saavy. Windows ABSTRACTS computers, removing the need (for most people) to actually know how a computer (and software) operates. In this respect, the world will be FORCED to at least have a small understanding of the technology
At any rate, it's insane. Would we let Coke donate lots of Coke to kids as a settlement (knowing that they'll
What strikes me the most is the acceptance that Windows will be the dominant platform for the next 80 years. Fortunately, this will not be true. Very few companies even stay in business that long.
"Old man yells at systemd"
Either hell has frozen over or I missed something. Microsoft has not triumphed over the government, as MSNBC claims. AFAIK, the 18 states involved are still in discussion about the goverment settlement. Just like MS, portrarying themselves as the victim. "We won the case against the government, now we just have to work out these little suits. The big, cuddly teddy bear you as Microsoft will not give in... we will fight to stay strong". Yeah, bite me. Microsoft is not good for the consumer, yet they're parading themselves around like the consumer is on THEIR side.
There is no reasonable defense against an idiot with an agenda
:wq
I imagine MS is looking to do the same thing here. It will be a good thing for MS, a good thing for the schools, what the hell right? Wrong. I am really disapointed that they would try and do this a means to reach settlement, makes the whole thing rather hollow. If they had done this just because they felt like it I'd probably support them in it, now they just look slimy.
Errr, more slimy.
Are they kidding? This doesn't solve anything; it makes it worse! By providing software _for free_ to such a large number of people, the software now becomes the defacto standard for yet another group of people. These students will grow up in Microsoft(TM) America and like so many people before them be hooked into software that they'll be reluctant to leave in the future.
And using poorer schools... that's good. These schools would have previously been a good "target market" for OSS... can't beat the price. Now MS gets three victories for the price of none... they get the plaintiffs off of their backs, they get the PR boost that always comes with helping poor children, and they get a win against OSS. And what does it cost them? A "virtual" $1.1 billion. They're giving software to people that probably wouldn't have bought it in the first place, and they're giving away a product based on its RETAIL value; it costs MS very little to give this software away. The realized cost to MS will probably be less than $100 million. Much less.
Another Seattlement, if you ask me. I think I'm going to give up and be a rice farmer now... until Microsoft (TM) Wheat pushes me out of the staple foods market.
-- Minds are like parachutes... they work best when open.
Maybe I'm being cynical, but Microsoft providing the software for these institutions for free would be a very good move on their part to slow down the adoption of alternative operating systems and office suites. It's here, in schools that cannot afford the MS pricing anymore, that the erosion of MS monopoly will begin, and Microsoft has proposed a very effective counter measure to it. They slow down Linux and OSS adoption, and get DOJ off their backs. Both with one strike.
Then again, maybe they're just doing it for the goodness of their hearts...
In other words, this (i) helps Microsoft strengthen their Monopoly, (ii) costs Microsoft little more than $200 million, and (iii) probably harms children.
The only way any kind of settlement with Microsoft will accomplish anything is if the people who make up Microsoft's leadership actually alter their behavior.
This latest proposal shows that Microsoft is fundamentally incapable of changing its core DNA to suit a new paradigm. While all public businesses are driven by valuation, Microsoft doesn't realize that when a corporation reaches a certain size and power in the marketplace, it carries additional responsibilities.
Microsoft prides itself on providing boundless upward value to stockholders, but it seems to have a huge mental block when it comes to assessing its role in the larger culture.
Read the EFF's Fair Use FAQ
So our average computer shopper doesn't research that end of it. Should they... of course. But, if they don't understand that they should be researching HW/SW/OS, then they won't. I imagine some investigate SW to some degree (Antivirus, maybe an office suite), but I highly doubt any would even think of the OS.
So who is going to educate (en masse) the public. We certainly can't expect MS to do it. Who would expect any business to educate its customers into researching alternatives? Us, the Free SW crowd? Sure, we would, but how? That's the real question. How do we show the general public that there are other options out there. That they don't have to just accept whatever the big retailer installs on their machine.
According to this idea....
-MS gets to increase it's market share(by displacing Macs in schools)
-Does not need to change it's monopolistic practices
-Gets a $1.1 billion tax writeoff(They will try to write that off)
Wow, sounds like a great deal....for Microsoft and states idiotic enough to sign this(Kickbacks anyone?)
-Henry
"Useless organic meatbag" -HK-47
$1.1 billion worth of software does not cost Microsoft anything. It's essentially free for Microsoft to crank out more software since the R&D has already been paid for. That reduces this so-called "settlement" to just a Microsoft marketing campaign.
Best solution: they must contribute $billion or so of cold, hard, cash to a fund for school technology improvement. Then independent technical experts and educators can suggest uses for the money that don't necessarily benefit Microsoft. This settlement is a total victory for Microsoft - I'd hate to see what happens when they actually win a case...
Your right to not believe: Americans United for Separation of Church and
And tell me, how many of them go complaining back to the shop saying how they hate the goddam computer because the operating system sucks ass?
Oh that's interesting, basically none..
Thus, Windows is doing everything that the majority of users need, and thus is doing a good job. Just because use tech savvy people (who, BY THE WAY have different needs/wants from our software, and we are also in the vast minority) want more out of our operating systems and don't necessarily like what Microsoft gives us, doesn't mean that for the vast majority of the people it doesn't work perfectly fine for them...
Just food for thought.
If God gave us curiosity
Bullshit. These kids need better computers in their classrooms the way staving Afghanis need shiny new Air Jordans.
These kids need school buildings that aren't falling down, schools that are free of violence, teachers who are competent and well-paid, and textbooks that are up to date. Computers in the classroom (other than in progamming and clerical classes, of course) is a fad that will ultimately have as much revolutionary impact as educational filmstrips. (Beep.)
This is a loss for everyone except Microsoft. In any sane nation, their corporate charter would have been revoked long ago, their corporate HQ razed and the ground salted, and Gates would have spent a week in the pillory, being pelted with rotten tomatoes and old DOS manuals.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
Microsoft wants to emphasize the consumer role in this suit. Please understand that the Antitrust laws were NOT written to protect consumers. The law is about competitors. The first major Anti-trust suit broke up Standard Oil. The problem with SO was that they kept gas prices so low that competitors could not get into the market. Consumers were happy. Basically, the SO and MS cases are similar in this respect. MS has been giving away product in order to keep competitors from taking control of "the desktop" or even having a presence there. I don't think that consumers have a legitmate stake in the lawsuit, only the competitors. As long as Microsoft can deceive people (Judge, DOJ, citizens) into focusing on the consumers, I think that MS will win. The only chance that the states have to win their cases is to get the Judge to focus on the anti-competitive nature of MS's acts.
First off, I should say that I *am* a lawyer..though I no longer practice (tech is far more entertaining):
This is an archetypical pro-business civil settlement. MS appears to be minorly rebuked, yet comes away with a PR and marketing triumph. On one hand, you have *seriously* needy public schools getting new and arguably functional hardware and software. That is, overall, a really good thing (N.B. I see nothing addressing issues of integration, support or training and am thus inclined to think that much of this, if it comes to pass, will be largely un-under-utilized..but that is another matter). Any settlement that touches addressing these shortcomings is at least worth considering...
However, as was pointed out elsewhere, MS is sitting on about $36BB cash and what is largely being "offered" here is in the form of software and hardware ($900MMish based on MS valuations) and here is the rub. That $900MM has an actual cost of somewhere in the neighborhood of $50MM (I have nothing to base this number on and I wager it will be lower than than...), that is to say that the actual cost to MS is de minimus.
In exchange for this minor offering to the legal gods (or demons), MS will *gain* a really substantial marketing coup...market penetration in a very young, eager and hungry market group..school children. (aside: I am sorry, I have this great image of RJ Reynolds handing out cigarettes at schools to settle one of the marketing class actions they have faced...) This is truly a win-win for MS...very little actual cost and a huge marketing upside.
The entire idea behind class actions and/or punitive damages is the idea of *punishing* a corporation for wrongdoing at the corporate level. It is always a matter of ratios. As a percentage of income/wealth, a $100 speeding ticket *hurts* the recipient to a certain extent...as it should. Here, we are faced with a situation where MS will receive the equivalent of a $1 fine *and* win Man of the Year.
If they are to be "punished" for corporate wrongdoing (rather well documented, at this point), then do so...make it meaningful and make it *hurt*. Otherwise, it is simply a cost of doing business and a cost that they have long demonstrated that they will willingly bear.
best,
/rootrot
--
Many people would sooner die than think; in fact, most do.
- Bertrand Russell
Uh, the alternative is not a lump sum payment to any government. This is a settlement of the *private*, class-action, civil suits brought againts the company by users purporting to have been materially harmed by the monopoly. The alternative is a lump payment to any SOB who wants in on the class. Wired says about $10 bucks a head after attorneys' fees.
This is eerily like big tobacco settling their suits by providing free cartons for distribution in schools. Locking in another generation of lusers.
The size of the MS monopoly is starting to generate a gravity-like field which distorts perception of reality in its presence. Even ostensibly unbiased media coverage of MS seems boggled as to how to speak about them. I can't imagine any other entity in any other industry even suggesting such a thing. And now MS is dictating security policy on Capital Hill. Its like GM setting emmissions standards. Thankfully, the Fates look askance at such hubris.
And lately I do too. Until a few months ago I liked to imagine that I understood peoples fear of the unknown, their reliance on the familiar; I took a gentle, only slightly patronizing tone with Windows users. Now I regard them all as moral beggars. If you run Windows you are wrong, and should be shunned from polite society.
illegitimii non ingravare
Consumers benefit by getting something
As a consumer who has presumably been harmed, what exactly does this settlement do for me? How has MS been 'punished' for its actions, or alternatively how is it deterred from doing it again?
Have you not been reading the case? at least one of the points at issue is that M$ has been forcing hardware vewndors who sell its product to not carry competing products (ie. if you want to make a PC with Windows on it you can't sell PCs with Linux or Be, or etc on it).
The result - I couldn't buy a laptop with Linux, or even a blank one to put Linux on myself - now because of the DoJ suit things have changed (a little). That's called "leveraging a monopoly" it's illegal
So long as a customer goes to buy a PC at a brand leader like Dell, or Compaq, or Gateway and they don't have a choice of a non-M$ OS, or of one without an OS (at a lower price of course) then we don't have a choice.
PS: you want to buy all the old copies of Windows I was forced to buy with my last few computers? oh wait I'm not allowed to sell them - I was forced to pay for them, declined to accept the license but seemingly am still bound by conditions in the license I didn't accept that bar me from selling it
This agreement is such bullshit that it boggles the mind.
Microsoft gives away some of it's software to schools that could not have afforded it anyway (so they are really not losing potential revenues).
The real kicker of this settlement is that it sounds like Microsoft will get to value the software at its reatail value and not at the actual marginal cost to Microsoft
Microsoft loses almost no money from giving away the software, except the cost of distributing the cd's. So they get to write-off $1.1 billion in profits, value the give-away at $1.1 billion, but their actual costs are only pennies per installation. So if they value windows XP at $200 but the actual costs of distribution and media on that one istallation are (let's be generous) $5, you can see that this $1.1 billion settlement really costs them only $25 million dollars (taking the $200:$5 ratio of stated-value:actual-cost used earlier).
Now since this $1.1 billion dollars is subtracted from their income, and assuming Microsoft pays about 15% corporate taxes, we can see that they get a $165 million write-off for about $25 million dollars. In other words, Microsoft ends up $140 million dollars richer from this deal.
Now there is $128 million in training and support they are promising (again, real cost to Microsoft is probably less) but even that leaves them with a profit. There are vague promises of setting up a foundation with up to $250 million, but that is not a firm number.
Also they will be trying to obtain matching funds from other charities, to leverage this operation.
And when you get down to brass tacks, this deal benefits Microsoft in a very important way. This gives them an excuse to train millions of schoolkids on how to use their stupid software so that when these kids eventually look for jobs their employers will have to buy software from Microsoft because that is what their employees have been trained on.
Also Microsoft gets good P.R. for "helping disadvantaged kids" (ha!) and don't have to spend millions more staying in court and risking a truly costly jury award.
In summary, Microsoft gets to escape any future civil liability, while instituting a training program that makes their software more valuable at virtually no cost, or even a cash gain for themselves. And all the lawyers will get fat fees.
Sounds like a great deal for Microsoft. Now what would be really good is if Microsoft had to spend $1.1 billion dollars deploying other companies software in disadvantaged schools. Wouldn't it be great to know that the Linux or FreeBSD or Oracle, etc., etc., installation at your local school being paid for by Linux?
evanchik.net
Well, actually, it appears you will be forced to buy it now, so that your school-aged children can bring their schoolwork home.
I do not have a signature
Force Microsoft to donate $1.1 billion among the Free Software Foundation, the OpenOffice project, KDE and GNOME projects, the Linux kernel team, and various others. That'll pay all the significant Open Source developers out there for hmm.. at least the next 10 years.
Why can't MS just pay the 1.1b fine in cach?
If electricity is produced by electrons is morality produced by morons?
Hmm, when I was in high school they made a big deal about beingup to date with the latest software used in industry. I remember clearly writing all my reports in WordPerfect 5.1 for Dos, just like industry. Didn't help me any though, by the time I got out of college MsWord was the standard (word95 I think). Not that it matters, the company I work for uses FrameMaker when we need formated text, and otherwise emacs, or vi depending on your religion.
I also remember watching the transisition from Word*Star, but I was a kid so that was on the sidelines.
With that history it seems to me that computers change too quick for it to matter what you learn on in high school, it will be obsolete before long anyway.
The overwhelming majority of non-technical computer users that I know (a couple of dozen people) keep asking "Why is my computer so hard to use? Why does it keep crashing? Isn't there something better? Can't you smart computer guys make a computer that just works?". They are really frustrated and would love to switch to something else.
The problem with suggesting Linux is that they always have a hard requirement of compatibility with Microsoft file formats. The other problem is that the notion of a multi-user system is pretty much beyond them ("So when should I be logged in as 'root'?").
The answer (IMHO) for the average user continues to be to make computing more like using a telephone. You don't manage your own telco switch, why should you manage your own computer?
For the average computer user they should be able to turn it on and have instant access and turn if off without a shutdown. While the computer is on they should have reliable access to their data and applications. They should only have to authenticate themselves once (probably with some sort of hardware dongle so they can use any computer anywhere). Upgrading should not be a concern.
Can you imagine having to wait for your telephone to boot and then having to shutdown before hanging up or having to decide when/how to upgrade the software at your local telco switch?
Microsoft also sees the problem and they are positioning themselves to uniquely exploit/solve the problem with .NET My Services (aka Hailstorm). Broadband will become ubiquitous in the upcoming decades and Microsoft (MSN.com)will be there. Success depends not on being technically better but instead on being in the right place at the right time to exploit the natural control points of the industry. The executives at Microsoft understand that and the corollary urgency of controlling those points better than anyone else.
Will it work any better? Somewhat. Will it definitely happen? Almost certainly. Will the competition screw up again and fail to demonstrate vision and committment? Also, almost certainly. Will it happen in the next couple of years? No, but it will happen in the next ten years (think about where computing was in 1991 compared to now). Where will that leave us nerds? Next to the ham radio, amateur television, and hot rod guys (i.e., people who find enjoyment more in the process than the end).
Btw: I am NOT a fan of Microsoft. It's just that most of this is pretty obviously inevitable.
You're joking, right?
How about Outlook's Virus of the Week? How about IIS's Vulnerability of the Week? How about ten years of blue screens? How about twenty years of a crappy filesystem that corrupts itself at the first opportunity? (And don't give me any bullshit about FAT being robust. If it were robust, why is SystemAgent set by default to paper over its fragility?) How about a fundamentally b0rk3d system design that the merest child could tell you was a disaster from the start? How about twenty five years of lying to the public (you would call it "marketing" and "PR") about how "innovative" Microsoft is, when in fact they've been strip-mining the industry for other people's ideas, filing off the serial numbers, and presenting them as their own? Good gravy, not even Bill's BASIC was original, being a port from a BASIC interpreter at Harvard (such activity would be considered criminal today by Bill's own set of "ethics").
You're right, but only in a sense that a dissembling lawyer would agree with. It is difficult to measure the harm to consumers, but that does not mean it didn't happen or merit correction.
Except that Microsoft was found guilty of criminal anti-trust violations. They do not get to win. Not by a longshot.
Schwab
Editor, A1-AAA AmeriCaptions
I think the best course of action is to expose kids to a variety of platforms. I have always been a PC person, and had the inherent extreme dislike of Apples and deference to anything non-Windows (e.g. Linux). Then, in my first year of college, my programming class used Linux. After an initial "No Windows? How Cheap!!!", I progressed to "Hey, that's not so bad." I'm even giving Macintosh a second thought, though not enough to go out and buy a box today.
The worst course of action, in my opinion, is to lock people into a singular mindset. Why not install different systems in the same school and let people decide for themselves which ones they prefer? Make it all accessible.
The biggest hurdle, IMHO, for all things non-Windows today, is a lack of openness and familiarity by primary Windows-users. "Windows is all there is" seems to be the dominant mantra by people who have only used Windows, because that's all they know. The same goes for Linux people and Mac people, etc., who have worked primarily with one system.
I think the best aspects of all systems should be used for what they are.
-- I prefer the term "karma escort."
This is all such typical slashdot negativity. Read this yahoo news article. Basically, this was a class action suit between 65 million consumers and MSFT. They have determined that even if the consumers won, each would only get about $10. This settlement donates between $1.1-$1.7 billion of software.
This is a much better outcome even if the consumers had "won". And say what you want about Windows--an MS OS is better than no OS at all (don't bring up Linux--do you think that a poor inner city school has the money to hire a Linux sysadmin? And who would take that job?).
Where are we going and why am I in this handbasket?
I read the article, and youre right about the math adding part. If its 1.1 or 1.7 or somewhere in between thats not the important part. read very closely. they are giving away windows XP and, get this, refurbished laptops. not new laptops, refurbished ones. Estimated dollar value of each $5-600. I dont know about you, but i dont know a used laptop in that price range that will run windows XP. Your point about the development costs of XP is valid, but only to a point. MS needs to sell y units of XP to break even, every unit sold after then is just the cost of duping and packaging. Out of the $100-300 MS gets from an XP sale, maybe $1-2 goes to actually producing it. Im sure they recouped the full cost of development already. Plus its an even sweeter deal for MS if windows is preinstalled. They dont have to make duplicate copies, the box makers do that, and some of them even throw in their own manuals. So everything is profit. Im quite certain that they have already recouped their initial development costs and are just rolling in dough now. This is a win-win scenario for MS. They look good, they dont have to pay any money, and the prosecuters get to say: See, we punished the big bad monopoly. I was unaware that punishments could be win-win. Usually they are win-lose or lose-lose. It would be like making Osama Bin Ladens punishement to be comunity service as a flight school instructor.
What Microsoft is really proposing is simply to have Bill donate a lot of money to his existing Bill & Melinda Gates Foundation? If you look at the grant breakdown, you'll see that $1.6 Billion has already been "granted" to Education. Increasing that to $2.7 Billion over five years makes an excellent tax write-off, although I'm not too certain that it wouldn't have reached $2.7 Billion in five years on its own anyway.
BG: I know! I'm giving away money each year to education anyway; let's tell them that I'm going to do it to settle this. Mwahahaahaha!
It's also worth noting that $160 Million goes towards what is essentially an MSCE-primer school, and then $38 Million goes towards paying those MSCE-primer students to support to new computers. And 200,000 reconditioned computers and laptops? In other words, they are simply redirecting what would otherwise be either landfill or freely donated anyway. I don't understand the $90 Million in teacher training either, unless it is not how to use computers, but how to make use of computers in an educational environment. Wasn't Windows XP supposed to be as easy to use as a Mac? They copied everything else, why not ease of use? (Microsoft doesn't have R&D, only D.) And yeah, $900 Million in software probably has a real cost to Microsoft of $1 Million. People need to know that the cost of duplicating software is nil.
Hmmm... Perhaps we should ask why the cost of the software will be 20x the cost of the hardware? Naaaah...
Bah weep granah, weep ninny bong!
NPR just had coverage of this on all things considered today. There they stated that it would cost Microsoft 1.1 billion. Here is my letter to them...
Date: Tue, 20 Nov 2001 18:12:38 -0500
From: "Clark C . Evans"
To: atc@npr.org
Subject: Incorrect Statement about Microsoft Settlement
You mentioned the Microsoft settlement on your
program this afternoon. And I'm afraid I heared
two mis-representations:
1. This program will cost Microsoft 1.1 Billion.
FACT: This program will cost Microsoft $300 Million.
The CD-ROMs and paper that the licenses
for their "$800 million" of Microsoft
software won't cost Microsoft more than
a few thousand dollars.
Further, since these schools are too
poor to buy the software, you can't
argue that it is a loss in revenue.
FACT: Having Children learn to use Microsoft
software, instead of open soruce
alternatives (such as open office
and linux) increases the value of their
software; since more people are familar
with it (the value of software is
proportional to the user base). It's
hard to buy new recruits.... costly
actually.
Having thousands of children learn how
to use Microsoft software "for free" is
hugely valueable to Microsoft. This is
worth more than $300 million alone...
2. This money may be used to buy non-Microsoft software.
FACT: The software licenses "retail value
$800 million" are for Microsoft
software.
Perhaps some of the $300 million can
be used to buy non-Microsoft software,
but I doubt it.
I'd like to mention that RedHat has an alternative [1]
if Microsoft *really* wants to spend 1.1 Billion.
1. Microsoft just buys the hardware instead.
2. Open Source software is used (for free).
I'm afraid that Microsoft's play is just a mechanism
to extend their monopoly. It doesn't help anyone
but Microsoft.
Could you please air a correction?
Best,
Clark Evans
[1] http://biz.yahoo.com/bw/011120/202744_1.html
This is a much better outcome even if the consumers had "won".
No it's not, because for microsoft that's not a donation at all. Once they've written the software, each particular copy only costs them the price of a CDR - a mass-produced one at that, probably $0.50. By making more copies of windows to give away, they essentially print money: money in the form of a tax-writeoff. Each copy of MS-Windows donated to a charity gets MS a $300 tax writeoff (charitable donation, baby!) for a 50-cent disk, and serves to expand the Microsoft platform dominance.
Giving away windows is win-win-win for Microsoft. Just be aware: using their pricing for copies of windows distributed as part of the settlement inflates the actual value of that settlement by a factor of about 500, and helps to perpetuate their monopoly.
Red Hat's whole deal is free software, so why didn't they help out poor school districts a couple of years ago? Does anyone really think stunts like this are going to be enough to stop RHAT's downward spiral into dotcom obscurity?