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Gateway Testifies To Microsoft's OEM Treatment
unconfused1 writes "Gateway testified yesterday about the incredible power that Microsoft wields over OEMs concerning Windows being shipped on every PC. It seems that if an OEM does not ship Windows on every PC they ship that they are severely penalized, and can have their license revoked."
Microsoft is allowed to have that kind of penalty imposed; all these OEMs needed to do was get together and contest various parts of the licence agreement.
I agree that they needed windows because of the demand, but that doesn't mean they take anything Microsoft demands without a whimper.
In the words of Blake, "Do not go gentle into that good night... Rage, rage against the dying of the light."
Fight for what you believe in, or you deserve it.
Microsoft bullying OEMs isn't news. What's news is that someone actually has the guts to testify about it. Microsoft is quite capable of making Gateway suffer for this.
When I loaded the story to read it, it had a Gateway ad in the middle of the story. Go figure.
More seriously, this is an example as to why virtually all PC-only vendors are screwed in the long run (and why I won't buy Dell stock, no matter how well they do). Everybody in the PC industry builds commodity hardware, running an OS they don't control, and tries to compete based on marketing and lowest-cost production. Thanks to things like Microsoft's OEM contracts, there's just no room to go anywhere else. Dell's success is strictly based on execution and volume - they bring nothing else to the table, really. Same with Gateway, and all the other commodity vendors.
So if the MS monopoly is ever broken, it'll be at the hands of companies that have an investment in their own technology, and their own R&D. Perhaps companies that have access to non-Wintel technology (Compaq/HP, though they killed Alpha, IBM, Apple) will be able to take a stab at it. Right now, though, nobody but Microsoft really matters in the desktop supply chain.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
Gateway can assert that Microsoft pressured them, but if there's really a market for Linux desktops then other companies would be offering them and making sales.
So why did VA stop selling Linux systems? Alleged Microsoft pressure on mainstream vendors not to sell Linux should only have made things better for VA, assuming there really was a market for Linux desktops. But the fact is that there is no serious market for Linux desktops.
While we're at it, I simply don't believe that IBM could be subject to such pressure, and yet they too have pretty much abandoned the Linux desktop and notebook business. You used to be able to find Thinkpads for sale on IBM's site with Linux on them, but not anymore. Does anyone seriously believe IBM talked them out of this? Isn't the Occam's Razor answer that they weren't selling?
You know, Microsoft doing this sort of thing is certainly VeryBad(tm), but it's nobody's fault but Gateway, Dell, and all the others that it happened.
You really have to think about how things came to be this bad. Way back in the old 3.x days, if MS would have tried to pull something like this in the licensing, the OEM's would have told them to take a flying leap and installed OS2. So of course they gave the OEM's licenses dirt cheap, and probably a whole bunch of other things to get them to install Windows by default.
Ever heard of looking a gift horse in the mouth? Did these OEM's think Microsoft was doing this out of the goodness of their hearts? Of course not, they didn't think about it at all. All they saw was the bottom line.
Fast forward 5 years when the entire country is hooked up to Windows for life support, in part, I might add, to the OEM's willingness to throw Windows out there with every computer simply because they were getting a hell of a deal. Now they can't tell MS to take a flying leap, so of course MS is there to "restructure" the licensing deals. But is this MS's fault, or is it the fault of the OEM's for being greedy, and getting burned by it. Depends on your philosophy on life I guess: Is it the drug dealer's fault for selling crack, or is it the addicts fault for trying it?
It hurts when I pee.
Other monopolies (Verizon, the local water company, etc) aren't allowed to cut off good-faith customers. Your power company can't say, "You have to buy our skateboard and milk, they're bundled with our power!" Your local telephone company can't say, "We'll double the price of your phone service unless you stop using any competitors products!"
Microsoft is a monopoly just like the others, and to most businesses, Windows is as essential as power or telephone service. Microsoft should not be allowed to withhold Windows from them or vary the price based on how much they subjugate themselves.
(Volume licenses are okay, though)
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Mod up a post Rob doesn't like and you'll never mod again
Look around you. Some establishments will only sell Pepsi while others only sell Coke.
You have no way to obtain phone, power or water without the utility (government regulations see to that). You can always obtain an OS without Microsoft.
For most businesses, "an OS" is worthless unless it's an OS that can run their stuff. Microsoft doesn't have a monopoly on the operating system market, they have a monopoly on the "operating systems that can run Win32 applications" market.
Your argument is like saying, "You can always power your business with steam, or hydraulics."
Also, there is no way Gateway could be competitive if they had to pay full retail price for Windows. The profit margins are razor-thin in the OEM business.
So Gateway has two choices: do whatever Microsoft demands or go out of business.
That last part is the crux of my argument; if you reply, you should explain why it's okay that Microsoft can demand whatever they want from OEMs, and the OEMs have no choice but to obey.
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Mod up a post Rob doesn't like and you'll never mod again
One possible solution to the problem - let Microsoft "innovate" anything they want into the operating system, but prohibit them selling the OS to OEMs for a period of ten years. Just cut the relationship entirely - it's the ultimate leveling of the field, and removes all leverage that Microsoft has on the OEMs.
OEMs would be free to sell machines with other operating systems, or none at all. Consumers would be required to buy Windows separately and install it themselves should they prefer that to whatever non-Microsoft OS the OEM preinstalled. This would also halt the other trend that MS and the OEMs are promoting - a lack of recovery disks.
I think you'd see the following happen: Apple would immediately release an Intel version of OSX, since the business suddenly becomes interesting to them. RedHat, Mandrake, Lindows, and other as-yet unformed companies could raise the capital to make consumer friendly versions of their offerings.
If you really want to get Draconian, use Microsoft's own arguments against them. They claimed that Netscape still had full access to the market via Internet downloads - so force them to offer Windows exclusively in the same manner.