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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."
I would love to see what Dell has to say about the OEM agreements with MS. After all they did support Linux for a little while. Now that seems to have gone by the waist-side. I also wonder what the reprecussions of Gateway speaking out against MS.
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.
I've always known this was true, but now we have a REAL company vouching it..but how does MS do it? Do they send goons in and say "if you don't install Windows we will break your legs?" I mean, how is this different from racketeering? The Mafia does that in major cities with Waste Management. You can only use THEIR company, or they break your legs or set your building on fire. WHich is very similar to how tings work in Eastern-bloc countries.
If you're not a Liberal in your 20's, then you have no heart.If you're still a Liberal in your 30's you have no brain.
talking about this like its new news? It's like every three months people forget and have to report it again. This has been constantly reported since at least since 1997.
This is why I think there's some kind of mind control going on in the windows OS environment that keeps people from remembering this story. Thats why only alternate OS (Mac Linux etc) users really remember it month to month. Oh well, I guess it gives C-Net something to publish.
Witness the rebirth of ENRON!
tcd004
Testimony like this and Michael Tiemann's puts lie to the MSFT propaganda about how consumers made them the multi-billion dollar owner of 90% of the market.
It's pretty plain that consumers have *never* been offered a choice. No "market" for PC OSes ever existed.
"Uh, your honor? We'd like to delete this testimony since it makes us look guilty. We're really not guilty, so you shouldn't allow anyone to intimate otherwise."
They're pretty dumb if they thought they were going to get away with that. Once has to wonder what will happen to Gateway now... I think MS will take the cow boxes to the slaughterhouse while they still can.
There is no sig, there is only Zuul.
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."
The basic message is that MS can't do Jack Shit to OEMs, except of course to force them to pay the proper price for Windows licences, and not receive
any bonuses.
This would make the OEMs less able to compete, price-wise with their fellow scum-sucking OEMs.
Well, boo hoo, why should I care what happens to these unscrupulous box-shifters?
Look at the facts: extended warranties of doom, badly-configured machines with the wrong drivers installed, corners cut to keep the price down (Tom's did a thing on OEMs recently, pointing out that they like to push the main specs like Pentium 4 1.8!!!! And then not mention the crappy $15 video card etc., which is true), help-lines that don't even when you get through to them, incompetence on all levels....
Plus, just think- these OEMs aren't doing anything to earn their money- just employing people very little money to assemble pcs, man help-lines etc.
I know I am going to get modded down as -1 flamebait for this because The Common Man moderates, but seriously, to paraphrase Monty Python: "What have the OEMs ever done for us?"
graspee
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?
For those who have not read it, I would suggest reading Sony's comments regarding Microsoft's licencing of Windows. This is from Sony's submitted commments to the Microsoft Antitrust case. If you think being an OEM and having to include Windows on every PC is bad, imagine being an OEM and knowing that it is possible that "Microsoft [could] use its monopoly power to force its OEM licensees to give up intellectual property rights."
slashdot!=valid HTML
Looks like Bill Gates and Co. are going cow tipping tonight...
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)
--
Mod up a post Rob doesn't like and you'll never mod again
Does your grocery store endorse Pepsi when they sell Pepsi? Do you find that their "endorsement" has less meaning when they also sell Coke in the same aisle?
I guess I don't see the "endorsement" angle here - retailers like Gateway or your local grocery store aren't endorsers of anything; they just stock what the public will buy and advertise it all.
Your right to not believe: Americans United for Separation of Church and
Look around you. Some establishments will only sell Pepsi while others only sell Coke.
There's a HUGE difference between Microsoft and Verizon.
One is a monopoly that was granted by government fiat. A natural consequence of that is that the government has the authority to regulate it and impose restrictions. Verizon didn't build its monopoly by building a unique business model or providing unique service. Its monopoly was granted to it by the government.
Microsofts "monopoly", on the other hand was built without government assistance.
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.
Also, Microsoft was not cutting off the supply to Gateway. It was not "raising" the prices either. Gateway could always buy Windows at the full retail price at the time of retail availability. There is a cap on the price which is the retail price - a price at which several million people buy the product.
Are you trying to say that because Microsoft has this "monopoly" that it owes the government nothing for, it should be required to offer a discount to Gateway just because it asks for it?
Mmmm.. Donuts
The problem is that there is no free choice. It is not a matter of "sell only Microsoft OSes, and we'll discount you", it's one of "sell only Microsoft OSes, or we disallow you *any* sale of Microsoft OSes." Now, Microsoft is an acknowledged monopoly - no suprise there. An OEM *needs* to sell Microsoft products in order to be competitive. No issue, thusfar.
What Gateway is testifying to is that it's not fair for Microsoft to impose a blanket restriction upon them (via their OEM license agreement that allows them the ability to sell Microsoft products) which prevents them from selling other alternative operating systems at the same time that they are selling Windows. Such a tactic is an unfair leveraging on the behalf of a monopoly. It's legal for Coca-Cola to do it, for example, because there is a definite alternative - Pepsi. Neither are a monopoly. It isn't legal for Microsoft to do it (allegedly) because of (and due to) their monopoly status. Free choice would mean that an OEM could decide for itself how it wanted to sell its products. When a company MUST have a business model that limits that freedom ("don't sell linux systems or we'll effectively revoke your ability to compete in the current market, which we can do because of our monopolization of said market"), something is wrong.
We who were living are now dying
With a little patience
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.