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Linux Spurs MS Price Cuts
jimb writes "Yahoo!
reports:
'What's happening is that Microsoft sales reps have been instructed to be on the lookout for any businesses that are migrating some of their machines to the Lindows OS,' Yankee Group analyst Laura DiDio told NewsFactor. 'If [the sales reps] think there's a real threat of some pretty large numbers of defections to open source, they can request authorization from Microsoft higher-ups to offer steeply discounted pricing."' I wonder how many businesses will now start pondering aloud the possibility ... I'm sure OS X is on MS's mind as well.
Isn't selective discounting against the MS antitrust settlement?
- mark
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I tried an internal modem, but it hurt when I walked.
MS will do anything to maintain their monopoly on the desktop OS (as recent numbers have shown, it provides flexibility in OTHER markets), so you can be sure that they won't feel bad about cutting the price of Windows. In fact, as Linux becomes more attractive, there will be more pressure to drop the price to 0 (zero). Any other price and they stand to lose their monopoly, which is worth more than a few measly bucks per computer sold....
smd4985
Since I recently heard that microsoft could sell windows for around $45 and make a profit (I think that's right), if they really want to make sure linux doesn't take over, knock the price of windows down. More people would be willing to buy windows xp if it was $50 rather than $200. I know they want to make a big profit, but I think if they got more sales (by discounts on prices) they would have more volume. But what do I know, I'm not a marketing analyst.
I've already converted three business over to a stricly Linux platform on the backend. I converted, in total, 120 servers over to Linux from Windows NT, saving the companies thousands and thousands of dollars in the process.
No 20, 30, or even 50% discount could have changed the minds of the CTOs for whom I worked. Now, all the mail, Web, etc. servers are running Linux, and these companies are happier than ever.
If you celebrate Xmas, befriend me (538
that business use this tactic all the time. I'm sure we all wonder if all these foreign governments are seriously considering Linux, or just trying to negotiate better prices from Microsoft.
It's odd that Microsoft would admit to being willing to lower prices if someone happens to bring up the name, though. Maybe they're feeling bad about the "Licensing 6.0 won't raise the price you're paying" lie. Probably a lot of AP departments are now asking MS why they posted their biggest quarter ever once it was institued if it wasn't a net gain for MS.
Kind thoughts do not change the world
I once heard, that if MS wanted to, they could cut the cost of Windows to free, and they would continue to generate large sums of income owing from the Office Suite, Server Suites (Exchange, SQL, etc). I think they were speaking of the desktop- home.
That's pretty impressive to me. But it reminded me of the IE and Windows thing. Tie them down to the apps, and they are forced to the OS.
They stuck me in an institution, said it was the only solution, to...protect me from the enemy, myself
I've been following the Lindows product since it's first annoucement, but I haven't used it at all (I'm not willing to pay $99 for beta-open-source-software [especially considering the high quality of many other distros]). It surprises me that Lindows rather than RedHat or Mandrake or even Lycoris is causing all the fuss. My impression has been it's a distro [or I should say a CEO named Robertson] that makes a lot of noise but isn't necessarily the best out there. Some might argue that making noise is enough. Perhaps it's enough to get MS and the press to notice, but if the product's crap, then the businesses and users who switch will be return to MS's camp quickly. Anyone using Lindows willing to point out how great it is or isn't? Does it really have a chance?
Who said Freedom was Fair?
...should go to M$ and see if M$ will "undercut the competitor's prices". That way, they'd get money from M$ to remain on Windows.
Whether that's a true savings or not is left as an excercise for the reader...
http://www.lindows.com/lindows_michaelsminutes.php
Really? Maybe. The Xserve has gotten some attention, sure, but I think WinXP has solved Microsoft's biggest problem with Mac OS X: both XP and OS X look Shiny now.
I know, I know, Aqua is technically and aesthetically better, but most people don't know the difference. (Emphasis on most people, there.)
When companies start to realize that they can deploy both Macs and Linux with basically minimal fuss between them, that's when things get interesting.
If Jesus wants me it knows where to find me.
The headline says Linux, the article says Lindows all over. Is Lindows the only GNU/Linux distribution they care about?
Do you care about the security of your wireless mouse?
What's happening is that Microsoft sales reps have been instructed to be on the lookout for any businesses that are migrating some of their machines to the Lindows OS,' Yankee Group analyst Laura DiDio told NewsFactor.
I don't believe it. Lindows has gotten a lot of hype, and even some positive reviews, but I have not gotten the impression it's made any impact yet. (OK, maybe I do have some information -- reading KDE bug reports, mailing lists and help channels, I've never seen a single person using the KDE-based Lindows.)
Either the author confused "Linux" with "Lindows", it's another analyst shooting off her mouth about something she read a press release about or there's some financial connection to Lindows.
What I'm listening to now on Pandora...
Read this article for more info.
p hp
http://www.lindows.com/lindows_michaelsminutes.
Karma: The shiznight, mostly because I am the Drizzle.
And those other companies? They do the same things when customers start getting evil thoughts of moving to Microsoft. Or one of the other companies, ad nauseam.
It's called "business". But it's not "news".
Wouldn't that be a 0% price cut? They do sell (and charge quite a bit for) pressed copies of Redhat, Suse, etc. I am on a modem currently, so if I needed a new version of Redhat for my linux box, I would be forced to go buy it (and pay quite a bit for free software).
Wait, so all I have to do is tell my Microsoft sales rep that I am thinking about switching to Lindows, and I'll get a 50% price cut? Yay! Windows XP for $50. And Office XP for, umm, $250!!
Undercut?? Undercutting is when you sell something for below cost so that the competition cannot compete at that price.
This is not undercutting by any stretch of the imagination since they're competing with free.
MS can't win on Slashdot. If they raise their prices they get accused of being a monopoly and abusing it. If they lower their prices they get accused of "dumping" and undercutting the competition.
Mmmm.. Donuts
Isn't that what they do at most Universities? Take the kids who would pirate things like VS.net, give the full copies for free in academic non-commerical licences, and get them hooked so that if they ever wanna do something commercial with it they've gotta shell out for the full version (because it's all they know how to use)...
Cue The Sun...
Specialized price cuts are strictly prohibited by order of the government of the United States of America.
No they aren't!
There, now our "must be fact because it's bolded" statements have nullified each other. Seriously, either Yale Law School is turning out bad students, or the law is so rediculously misworded that no one could even attempt to understand it. The settlement, in my rendering, appeared to put certain limitations on a) the kind of specialized price cuts and b) a limit on price cuts to certain OEM's. However, this issue is not about OEM's selling to consumers, it's about CTO's making educated decisions. It's a totally different ball game.
There is no longer anything that can be done with computers that is nontrivial and clearly legal. -- Paul Phillips
What exactly are they discounting?
I though the price stays the same, but you have a longer period to pay for it.
Does anyone know exactly how much a 3yr SA license for XP Home costs?
If companies realize that the ticket to getting lower oem rates is to sell computers with lindows or any other linux distro preinstalled, there will be more retaillers doing exactly that, if only to take advantage of the price breaks. This means they'll be on the shelf and people might buy them.
I've noticed lately that Fry's has started to sell a system with some distro of linux pre-installed, complete with free versions of every office based application imaginable, for a grand total of $199. With that low of a price, there might be some people who buy it just to find out what this whole linux thing is all about. Microsoft might be giving other retailers an excuse to do so as well. So let them shoot themselves in the foot if they want to.
-Restil
Play with my webcams and lights here
Last year MS sent me some happy-ass brouchure asking for info about what platforms we use so they could "better serve us". I replied that we use linux everywhere except the desktop and we're trying hard there too. Basically, told 'em to piss off and die, but politely. The very next day the sales rep called up and said they wanted to enforce the clause in our Office 2k site license that says they can audit us whenever they damn well please. Coincidence? Maybe. But I don't buy it. We're pretty good about keeping licenses up to date and all so it wasn't like the audit caught us with our pants down or anything, but it was a massive waste of time and effort. Lesson learned: when dealing with MS politely decline offers but don't mention why; do whatever is needed to avoid turning one's self into a target for the software cops. 'Tis far better to stay under their radar.
ehintz
The net impact on MS's bottom line from a few sites holding out for discounts will be negligible. The precident this sets _could_ be monumental. Hidden in the pricing of any product is the message that the product is worth the price. Any time the seller fiddles with a price, they erode the value of the product. If 1% of the population gets the product at 50% off, and everyone else knows it, most of the population will see the product as overpriced for its value.
/or employees, a ~40% fraction of their shareholders start dumping stock. All employees who don't dump fall back to the middle class. Big time employee dissatisfaction.
One of the hidden messages in the Linux Meme is that the retail price of world class operating systems, and office suites is $0/copy. Imagine the price erosion on cars if there were free ones available.
The existance of Linux/Lindows has pulled at a thread. MS's cash cows are OS's and Office Suites. (kinda funny how this is the area of recent attack by the Open Source Community:-).
If MS's margin of profit on these two areas falls, then all their business plans are threatened. If these areas are only marginally profitable, the natural condition in a competative market, then there is little cash left over to preditate other areas. If cash is tight, them MS can't afford the current level of post sales support. That will hurt in the long run. If their cash reserves are depleted in the fight, then their stock price could fall. If the stock price falls, then the options which they pay their employees becone worthless
Here's the Meme, the talking point: The fair market price of world class OS's, Office suites, web servers, Mail Servers, RDBMS;s etc is $0/copy.
Find a loose thread, pull it.
However, my family uses Windows. Most of my friends use Windows. Have I mentioned Linux? Of course. Have I forcibly converted them? Absolutely not.
Don't get me wrong -- Linux evangelization is a great thing. People should know that better software exists. But I simply don't understand the rationale of people who want to see Linux on everything. Frankly, I like Linux the way it is (was) -- almost an 'elite club' of computer geeks. I'm not implying that we shouldn't let people use Linux, or that we should keep it a closely guarded secret. I just don't see why we think that my grandma should run Linux -- yes, it can be very easy to use. But what does it matter if she runs Windows or Linux? Her box came with Windows, and it still runs Windows. Today, if it came with Linux, it might run Linux, but if it came with Windows, it would also run Windows.
The point of this lunatic diatribe is this: I think we should 'evangelize' Linux to some extent, but we should really rethink the "Linux on everything!" approach -- do we really want millions of people using Linux? (Applogies if this sounds like a troll, or some sort of insane rant... But I'm trying to pose a serious question.)
________________________________________________
suwain_2
I don't know of any large enterprise that is worth dealing with for Microsoft would actually use Lindows.
/etc/passwd remoteserver:/etc'), not enough clustering and fault tolerance support, poor choices for centralized management, etc.
When you care about your business, you don't buy a crescent wrench to use as a hammer. Any business in their right mind that relies on Microsoft software is going to run that software on Windows.
I wonder if this article was written by an armchair Linux enthusiast with the ever infamous penguin tunnel vision. Linux is great for workgroups and closets, and it absolutely sucks in the enterprise. No decent distributed user store (OpenLDAP is NOT decent for production enterprise environments, nor is 'scp
Job isn't in their market and it doesn't interest him in the least.
M$ is starting to see defection to Linux and resistence to their subscription schemes, flat or negative PC sales as good enough is good enough for users.
It doesn't help sales that all of the bells and whisles M$ is bundling into the OS are things that businesses definitely don't want their employeer playing with at work and most PCs are owned by corporations.
People are scared to upgrade even more than they are of getting viruses. As Linux gets more respect for security and M$ slowlky strangles users' machines with unused feature-itis the desertions will accelerate.
Since M$ has always assumed that revenues would always grow and all of their financial planning is based on this fallacy. Meanwhile hardware sales are in replacement mode (flat) and upgrades are meeting solid walls (negative territory.)
Revenue will crash at some point and M$ has no real assets compared to manufacturing companies. The X-Box is a money loser. Their partnerships are non-producing. The competition is getting tougher. Users are getting fed up. The economy sucks and price points are getting too tight to keep a resource hog like M$ in business. All things being equal, like admin costs... Linux is free acquisition.
When the end comes, it will be stunningly quick.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
I think Microsoft's efforts ultimately are futile. But, nevertheless, they are trying hard: Palladium, proprietary media formats, proprietary document formats, exclusive distribution agreements, non-PC hardware (X-box, Mira, TabletPC, PocketPC, etc.) are all attempts at excluding open source. Add to that some heavy political lobbying, PR, monopolistic practices, campaign contributions, and who knows what other sleazy efforts. With that, they have had some modest short term successes.
50% discount? Congratulations you will only pay a 350% markup. Gouge them at cost price, and it's about 13% that you should pay, or 87% discount. Of course, this only has an effect if everyone gets that same discount.
Now, I'm probably about to go off topic. And I am not proclaiming to be absolutely right, or that this is *the secret to making money* and I am not some sort of left wing/right wing/nazi (no offence to those who are) but there's a lot of businesses that practice these principles - maybe even you. The 'ancient art of war' for making money goes like this:
Why do this? Well, if all your costs are fixed, and you make $1 extra in revenue, then that is pure profit.
Think of your employer as a customer for a while. The equivalent, from your perspective, to what most software companies currently do (sell upfront, support @15%) would be to take $150K upfront and get $7.5K per year to work for 3 years - assuming a salary of $50K. Now, I would take that in a second for the same reason I buy lottery tickets for cash value. The time value of money. With a few choice equivalents to the EULA ;-)
But for software companies, they expect -and want- people to come back and buy again. The equivalent for you is that you *want* that company to 'hire you/pay you multiple times' during that 3 years and then at the end of the 3 years. IE, you could earn multiple salaries during the period and get hired all over again at the end of the 3 years. But of course, from the company's perspective, in the meantime, the sales people have b/s'ed the customer to get their commission, the professional services people have screwed things up and the product group doesn't deliver. What do you do in a similar situation? The analogy to the company again? You get fired. And you can bet that you can't keep that money as *you* weren't 'fit for purpose'. The company is going to hire someone else.
Now, there's a fair bit I didn't spell out here clearly, because it makes me sick that the easiest way for MS to bulletproof strategy is to post something on /.
But if you can turn MS' fixed costs into variable costs...
this.end_of_rant();
author.do_beer_refresh();
So does Anonymous Coward have good karma?