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.

Comments

Selective discounting?

[newt]

Isn't selective discounting against the MS antitrust settlement?

- mark

This is NO surprise.

[smd4985]

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....

My thinking

[greechneb]

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.

Don't waste your breath, Microsoft

[ekrout]

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.

The sad thing is...

[3ryon]

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.

Lindows?

[jaaron]

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?

How do you get the best price possible for MS SW

[Znonymous Coward]

Read this article for more info.

http://www.lindows.com/lindows_michaelsminutes.p hp

Re:hmm

[BSDevil]

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)...

Warning-this may make takers into targets

[ehintz]

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.

View this as pulling threads in a woven cloth

[nighthawk]

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.

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 /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.

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.