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OSS Officially On Microsoft's Financial Radar Screen
seldo writes "More news from Microsoft's latest quarterly filing: according to eWeek, Microsoft says it may have to lower its prices in response to competition from open-source software. From the filing: "To the extent the open source model gains increasing market acceptance, sales of the company's products may decline, the company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline". This is a fairly major revelation from Microsoft, and if it happens, it may be one of the biggest wins yet for open-source software: what do you know -- competition works!"
Before the muppets start talking about products can't compete with free, remember support costs, staff costs etc etc.
One element on margin is that it is estimated that Microsoft work around the 30% mark, while IBM work around 7% and are booking multi-millions in association with Linux. So this means that Microsoft will be reducing their margin, not becoming unprofitable.
An Eye for an Eye will make the whole world blind - Gandhi
PR... nothing more than PR...
It's not that they're wholly unaffected by the advance of Linux, but this statement should be bundled with others they use to show that "We have brutal competition... really!"
It was about time.
The thing that pushes ppl to Linux and Open Source is the price. Depending if MS lower its prices too much, it may cause a lot of ppl not to consider OSS software at all.
Who would want use and a disgruntled OS if they may get nice box, nice gradient buttons, stylish consistent GUI for a reasonable price?
Maybe it forces OSS software to evolve from merely copying proprietary functionalities to actually improve users' life in order to make a differentiation. A reason for ppl to use it. For now, it's price.
Microsoft has to put everything they could possibly think of that might conceivably cause the stock to go down even slightly in there, otherwise they could be held liable by their stockholders.
So while it's certainly nice that they finally have to publically announce this as a possibility, it really doesn't mean anything. I've seen some wild things in quarterly and annual reports.
-Todd
"The details of my life are quite inconsequential..."
This is a fairly major revelation from Microsoft, and if it happens, it may be one of the biggest wins yet for open-source software: what do you know -- competition works!"
...Now if Microsoft interpreted the OSS threat the way they should and decided to counter it by open sourcing their stuff... THAT would be a major win for the OSS (by definition)!
Sigh. Since when was lowering Microsoft's prices a major objective of OSS?
This is *not* a big win. Contrary: it reduces the perceived difference between OSS and MS from a consumer's perspective and may even force Linux vendors to lower their prices and thus reduce their revenues.
This is really quite analogous with what happned when MS's cheaper solutions began to eat the Unix market from the workstation up.
At first, MS's main advantage was price, but gradually they innovated(*) and re-engineered so that their product was always high enough quality to attack the next layer up -- from word processing platform up through file/print server to heavy-duty servers and workstations.
Now MS are being eaten from below by a new generation of even cheaper systems. Like early MS systems, these open source offerings are both derivative and weak except for their price advantage. However, a price advantage is enough to secure a foothold, and over time open source systems will be strengthened and will begin to innovate and will be able to take over better and better MS-held markets.
In about 10-15 years, the cycle will probably start again, taking us another step further from the days of monolithic systems and proprietry hardware/os/support lock-in (which is where we were at before the Attack of the Killer Micros, young'uns). It's all good.
(*)Rather than freaking out and writing posts about 'M$' and so on, why not go outside and get some fresh air?
Whence? Hence. Whither? Thither.
Despite all the comments on here about Slashdot readers, their Mum, Dad, Grandmother, Aunt, Uncle and kids using Linux on the desktop - I don't think the desktop users are making any significant decreases to sales of Windows XP just yet.
A year down the line though, who knows ...?
Avantslash - View Slashdot cleanly on your mobile phone.
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Runs (nearly) all desktopsoftware, because they have 95% marketshare.
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Support people are easy to find, because they have 95% marketshare.
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If you hire new people they are already familiar with it, because it is so widespread.
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All consumer hardware supports it, because it has 95% marketshare
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OEMs preinstall Windows because it is so widespread.
All advantages of Windows vs. Linux are a result of it's domination. If you take that away, Windows is dead. The OSS comunity can write most drivers for thousands of different devices and architectures. - Microsoft can't even support Alpha without hand-holding from Compaq, never mind write all the drivers for all those devices!No. There will not be a lasting coexistance between Windows and something else. Windows will die within a few years once it no longer runs on the majority of desktops.
The pressure on Microsoft is getting bigger. Every year PCs become cheaper and the Microsoft tax represents a bigger and bigger share of OEMs revenues. They have just raised the cost for their corporate customers.
The question is, where shall all the revenue come from? Nobody really needs any MS Office version newer than Office97 and nobody is really excited about Longhorn or however it will be called.
Microsoft knows that they are doomed (that's why Bill Gates and all the other executives with a clue sell thousands of shares each month) and that it's right now just a matter of how much they can milk out of their customerbase.
This quote appears on pretty much every "MS is scared of linux" article and has long since ceased to be "insightful".
Can we drop, it please?
I couldn't care less about the price, and I think the majority of OSS users isn't motivated by the low price. Hell, I can get windows for free just as well, just talk to my l33t h4ck0r neighbour kid and ask him to burn me a copy. The price argument is old & tired: get off it!
Even companies don't or shouldn't use OSS for it's price; dozens of researches have shown that the TCO (total cost of ownership) for windows and e.g. linux don't differ that much. They should use, as should individuals, OSS because they believe in the OSS philosophy and because the OSS style fits their own style of computer usage.
For me, it's about these things:
- From kernel to application, I can see exactly what it's doing and why
- If it doesn't work the way I like it, I can change it or try to find someone who already has
- I'm not a newbie, I know computers and I don't want to be treated as such
- If the configuration changes, I want to be the one who does it, not the OS itself
All these things add up to a package microsoft can't compete with, even if it would cost me more, not less that propriety software. And I wish everyone would stop hoping every last computer user starts using OSS, because it's just not going to happen, and it's just not necessary. Some people want ease-of-use, and others want power. Just so.
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"The chances of a demonic possession spreading are remote -- relax."
I am unsure that this is a good thing. I think you all should be a little skeptical too.
Why does anyone want to see Microsoft go down the tubes?
Sure, they have been overcharging us for their OS and office software for years, but it isn't like the money didn't go to good use. After all, most of the features that we see in OpenOffice and other useful apps for Linux came from ideas that were original or at least perfected (I use the term loosely here) in MS apps.
Sure, I love the GNU project, Linux, and OSS in general, but would we even have a target to hit with our free software if we didn't have a company like Microsoft to chase after?
I hate to see the mob mentality take over with this 'Linux vs. Windows' stuff rather than contemplate what a collapse of Microsoft would really mean to us (as developers, users, etc.)
If it's not one thing, it's Steve's Mother
Businesses are willing to pay for value delivered. They are not, however, willing to be raked over the coals, especially by someone who is making the profit margins that Microsoft makes in an economy that has everyone else scrambling to make a buck.
Add in the costs of continual upgrades -- required by Software Assurance, BTW -- and the hardware to support them, and the lost productivity due to bugs and security flaws, and we have some unhappy campers out there.
OSS alternatives mean that Microsoft will have to lower prices, probably to a level lower than pre Software Assurance days. Customer anger and memories mean that it may not be enough to keep some of those customers from going away for good.
...It may just kill off a lot of the incentive for people to switch to Linux.
/. are pretty experienced computer users, people who are willing to spend the time to carefully tweak Linux to their own satisfaction and spend the time to chase down proper Linux hardware drivers.
What would happen if Microsoft suddenly cuts the pricing of a legal copy of Windows XP desktop editions by 50% or more for everyone? Because Windows is vastly better-supported in terms of hardware support than Linux, sales would definitely increase quite a bit.
Yes, Linux is cheap when you get the personal edition distributions, but when you have to spend time to tweak it to support the latest hardware, plus the fact a lot of the latest hardware lack Linux drivers, the result is a potentially frustrating experience for non-experienced users. I think a lot of people don't realize that many of the posters on
What advantages has Windows over Linux?
Simpler setup with very few questions.
Smaller more focused set of default applications
Simpler, centralised, graphical configuration tools
Convenient, standardised help system with excellent searching and troubleshooting options
In built support, from time of consumer device launch, for peripherals and card types (PCMCIA, USB etc. - Linux got late to market here).
Advanced tools are hidden from basic users.
System files are protected from inadvertent change.
System rescue tools provided on disk (while Linux may die less frequently, when it does there's NO WAY for Joe User to recover).
No confusing messages on startup.
Linux has MANY advantages over Windows and is a technological marvel in some ways, but the sooner people realise Windows *is* better in some departments, the sooner Linux will start to catch up in those ways.
I adore how cute it is when some FUD is propagated on Slashdot, and soon you can hear it being repeated verbatim as stone-cold facts time after time by Slashbots.
and then go on to chatter about keyboards and Visual studio. Can you reasonably compare the proffit bassed on M$'s O$ to keyboard sales? The price of VB may pain individuals who cling to M$, but that individual pain does not collectivly match the vast revenues had when big dumb corporations stick Office on every one of their 7,000 peons desks. No, it's true that M$ is using it's O$ monopoly rent to get into other areas.
The fact is that there is nothing new here but failure. M$ gets into each new market the same way, by dumping . The used IBM to make an O$ monopoly then dumped Windoze 3.1 to establish a desktop hegemity. They then used anti-competitive agreements with vendors to keep other O$ out and dumped their office to make familiarity. To this day M$ dumps their software on schools, then turns around and screws them in quater million dollar BSA raids. Their reduction of prices of their vastly inferior "server" software is par for the course but it will not be enough this time.
People are realizing that free makes economic sense. They are starting to see that free software is better software and always will be. Better software does make for a lower total cost of ownership as it eliminates the intentional waste propriatory software vendors are famous for. More importantly, it does what YOU want it to do rather than what some marketdroid thinks it should do and it does it according to best practices. Slammer, Code Red, Nmedia, SirCam, I love you, Klez, la te da te da, the list goes on and on because the closed source, rape the user method does not work for anyone but the vendor.
Friends don't help friends install M$ junk.