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For Microsoft, Market Dominance Isn't Enough
chemstar writes "Last summer Orlando Ayala, then the top sales executive at Microsoft Corp., sent an e-mail titled 'Microsoft Confidential' to senior managers laying out a strategy to dissuade governments across the globe from choosing cheaper alternatives to the ubiquitous Windows operating system. Ayala's e-mail told executives that if a deal involving governments or large institutions looked doomed, they were authorized to draw from a special internal fund to offer software at a steep discount, or free, if necessary. Steve Ballmer, the Microsoft chief executive, was sent a copy of the e-mail.
The memo, which focused on system software for desktop computers, specifically targeted Linux, a still small but emerging competitor. "Under NO circumstances lose against Linux," Ayala said." Perhaps that's because, as roomisigloomis writes, "Seems that MS' licensing practices are working against the company," pointing out this article which "suggests that open source, Linux and other software is actively being sought."
This memo demonstrates an important shift in their strategy: they are now in a position where they are competing against Linux on thedesktop, having lost many key battles on the server side. This means that, despite religious crusades and many rifts in the Open Source community, the competition between such projects as KDE, GNOME, and XFree86 has produced better products that are now able to compete on a level playing field with the Windows XP desktop. We know this only because Microsoft said so itself.
Eight years ago when I first started running Linux, I knew it wasn't ready for the desktop. During the internet gold rush of the late 1990s I knew it still wasn't ready for the desktop. But today it is. There is no turning back now - unless Microsoft manages to lock us out of our PCs they will have no chance to reverse the tide, and Windows will lose in the end.
Its illegal in the Unisted States, and probably many other countries as well. However, it may not be illegal in all countries FWIW.
Great Linux Site
If I recall correctly here in Canada at least it's illegal to sell your product below cost with the purpose of driving your competitors out of buisness. Now this is also traditionally very hard to prove expecially when you take annual licensing costs and support into the equation, and I guess the competitors would have to be some of the distro vendors (Redhat, Mandrake, etc.). Do other nations (US and European nations) have similar laws that might come into play here?
I stole this Sig
The rules change once a court has declared you an abusive monopoly.
A Pirate and a Puritan look the same on a balance sheet.
Actually, the greatest irony about it all is that these ads help support Slashdot -- a public forum known for its big share of people that don't support MS. So I say take the ad money, smile, say thank you, and walk away.
I really don't think this is so much about MS being successful, as we know it is, or about the quality of the product they produce, which we know is crap (got your latest IE security patch loaded?), but the fact that MS does it's absolute best to keep any competition from emerging. The IE/Netscape, Realaudio/Windoze Media Player, and Linux debacles all point to a monopoly that will do literally anything to avoid competing directly with other vendors. If they think you have something good, they buy your company out. If you won't sell (aka Netscape, Real Audio, and Eudora), they crush you by writing a compatable but 'extended' product and giving it out free. A company with this kind of control is unstoppable. They are now extending their reach into media (MSNBC, MSN, etc), hardware, and anything else they see as profitable. With billions to play with there aren't many industries that can survive an onslaught by MS. The government really missed the boat when they didn't break them up this time. After numerous other anti-trust infringements MS now has pretty much free reign to do as they wish.
And those are the steps of the passive resistence:
2. ridicularize - they ridicularize the resistence as if it would avoid more people to join the movement
3. worry - they worry and notice that it is really a problem, but it could be easily avoided.
4. fight - they fight against the resistence with all its power.
5. lose - they lose the battle and assumes that they must live with the new reality.
That's the way it has always worked, from Gandhi to Luther King. All we need to do is keep living our lives with Linux (and FreeSoftware).
-=-=-=-=
I know life isn't fair, but why can't it ever be un-fair in MY favor!?
Did someone say Wal-Mart? Dell? Home Depot? Without a Linux axe to grind, Microsoft looks to me like any other large corporation. And while I'm at it, could someone please explain how 'M$' is an insult?
Also, most of us can easily imagine Microsoft salespeople approaching cash-poor, needy, developing nation government ministers with their "The first ones free" pitch, only to come back later when the government has set up some mission critical application and announcing "Time to pay the piper" .
You can't bid lower than zero! Even if Microsoft gives their software away for free, you still have to figure in the time and money you'll have to spend dealing with VBS bugs, SQL Server bugs, DRM bugs--oops, that's a feature--and so on.
I don't think this strategy is anticompetitive, since Linux is free (beer); but I also don't think it will be all that helpful for Microsoft, even in the short term.
!#@%*)anks for hanging up the phone, dear.
So what's the surprise about this? Given the recent SEC filing, there's no surprise.
A significant step will be if MS decides that Linux is enough of a presence in the low-end server market (the one they're desperately trying to enter so there is some genuine growth of the company) that they decide to forgo the double leveraging strategy of tying products like SQL server, Exchange, and perhaps some parts of .NET so tightly to Windows. You know, like come out with a Linux version of these products to gain market share for them? If Linux keeps growing, then this will happen some day.
Secondly, the variable pricing strategy of Windows and affiliated software has already been in effect overseas: it's considered so damn expensive that illicit copies are endemic. Another way of viewing it is that people willing to pay zero dollars but pay the hidden cost of enduring the risk of running illicit MS software (what that risk really costs is a matter for insurance actuaries).
Those warez users have already made their own decision, with MS out of the loop, about the discount they want and what they are willing to pay for.
Furthermore, if MS clamps down tightly on "piracy" via more sophisticated technical measures, then they may end up losing this base of warez customer that just might possibly in the future begin sending money towards Redmond after they've become addicted to MS ware.
It's all very strange.
"Provided by the management for your protection."
I once had a RH "support rep" send me an email with an attachment with technical info on how to make a particular IDE controller card work under RH6 that included the phrase "if you were an idiot and did 'x', then this is how you blah blah blah...".
Would not being insulted count?
In the 70's, there was a phenomenon known as, IIRC, the $30,000 coffee mug.
Essentially what happened was Hitachi was offering a much cheaper alternative to one of IBM's mainframe products, and when Hitachi salesman came by to give their bids, they'd give managers a mug with a Hitachi logo on it.Managers soon discovered that if they had this mug on their desk when the IBM saleman came in, said IBM salesman would lower the price of the competing product by $30,000. Hence the $30,000 coffee mug.
We all know what happened to IBM's market leading position shortly after this. And now Microsoft is on the same path.
In fact, it looks like they're quite desperate. In Ghandi's "first they ignore you, then they laugh at you, then they fight you, then you win", we're clearly well into the "they fight you stage".
"Then you win" is not far behind...
Follow the adventures of the new wandering jews
What support? MS requires you to PAY for technical support. Their web-site is extremely user-unfriendly, a real PITA to get useful information out of. In the end, if you want support for Microsoft software, you pay for it in the form of a Full-time Employee who supports your network, or by buying "Per Incident" support from MS.
What stability? There's a new "Security Patch" issued every two days that must be thoroughly tested to insure that it doesn't bring the entire office down in flames. (See story about Win 2k/XP patch from last month that made even the fastest machines crawl.)
While OSS doesn't eliminate the need to hire an FTE to support your network, it does drastically reduce your licensing expenses. In our office we just build the cost of licenses for MS software in the price of any PC we buy because otherwise the departments would bitch a blue streak about how much "extra" all that "Included" software costs them. (I know this because we used to break it down for them, and three times annually some manager would pitch a bitch about how "IT Should Be Paying For My Licensing Costs".)
Who did what now?
On the licensing front, it's more like the mask is off. M$'s recent licensing was every bit as bad as the "zealots" and other free software advocates have said it would be all along. The Next Generation looks even worse than all but the most paranoid visions could predict. There, bare faced, is the power hungry monster we all worried about. It's not easy to force that on forgien governments and others who have considered things.
Friends don't help friends install M$ junk.
Companies aim to make as much money as possible -- excluding not-for-profit & charitables -- so why should anyone be surprised that they do anything within their power to make their software as widespread as possible?
Yes, but to do this for the long-term requires a modesty that Microsoft seems incapable of. Business is always give and take to make sure the customers willingly come back. Microsoft, on the other hand, is pretty much just take-take-take, where customers come back willing or not.
Healthcare article at Kuro5hin
Don't forget the SCO babez! Everyone loves SCO, right, gang?
How dare a company try to increase its profits and make more money?! How dare a business try to best its competitors in the marketplace?!
I for one am disgusted and only hope that this evil is vanquished!
To aim for increased profits at the expense of the health of the global free marketplace is downright evil, in my book. Microsoft is the enemy of free trade and must be brought under control.
Healthcare article at Kuro5hin
In theory? No. If it leads to greater profits, or prevents the loss of a market or large customer (give the product, sell the service/support/maintenance, etc etc) then, arguably, it's fiduciary misconduct NOT to do it.
On the other hand, speaking from experience, watching my company's stock go from 40 bucks to 10, in an afternoon, now less than 1, STRICTLY because the shareholders didn't like the 'we're investing our profits in R&D so we can show EVEN GREATER profits a year down the road,' you're right.
The stock market suffers from what I like to call Human Game Player syndrome; at some point, somebody stoppped playing the game, and started playing the rules, and now the system itself is useless.
Vintage computer games and RPG books available. Email me if you're interested.
I believe in the long run (the very long run) Microsoft will be forced to become purely a services company. Software will eventually only have "use value" and no longer fake "sale value" as Eric S. Raymond puts it. As a services company they may survive, but not without strong competition from even the little guys. They know that if they can no longer convince people to buy their software they will have to sell themselves out for services, which they know will bring a far lower revenue stream and inability to become a monopoly.
Developers: We can use your help.
We're in the middle of a nasty registered-mail war with them about licencing of software.
As a result, more and more of us are moving to Linux (developers can run whatever they want on their machines, so long as they get the job done). No licencing hassles, and no software-asset-management hassles.
- Your Name
- Your Email Address
- Your Phone Number
- Your Gender
- Your Birthdate
You need this, so that you can login to the open licenses website and aquire your serial numbers. You need to repeat this activity for every new open license that you buy. It's WORSE than the damn license activation in Windows. In addition, I've noticed that you now need to license individual services in Windows Server 2003 (specifically, the Terminal Services service), and then you get to use your Passport account to add "client access licenses" to it. It's no wonder that people are beginning to choose Linux, where you only need to install XFree86-Server and go to work, and never have to worry about having too many clients accessing it at the same time...The wheel is turning, but the hamster is dead.
The British were not willing to kill unarmed Indians forever.
Americans were not willing to see blacks attacked with police dogs and fire hoses forever.
Germans had no problem with killing and enslaving the "lesser races", and did so till they ran out of bullets.
Soviets had no problem with putting "dissidents" into concentration camps in Siberia, and did so till it was no longer economically viable.
All they are doing is matching the price of the software they are competing against, how is that dumping exactly ?
Ah, but there's a difference. Linux can survive in a world where all software is free, but Microsoft cannot! If Microsoft were to give ALL of their software away, they would only last as a company so long as their cash reserves held out (which wouldn't be long considering that their stocks would quickly become worthless). Microsoft giving their software away would delay the widespread adoption of Linux, but in the long term it would be beneficial to us...Linux would still be standing long after the MS behemoth collapsed.
There is nothing so pathetic as seeing a beautiful young theory roughed up by a tough gang of facts.
What competitor?
Redhat
Suse Mandrake
To name a few...
If I remember correctly, those are all business who sell's Linux based operating system.
Direct competitors to Microsoft I would think...
I'd rather be sailing...
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
Um, how would international sales to other governments be bound by American monopoly laws (excluding export restrictions)?
If Ass-stainia doesn't mind MS dumping their products in their market, why should we?
is more than just NT 4. There's also NT3.51, that only I seem to remember. 2000 is really NT5, and XP is really NT5.1.
Software installation kicks ass in Linux. My debian boxes can get all the software it needs online. A single command (or three clicks in gnome-apt) can install/remove nearly any program I know of. If you mean installation of commercial programs, Microsoft seems to have the advantage because of autorun(a security hazard) and not having broken binary compatbility (in theory, try running a V4W app in NT5).
Put the source onto disc with a Makefile and an optional tcl/tk installer. It'll work a decade from now.
You can't judge a book by the way it wears its hair.
Well...
Looking at it the other way, there's no way to get people to use an alternative office package except by giving it away. This is certain proof that MS has a monopoloy in office suites.
Let's stipulate for the time being that this monopoly was legally obtained. What's the differnce between Microsoft giving away its software and Sun giving aways Star Office? The difference is that in one case it will be done to stifle competition and the other case to preserve or increase competition.
So while you can argue that "they are doing the same thing", the effect on the public interest is exactly opposite.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
They don't feel that need. You don't make a billion dollars by being stupid.
They are addicted to the risk. The risk of losing it all. The risk of a bad decision. No adrenelyn rush like it.
"History doesn't repeat itself, but it does rhyme." Mark Twain
Until now, that is. While helping my 16-year-old son (also an avid Slashdot reader) do research for a term paper on technology and journalism, I stumbled across some information that made me change my views about Slashdot completely. In a nutshell: Slashdot, and more accurately, its parent company VA Software, has deep and mutually influential ties to the Microsoft Corporation. In fact, Slashdot's own editors are paid (albeit indirectly) out of the coffers of Microsoft.
Yes. It's hard to believe. At first I couldn't believe it. But a few simple Google searches and 45 minutes' research on Lexis-Nexis (as well as a couple of phone calls to a friend of mine at the SEC) revealed the following:
At first I was more amused than shocked; I mean, the technology industry is notoriously incestuous and its leaders, even those who are in competition, often sit on the same boards and are members of the same organizations. So what if a few board members of Slashdot's parent company are also directors of a company funded by Microsoft? Well, it gets more interesting.
As it turns out, in May of 1999, VA Software submitted to the SEC Form 5506-D, Application for Direct Non-Ownership Subsidization. This is the form that a corporation will submit to the SEC when it wants to directly fund a subsidiary from its own parent corporation. (It's basically a tax shelter for companies with a lot of subsidiaries) The application was approved in July 1999. The applicant name? OSDN. In other words, Form 5506-D basically eliminated the middleman between OSDN and Murberry-Slocomb. Following the money, I now saw that OSDN was being funded directly from an infusion of captal that Murberry-Slocomb has receved from Microsoft!
Weird. I know. But what does this all mean? Honestly I have no idea. I'm not the custodian of any privileged information. A look at VA Software's web site and a Google search is all anyone needs to find the same information that I found. Are Slashdot's staff being paid through Microsoft? I sincerely hope not. But the facts are there and it sure looks like it. More importantly, what does this mean for the future of Slashdot? Can any grain of objectivity or journalistic ethics be preserved? What happens when the company you are bashing, nay, the very company that you preach the loudest against, Microsoft, is the same company that signs your paycheck? Could there be a deeper link still? Who knows. As far as I'm concerned, I'll never look at Slashdot the same way, ever again.
Lost amongst all of the discussion about Microsoft's tactics is a realization that this kind of story may vanish in six to nine months, when Microsoft's Rights Management Server begins selling (and is used by Microsoft itself, no doubt).
Microsoft's RMS, in conjunction with Outlook, would prevent emails from being forwarded or printed by individuals who had not been preapproved by the sender. (And methods like "Print Screen" don't work, either.) Obviously, this becaomes even harder to crack once Palladium/NGSCB takes effect in 2005.
It was interesting listening to the NGSCB presentations at WinHEC. All I heard were MS employees describing how NGSCB would prevent company secrets from being leaked. Given the context of this story, is that a good or bad thing?
For many administrations, the political point of Free Software is clear: no vendor lock-in, spurn local economy and so on. While this works quite well in places like Germany at all levels within the administration, in other areas, where the "Free Software Fever" has only caught partial areas of interest, M$ is doing just what it says in the memo. For example, in Peru.
Last week, Steve Ballmer was in Spain. which some of you might know spurned the Linex Linux distribution (in Spanish), proposed a small autonomous community (a bit like a state, for the benefit of American Slashdot readers :D), which is now being deployed in other autonomouse communities, as seen here.
Steve Ballmer was giving Free Software a bollocing, saying that it was a waste of time and so on. I didn't see the story in /., but it was covered in both Barrapunto (the Spanish-speaking /.), and in some other blogs. Ballmer offered the Spanish government 25 M EUR worth of software (by that, read Windows/Office licenses) for education.
Clearly, M$ is seeing that local efforts can be thwarted by giving 500000US$ (in the case of Peru), or 25M ? (in the case of Spain) worth of licenses. The aim is to stop the local movements spreading, as it is seen in Spain (where other regions are taking interest in Linex) to a national level. In Germany, as the push comes from the top (or so it seems), these techniques don't work.
We'll see where all this leds us to in a few years, tho'...
Don't get me started on the people who use "accountability" in the same sentence as "MS software" ...
Nerd: Derogatory term typically directed at anybody with a lower Slashdot ID than you.
Ok then, what shall we do in 10 years when OpenOffice is the de-facto standard and it comes pre-installed on every machine and has 99% of the market. In that case OpenOffice's price will almost certainly "stifle competition." What shall we do then?
Create a new piece of office software that reads the de-facto standard OpenOffice format perfectly, eliminating any practical need to keep using OpenOffice, because OpenOffice is Free Software.
If it hadn't been for the fact that Microsoft started wielding their market share in ways that made their customers uncomfortable no one would be interested in OpenOffice in the slightest. In this case the market is working just fine all by itself.
Wait... So the OS monopolist abuses that monopoly to gain a monoploy in office software. It then gouges the customers for years, increasing the price of their product while the price of everything else in the computing world goes down. They produce incremental improvements that do little other than generate files older versions can't read to dissuade anyone from staying with older versions. They continue to tighten the screws and introduce ever more onerous licensing terms, funding their ventures to monopolize even more markets they wouldn't have even been able to think about if there was competition in their main market. Would-be competitors can't even give their software away because they don't read the monopolist's secret file format perfectly. The lock-in is so tight that it takes a couple more cranks on the screwdriver before the customer winces and says "gee, maybe we should think about using something else".
And you say this is an example of the market working just fine.
I'm stunned.
The enemies of Democracy are
improving the quality is. Or would have been, if they had listened to me over the years ago every time I was asked what new feature I wanted to see in Windows. Without exception, my answer was always "None, just make what's there work right!"
I am done with Windows now. I was a dyed-in-the- wool Windows advocate for years. It took many, many mistakes on Microsoft's part to drive me away, but they did it.
Case in point: until the beginning of this year my home network was exclusively Microsoft. My server ran NT 4.0 with Small Business Server on top for printer/file sharing, sharing FAX services over 1 phone line and Internet access over another. I had as many as 7 workstations, all running Win95/98SE and, at the end, one running win2k (don't ask, I consult, develop hardware and software, write technical documentation, have a son that MUST run the latest games AND they're my toys).
Starting in January, my network hides behind a Linux firewall/router. The SBS server is down until I can replace the OS with some flavor of Linux. This is the result of of two things: signing onto my server one day and finding an advertisement on the desktop and endless, endless hassles with MS's proprietary proxy server protocols while trying to develop embedded web stuff.
There is now one Linux workstation, any new workstations will be Linux and there will be no XP workstations! This is a result of one weekend playing with the new "improved" XP desktop and looking at the traffic thru my server to the Internet while that XP station was running (tell me why in hell XP has to phone home when I open a help file?).
My primary concerns are now security and usability. All of the software I mentioned above was purchased; cost or the threat of an MS audit was not the problem. In the last 4 months I patched the Linux on my firewall/router once. Any guesses how times I patched NT or the many services that make up SBS in the four months preceding that? I don't remember myself but I do remember checking once per week and never, not once, NOT having to download a patch for some MS piece of software.
Free is not enough! Pay more than lip service to security and quality issues, quit invading my system for personal information just because I purchased your software, start thinking about MY rights instead of Hollywood's and get rid of the ever-fancier eye candy on each new release of your desktop (I got work to do, damnit!). Then maybe I will consider Microsoft software again.
Damn, that is one fine chick. My fav BSD chick is here.Then there is this hottie. Damn pics like this make me want to use BSD more.
Not all conservatives are stupid,
but it is true that most stupid people are conservative.
- Hume