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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
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.
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!?
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" .
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?
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?
- 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.
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'...