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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."
Like many people already pointed out, this activity is standard fare for competition. No business wants to lose, and they will all think of how to beat out their competition.
Personally, I would like some good competition vs. Microsoft. If Microsoft's software is so terrible, and the alternatives are so good, then people will opt for the alternatives despite cheap/free pricing from Microsoft. (The current reality, of course, lies somewhere between both extremes).