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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."
So, if you want to have Microsoft software for free, you know what to do!
My karma ran over your dogma
It's not the price, really. Corporations and governments are willing to pay the price of Windows to ensure that they have support and stability. But the licensing of Windows -- product activation and the like -- are what's really kicking Microsoft's teeth in. Consumers are willing to overlook a lot, but not things that actively make their life harder, for no personal gain for them.
To want to beat out the competition.
Many large corporations drive prices down to crush the little guy.
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Free your mind.
I hate Microsoft as much as the next geek, but really, what do we expect from a company? 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?
It seems to me that every time there is a posting about something else MS does, it's the same old stuff: they want more market share, just like everyone else. That's it, it should be expected by now.
Keep in mind that I am not excusing them for any unethical practices, just something that nags at me.
Maybe the EU should look into dumping charges against MS, if they offer to give it away for "free"...
Fascism starts when the efficiency of the government becomes more important than the rights of the people.
As the chair of my neighborhood gardenclub, we have been considering implementing a new server rack with either Win3k and MSSQL to track the movment and eating habits of chinch bugs. Given our modest budget, it currently looks as though we will have to forgo using MS products in favor of OSS/FS alternatives. Can I have my free software now?
Just as irrigation is the lifeblood of the Southwest, lifeblood is the soup of cannibals. -- Jack Handy
Isn't this illegal? Here we have a convicted monopoly selling it's products at a loss to shut out a smaller competitor. Isn't that illegal?
Lesbian Nazi Hookers Abducted by UFOs and Forced Into Weight Loss Programs - -all next week on Town Talk.
After a while, we discovered that we were only being used as a tool of negotiation to get lower prices for WinCE licensing... it seems that using Linux as a disuasve weapon was effective. It seemed that they would do anything not to lose to Linux
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.
While I still haven't figured out why I should be outraged that Microsoft's sales force, you know, sells stuff, that bit made me laugh. Like this guy is James Bond, successfully impersonating a consultant. I've worked the KDE booth at Linux conferences, alongside teenagers who know even less about the IT business than I do -- Steve Ballmer himself could walk up to the booth and unless he was sweating and screaming, "Developers! Developers!" no one would recognize him.
I mean, do Microsoft sales people have horns and a tail? Why would anyone doubt him?
What I'm listening to now on Pandora...
Seems to me the business/government market has clung to MS for the sole purposes of familiarity and ease of support. Hire any MCSE off the street and you have qualified support personell. Have a problem, call up Redmund and tell them about it.
Windows has kept essentially the same for the past few years, minus a few "enhancements" (a.k.a. extra features not many people need). This facilitates people turning their heads towards more customizeable software, where a kernel can be compiled for any given specific purpose, and only the required software runs.
Aside from the incredibly cheap software itself, the unmatched compatibility-for-purpose, and customizability make Open Source a very viable solution for previously proprietary, overpriced, "as is out of box" software. And as potential support people and developers materialize out of the mould, it's getting more and more serious consideration.
It's just plain sick of Microsoft that they would consider just giving their multi-thousand dollar software away simply to keep market share. Wonder how that would make me feel, if I were a business owner. Knowing I paid $2,500 for an enterprise server, when a friend of mine's business gets it free just so they remain a Microsoft customer. Really would make me consider the alternatives all the more, for fear of getting played like a fiddle by the monster of dominance.
This is the best argument I have ever seen for open source.
The reason that Microsoft is concerned about governments is that they know that governments have the power to set de-facto standards. If a business partner sends me an unreadable document I can probably work something out with him or her. If the government demands that any electronic communication be in a particular format, that's the format that you use. What's more, nearly everyone has at least some business contact with the government. If a government switches to StarOffice/OpenOffice then you can bet that within a few years StarOffice formats will be the standard in that particular country for almost everything. It won't matter that it some ways OpenOffice isn't as good as MS Word, because it is definitely "good enough," the price is right, and it is the format that you need to use to communicate with the government.
Large institutions are a similar deal. If your University demands that you turn in your assignments in Microsoft Office formats, then you don't use WordPerfect or OpenWriter (or if you do you make sure to double check the formatting with MS Office before actually turning the assignment in. Likewise, if you supply parts to Ford Motor Company and they require that documents you submit be in MS Word format, then you don't use something else.
Microsoft can't afford to lose these big accounts. If they do their entire monopoly will start to unravel around them. It is far better business for Microsoft to give away software to these key accounts than to lose them to the competition.
Da Blog
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."
Hey, most of the pics at that site are mine. I went to LinuxWorld 2000 in NYC, and while my friend was playing Quake 3 all day, I was busy snapping choice shots of Ceren's (her name) hot bod! No fair!
s.j.
http://studiousjew.blogspot.com
So we started a policy that banned XP for "security reasons" and made a sweet deal with Red Hat. Unless you had a valid reason to use an XP product, you used Win2K or Linux. Linux meant that we could use older machines on our server farms and pay virtually nothing because, funny enough, Red Hat gave us a site license for support. Not that we use it (or need to) very much.
Suddenly, Microsoft "produced" a disk with Product activation disabled (sort of, it's kind of complicated), but claimed all kinds of voodoo like it had a copy protection so complex, we couldn't burn a new one from the master... even sector-by-sector copying. Bollocks. You could use any XP disk, just as long as you followed the directions MS gave us for the "master CD." Now we have a lot of the CDs all over the place, with a site key (and no, I won't give it to you, use Linux and be free) and the "process" to make it work legally by our contract. It took them two years to backpedal that far.
It's weird, because for so long, Windows was essentially "free" (although, not legally) because until WinXP, more than half the people I knew had "borrowed" an OS CD from "somewhere." Microsoft knew that (I mean, come on), and like a drug pusher, made sure the buyer was hooked before they started charging (my proof is how they made MSIE a dominant browser over Netscape). But it's not that easy anymore. Linux desktops are getting better and better, and while Windows is easier to use for the most part, it's lack of flexibility, anti-customer anticompetitive stance, and their brazen arrogance in the field is really dulling their blade.
But in this case, I can't fault them for trying to give away freebies, I mean, trade shows do that all the time. But what we should really be wary of is when they get politics involved, and claim stuff like DeCSS is proof that Linux should be banned in the US or something equally as stupid to us techies, but is all greek to your average politician who could be $wayed by $ome other thing$...
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www. - where else can you get blogged to death?
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?
No kidding, all Microsoft has is this loser
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.