Munich Spurns Steve Ballmer's Software Rebates

Good job. by grub · 2003-05-26 08:32 · Score: 5, Insightful

When any manufacturer offers incredibly deep discounts like this, it's only so they can get their hooks into you. "Give them the razors, sell them the blades."

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Trolling is a art,

Re:Good job. by Jason+Earl · 2003-05-26 09:03 · Score: 5, Insightful

Microsoft isn't worried about PR. They are worried about the thousands of German businesses that are going to be drawn inexorably towards Free Software. Lots of companies have to deal with the Munich city government, and the default formats for dealing with this organization just switched from MS Office to OpenOffice.org.
The trickiest part about using Free Software is dealing with proprietary document formats. Read a review of any Office Suite for Linux and the first thing that the reviewer writes about is the ability to share documents with users of MS Office. When OpenOffice gets a negative review it is almost never because the tools are not sufficiently capable, but rather it is because the MS Office conversion filters aren't up to the task. Companies in Munich now can deal with their city government without resorting to these proprietary MS Office formats. In fact, the bureacrats are probably going to mandate the use of OpenOffice.org formats. They might not even do it on purpose, but you can bet that when the government employees have problems opening up a document that they will point the person towards the OpenOffice.org website. It probably won't be too long before a significant part of the Munich business community uses OpenOffice.org formats as their new lingua franca.
What's worse, there is a good chance that many other German cities will follow suit. Microsoft could very easily find that one of the largest economies in the world is no longer interested in MS Office.
Re:Good job. by saden1 · 2003-05-26 09:42 · Score: 5, Insightful

Microsoft is in a real catch-22. I mean what is stopping governments/companies from getting those deep discounts by threatening to switch to Linux? If they don't give discounts they may well lose contracts and the pool of people using open source software grows. If they do they aren't going to make as much money and they'll surely have to dip into that 45 billion dollars they are sitting on.

M$ has been ripping people of for year. Now they'll be the ones getting extorted. Like the old saying goes whatever goes around comes around.

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Re:Good job. by twalk · 2003-05-26 09:53 · Score: 5, Insightful

What really puts them into a spot is their investors. They still think that MS is a growth stock. If they cut prices to compete with linux, they have a bunch of really pissed off investors, because their revenue won't be increasing as expected. If they raise prices to increase revenue to please the investors, then linux wins in the long run.
Re:Good job. by A+Naughty+Moose · 2003-05-26 09:58 · Score: 5, Insightful

Microsoft only has to offer these deep discounts to those companies that are serious. I mean do you think that a Fortune 500 company is going to say to Microsoft: "No thanks, we're going to switch all all desktop to Linux and OpenOffice", without actually devoting resources to looking into the feasability of such a project? The only way to get MS to give you discounts is to actually mean it. Go into a meeting with Steve, and say: We've done the research, OSS will cost us X to switch, and Y to support each year. After Z years, the OSS solution pays for itself, and after that, we're running a profit in the IT division. Now we really don't want to switch, the short term headaches will be a bitch, what deals are you going to make for us Mr. Ballmar? What if the company didn't do this research or actaully make a comitment to change if the response is: "Screw you, You'll take what we give and like it."? What is the company going to do? The point? You can't use OSS as leverage unless you actually plan on going through with it. Kudos for the German goverment for playing the hard ball game, but this only becomes meaningful once this is in operation.
Re:Good job. by Lord+Flipper · 2003-05-26 20:11 · Score: 3, Insightful

The thing is, they aren't a 'growth' stock, at all. In the two years ended 2001, MS showed a net of 21 Billion dollars US, however, they had over $22 Billion in salaries that were paid in (inflated) stock, and options. This 'payroll' was never declared against income, nor taxed, obviously. So...bottom line: They were losing money before the market crumbled.

Also, the fact that their net income was artificially inflated had the side effect of making them appear healthier where financing (bonds, short term corporate 'paper', etc) was concerned. Just like Enron. And Apple, actually, and many others. But with the numbers so high, and the market 'weighting' in the S&P 500 so heavy, Microsoft perpetrated a giant, government-ordained, fraud on investors.

Don't get me wrong, they still have the $45 Bil, but at some point there will be a reckoning. Any one of us, with a small-to-medium-sized company, should be able to easily imagine what the terms of biz loans, credit, etc, would be like if our payrolls weren't part of the 'cost of doing business'. No?

My guess is that the Germans are more spooked by 'backdoors' in the OS, and the cozy relationship between MS and the DOJ (read: white house, oil-based oligarchy, etc), than saving a few bucks. Although, with the current US efforts to let the dollar fall (and Europe, Japan, and Asia go 'belly-up', in terms of currencies and trade) saving a few hundred million marks isn't such a bad side effect of German attention to their own security, sovereignty, etc.

preliminary decision by tholti · 2003-05-26 08:37 · Score: 5, Insightful

Note that it is still a preliminary decision. But as you can read from the article if it comes to the final decision there probably will be 43 (SPD and Gruene party) to 33 (CDU and FDP) votes for Linux. :-)

Re:to the editors of slashdot by Neil+Watson · 2003-05-26 08:40 · Score: 4, Insightful

This is not an article about just Miscrosoft. It is an article that offers me a faint glimmer of hope that maybe, just maybe, greedy mega-corps do not control the entire world.

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UNIX/Linux Consulting

Now THAT'S a monopoly! by crivens · 2003-05-26 08:40 · Score: 4, Insightful

90% discount?! Now THAT'S a monopoly! I don't see Steve Balmer rushing to offer me a 90% discount on any MS products. Then again I'm not a city so no wonder!

Re:Now THAT'S a monopoly! by bstadil · 2003-05-26 08:52 · Score: 5, Insightful

90% discount?!
I am surprised that this was offered. Microsoft is not out of the legal woods in Europe and a discount of this magnitude can almost only be construed as an attempt to leverage a monopoly situation. There can be no other rational business reason for this discount.
On an aside this is a huge blow for MS. The knowledge of the offered discount is probably worse than not getting the biz.

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Re:Now THAT'S a monopoly! by rseuhs · 2003-05-26 09:02 · Score: 5, Insightful

I am surprised that this was offered. Microsoft is not out of the legal woods in Europe and a discount of this magnitude can almost only be construed as an attempt to leverage a monopoly situation. There can be no other rational business reason for this discount.
The reason was that under no circumstances Microsoft wants any publicly visible large migration to happen. They would have paid Munich to run Windows if it wouldn't look too stupid!
Hell, they DID pay a lot for the Bundestag to stay on Windows at least on clients. They invested over 5 million $ for a PR-campaign, which translates to 1000$ for each of the Bundestag's computers.
Money is not the issue here.
The issue is a big organization showing the world that Linux is viable on the client.
The issue is that now a lot of applications are going to get ported to Linux and Linux will be an even better deal for other cities.
The issue is that now millions of people are going to communicate with OpenOffice file formats with their government.
Re:Now THAT'S a monopoly! by mindriot · 2003-05-26 11:26 · Score: 3, Insightful

Actually, This article says:

Microsoft has lowered its price offer by 15 per cent in order to prevent the city switching to Linux

That would be a bit less then. So I still wonder where that 90% is coming from, and if that's a 90% discount on the complete price... more likely, some components were reduced by 90% so that the overall discount is closer to 15%.

With an 84% profit on each copy sold... by Realistic_Dragon · 2003-05-26 08:43 · Score: 4, Insightful

This is selling it below cost, which is dumping, which is illegal. The EU competition commission should take note of this (along with other infractions 1 through 97bn) and throw the book at them.

If it's a lead plated copy of War and Peace, hurled at 1,000 m/sec, all the better.

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Beep beep.

Re:With an 84% profit on each copy sold... by Anonymous Coward · 2003-05-26 09:02 · Score: 3, Insightful

This is selling it below cost, which is dumping, which is illegal.

It's not either. How does this shit get modded up? Is it because of the "throw the book at them" anti-Microsoft dig?

There are circumstances under which selling goods below cost can be part of an anti-competitive practice, but the simple act of doing it is not illegal. Microsoft sells the Xbox below cost every day. Hell, the Gillette company sells their razors below cost in order to drive the sales of blades, which are immensely profitable for them. Selling one thing below cost in order to drive sales of another thing is (1) not illegal, and (2) common and smart business practice.

Re:A sign of things to come? by Anonymous Coward · 2003-05-26 08:45 · Score: 5, Insightful

Anti-Americanism is *everywhere*. I'm posting from your number one ally, the UK, and people here grimace when you mention the US.

Re:A sign of things to come? by rseuhs · 2003-05-26 08:51 · Score: 4, Insightful

Sure is. After all, most cities are quite similar - when all applications the Munich government uses have been ported to Linux, migrations of other German and European cities will become a lot easier and faster.

Also, millions of people will communicate with their government using OpenOffice formats, which essentially means that OpenOffice will become the "must have" office suite while MS Office will be the redundant "why should I use that when I already have.." Office suite in these regions.

This of course will make it easier for companies to migrate to OpenOffice and possibly Linux themselves.

Ballmer interrupted his skiing trip for a reason. He knows how important such a migration is and that just one large-scale migration is needed to start the landslide.

Re:A sign of things to come? by Angry+White+Guy · 2003-05-26 08:55 · Score: 5, Insightful

I think that, rather than anti-americanism, it is a pro-germany stance. How many OS companies are in Germany? How many MS programming jobs are in Germany? How much economic runoff is there going to be in Germany in both scenarios?

If the Germans go with Suse, they have programmers in the country, administrators in the company, technical support in the country. Conversely, should Germany go with Microsoft, they only have administrators.

It just makes sense to go with Suse in this case. The technical barriers can be overcome, and interoperability only comes into play based on install base. You replace the whole load, compatibility problems go the way of the Moose.

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Re:A sign of things to come? by Anonymous Coward · 2003-05-26 08:56 · Score: 5, Insightful

You're not right. Various parts of the German government, especially the federal government, are considering Linux since quite a while. Munich's recent decision is just another step.

The major argument have probably been the high costs of MS systems, which in this case have also been accompanied by a general matching of the open source ideals with the ideals of the current government of Munich (liberal and social).

Oh, and by the way: The decision clearly wasn't driven by anti-Americanism. You can see that because IBM got the assignment, which is, as you know, also an American company.

And just about your opinion that Anti-Americanism was quite big in Germany now: According to a recent poll 70% of all Germans still consider Americans to be their friends (the number didn't change due to the latest events). The Germans just have a different opinion about world policy, that's all.

Kind regards,
Chris

Re:90% isnt considered a rebate anymore by Anonymous Coward · 2003-05-26 09:01 · Score: 3, Insightful

several reasons:

to strengthen the 'technological capital' thing
free is still cheaper than 90% off, which is important in the current german economy. also, most of the cost that does exist will stay inside munich, instead of giving a foreign company the money
it creates 'real competition'
it gives greater flexibility
the change will create jobs for qualified people (which means more off them come to munich)
not dependent on a single company

Re:A sign of things to come? by rseuhs · 2003-05-26 09:12 · Score: 4, Insightful

In all other areas windows is usually better.

Sorry, but the only area where I found Windows to be better than KDE/Linux is gaming. And that's only because there are too few games, not because of any technical limitations.

Also, the roots of this decision lie long before the Iraq war.

Re:Heard at M$-HQ by rseuhs · 2003-05-26 09:17 · Score: 4, Insightful

It's funny.

First Ballmer interrupts his skiing trip to talk to Munich officials.

Then a Microsoft memo gets leaked in which it is stated that "no matter what, don't lose against Linux"

Then Ballmer offers a 90% discount

Then Ballmer sells 10% of his MSFT-stock.

And finally Munich uses Linux anyway.

90%? they would have gotten it back anyways by Hellasboy · 2003-05-26 09:23 · Score: 3, Insightful

just some thoughts on the situation...
first, it's been said before that by going w/ Linux it will help the German economy more than by going with windows.
second, 90% is a great rebate discount. But what happens 5 years down the road when MS decides to not support the piece of software that they have already sold and instead tells the people of Munich that they have to buy new versions of the software at full price?
Third, this is a good way to bring Linux to people's homes. Didn't the x86 processor (and subsequent MS OS) become popular due to the fact that it was all over the workplace and people wanted to use it at home? not exactly like that but i hope you get my thought.

and just so people don't think i'm some Linux zealot, i use winxp and beos. i've tried several distributions of Linux and don't like it... yet. As more people use it, it will definitely get much better for home use.

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Re:It pains me to say it but... by greg_barton · 2003-05-26 09:34 · Score: 4, Insightful

Even if they waive all future upgrade license fees, they still have support contracts, MSDN and other subscriptions to services many large organizations will rerquire.

Golly. Sounds familiar. Isn't this the...*wait for it*...open source business model?

Could this also be a result of the Iraq war? by Martin+Marvinski · 2003-05-26 10:00 · Score: 5, Insightful

Before the war, there was an article on how the US was spying on countries to see how they would vote on the war resolution in the UN.

http://www.observer.co.uk/iraq/story/0,12239,905 936,00.html

Because of this Germany may also be moving away from software that may have potential secret backdoors written in for the NSA. No matter how much you get in rebates, it will never give a government the peace of mind of having compiled and inspected the code yourself.

Re:interconnection by sloanster · 2003-05-26 10:56 · Score: 3, Insightful

Your message is somewhat nonsensical -

1. The slashdot community does NOT hate microsoft. Since the the slashdot community is composed chiefly of users of microsoft windows, your statement makes no sense.

2. When microsoft does badly, the "entire tech industry" does not do badly, quite the contrary. Those who depend on microsoft stock do badly - period. "the industry" is actually much better off if software companies are able to freely innovate without the fear that the 1300 lb gorilla is going to smash them with monoploy hardball tricks.

3. The mainstream adoption of open source does not mean fewer jobs for programmers, but quite the opposite - what on earth gives you that idea? open source opens up many more opportunities for programmers.

Being a programmer, I find this delightful!

Call me picky, but 6/10 is a good score? by Gldm · 2003-05-26 10:57 · Score: 4, Insightful

When the winning software basicly scores 6/10 and beats out a competitor scoring 5/10, what does this say about the suitability of current software for what users want to use it for?

Yes I know it's fun to watch linux vs windows and cheer from the sidelines etc, but how about this bigger picture?

Maybe it's just me but software seems to be doing less and less of what we as users want and more and more of what marketing departments want. Useless features, obsolete features that are never pruned, tons of time and money spent dealing with ways to push advertising or find more ways to milk the consumer... Whatever happened to looking for ways to make doing everyday tasks easier and faster? Open source projects don't seem to be entirely immune to it either. I see lots of development in trying to keep feature parity or adding new things to invent new buzzwords for, but I haven't seen anything moving towards ease of using for some time now. All apps are now using "skinable" interfaces that make using them inconsistent with each other. Some apps have such complex configurations they're harder to learn to use than the average OS. I think that's a problem.

So what were the almost 4000 points that weren't awarded based on?

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Re:Wow! by TheRaven64 · 2003-05-26 10:59 · Score: 3, Insightful

Or better yet, actually use those nice facilities built into CSS2 for that kind of internationalisation. Of course that would make the site not work properly in IE (which doesn't support that part of the CSS spec) but hey, no one cares about a few MS users, right?

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Munich Spurns Steve Ballmer's Software Rebates

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