Munich Spurns Steve Ballmer's Software Rebates

Kurt Pfeifle writes "Steve Ballmer's recent trip to Munich to offer up to 90% rebates for the Microsoft Software Assurance and Licenses was in vain. The ruling party of Germans biggest city and self-proclaimed 'technology capital' now decided to migrate 14.000 workstations to Linux and an OSS office suite. A study comparing the alternatives had assigned 6218 (out of 10.000) points to Linux/OSS, while the MS Windows platform only scored 5293. Babelfish translation of the latest newsticker story."

Comments

Good job.

[grub]

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."

Re:Good job.

[Jason Earl]

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.

[saden1]

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.

Re:Good job.

[twalk]

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.

[A Naughty Moose]

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.

preliminary decision

[tholti]

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:A sign of things to come?

[Anonymous Coward]

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

Re:Now THAT'S a monopoly!

[bstadil]

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.

Re:A sign of things to come?

[Angry White Guy]

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.

Re:A sign of things to come?

[Anonymous Coward]

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:Now THAT'S a monopoly!

[rseuhs]

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.

Could this also be a result of the Iraq war?

[Martin Marvinski]

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.