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.

[GameMaster]

Actually, the other possibility is that they are looking at the over-all PR picture and figure that the loss in profits is worth not getting the bad PR of having a whole nation convert over to OSS. In which case it could be looked at as a great deal from the Munich government's prospective because they could always make the switch to Linux later if MS starts trying to tie them down.

I think it shows even more strongly the wisdom of the Munich government in their decision to take government software out of the hands of a proprietary company.

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.

[zakezuke]

They "could" actually release "microsoft office" for linux. That would be an idea!

Seriously... while it is a comercial product, it is one that is actually *used* by a great many people. What better way from profiting from the free software movement then actually releasing comercial products for it. Rather then offering a discount of 90%... offer them a product they will buy.

Assuming the price is the same... city saves money on operating system, but doesn't have to spend money on migrating documents.

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.

Re:Good job.

[sproketboy]

The format for Open Office files are OPEN you dimwit. There's no "lock in" here. Read about at http://xml.openoffice.org/ before before posting nonesence.

Re:Good job.

[krisp]

Perhaps you should take a closer look at this story. Unless you plan on spending $900 on your copy of office, you don't get XML support. Sounds proprietary to me.

Likewise. from the article:

Text in Office 2003 files stored in XML format might be viewable in other desktop programs, but all document formatting would be lost

Sounds to me like you'd be better off saving it as an RTF then as a MSXML file. Save yourself 100kb.

Re:Good job.

[saden1]

I agree with you about having to mean it but I am confident that M$ would immediately jump and offer discounts if they ever heard company X say we'll do feasibility and cost study on Linux. M$ would offer discounts just not to have the study done. Now companies/governments have some leverage where as before they'd always tell you "Screw you, You'll take what we give and like it." Take the changes they made to their license policy a year or so ago. They made a killing at the expense of their customers/users. I don't think they can low ball people like that anymore. No wonder why they are supporting SCO.

Re:Good job.

[mav[LAG]]

They "could" actually release "microsoft office" for linux. That would be an idea!

No it won't and for a simple reason: more than anything else, Bill Gates likes to win. The money is incidental. Yes I am being entirely serious. Go and read Accidental Empires by Robert X Cringlely or Big Blues by Paul Carroll or any other detailed treatise of the early (and subsequent) days of the PC. The overriding impression of Gates is that he wants to win. It's a philosophy that permates the organisation from the top down. Why do you think Microsoft Account directors are being given millions in discounts and orders to "under NO circumstances lose to Linux"? Surely that money would be better spent in the medium term in other ways? But seen in the context of "winning the business at all costs" it makes perfect sense.
Here's the telling quote and you can be really really sure that Gates has read it and knows it:
"If Microsoft ever does applications for Linux it means I've won" - Linus Torvalds. Source here
This is a lovely quote from Linus and I'm sure he knew exactly what he was saying by putting it in terms of the "win-lose" mentality of Microsoft.
Office for Linux would be a huge loss of face. Can you imagine the /. headline (and the next one a day later :): Linus prophecy fulfilled as Gates loses face over Linux Office.
The IT press would be all over it.

Re:Good job.

[Jason Earl]

The difference is that OpenOffice.org is Free Software. You can download the program from the Internet. The city of Munich could even make money selling install CDs.

Re:Good job.

[bwt]

You've got to be kidding. An open office file is a zipped XML archive. This is a big advantage for OO over MS Office. The better solution to your floppy problems is to stop using floppies. It is no longer reasonable to expect students to have PCs that have floppies (it rules out new PCs from vendors like Dell).

Re:Good job.

[Qacker]

Sure that isn't much diffrence but when you have a long (1meg+) book the space saved is a lot. As long as you can save as straight XML why is anyone complaining?

Re:Good job.

[Malcontent]

You don't have to go those lengths. Here is what you do. I mean this, this actually works.

Install a PC in the office of the CIO that's running linux or freebsd. Set a screen that shows a penguin or something like that. Install openoffice, set up a handful of programs like mozilla, a jabber client, and make their icons prominent on the destop.

Also install two or three linux servers in the server room. They don't have to be doing anything but it would be great idea to lable them "postgres server" and "Mail Server".

When the time comes to negotiate the new contract the sales rep will notice the servers (they are trained to look for them) and ask about it. At this point the CIO (and not anybody else) says "We are doing some preliminary analysis about the suitablity of a linux desktop and some servers". when the sales drone asks how it's going just say "it's too early to tell but so far it looks pretty good, Hey let's go to the server room and let me show you that new exchange server we installed".

Bingo!. After touring the server room your company will be offered a substantial discount on your software licenses. The bigger you are the bigger the discount.

Paying retail for MS licenses is like paying the sticker price for a car. Only the most stupid idiot CIO will do such a moronic thing.

Re:Good job.

[raju1kabir]

There are many occasions where I've received a MS Office doc file containing one or two sentences of simple text. "Here is the price that you asked for. We currently have 300 in inventory."

And the most annoying thing about that (okay, the second most annoying, after having to fire up another application just to read two sentences) is that the attachment will be 150K, despite containing about 60 bytes of actual information.

Re:Good job.

[Lord Flipper]

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.

A sign of things to come?

[Mistlefoot]

Is this a sign of things to come as more and more jurisdictions move to Open Source?

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:A sign of things to come?

[rseuhs]

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?

[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:A sign of things to come?

[rseuhs]

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:A sign of things to come?

[heby]

so what is it when the american government favours american firms over foreign firms for contracts or decides to buy american-made stuff for all their needs? even if this was not a technical decision, how would this be different?

Re:A sign of things to come?

[flacco]

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

This actually gives me another reason to support the war in Iraq - it's pissing off foreign Microsoft customers!

There is that "the rest of the world hates you" thing, but I can deal with that.

Re:A sign of things to come?

[praedor]

I'm all for it and hurray for Germany. It is great for Germany to go SuSE. I would like to see France go for Mandrake, and the US (never happen, especially with GW Crackheaddrunk Bush in office) go Redhat. Why? To push money into native software companies that adhere to open standards and at the same time drives innovation (unlike certain closed source, monolithic monopolies that I wont mention).

Germany pays money that helps keep computer expertise (programming, administration) local and at the same time helps an international company (IBM) that helps world trade (and the USA). If France went Mandrake, the same thing accrues to them. China goes Redflag Linux, India goes...well with whatever as it doesn't really matter because if any country goes linux, it serves to keep computer expertise local and fuels innovation globally.

Re:A sign of things to come?

[hhnerkopfabbeisser]

As a German, I respect your view, but I have a few points.

Over here, pacifism is not just in people's heads, since WW2 it's so deeply buried in our constitution that we couldn't have joined that war even if we had wanted.

You certainly had your role in the european part of WW2, but the Nation that played the most important role certainly was the Sovjet Union. From a military point of view, the Sovjets freed, Germany. AFAIK, the eastern front bound about two thirds of the Nazi armed forces.
Of course you brought us Democracy (West Germany, at least), and for that, I can't thank you enough.
Recieve praise where you deserve it, but don't claim it all for yourself where you don't. Did you know the movie U-571 is based on actual events, but that is wasn't American soldiers who did it, but Tommys?

The last time people over here saw war rage through our country is less than 60 years ago. America hasn't seen a war from close up for almost 140 years.
People over here tend to believe that this made you at least slightly ignorant of the terrors of war, because your memory (historically) of them is not as fresh as ours. We tend to believe that you resort to violence too quickly.

People over here don't really think a war is always wrong, but that it can only be a last resort, not a common tool of politics, and have the impression that you, or at least Rumsfeld and the like, seem to think otherwise.
The way the Bush administration desperately searched for excuses to wage a war instead of trying to prevent one, and the frequency with which you send your soldiers out lately gives people over here the willies, or makes them just angry.

Most Americans are so upset by anti-americanism because you don't understand how the world percieves you, and that trying to bully the world around when they don't do what you want is not really a good way to make friends (here I refer to what your government seems to regard as 'diplomatics').

Munich isn't Germany's biggest city ...

[moonbender]

... Berlin is. Berlin has got a population of approximately 4 million, compared to Munich's approximate 1.5.

Re:Munich isn't Germany's biggest city ...

[dipipanone]

I believe, however, that Munich is the capital...

Let me guess, you must be an American, right?

Math

[Nexum]

Anyone want to do the math on this one?

If we assume Linux never existed, and therefore the 90% cut price offer never made, making Munich pay full whack for 14,000 copies of Windows, how much would this cost (on this scale - obviously i doubt they would pay the full ~$300 permachine?)

Or put more directly... how much has this shaved off the MS bottom line for this financial quarter? If anyone knows what the purchase rate for both WINDOWS and OFFICE on this scale... please... let us know the math!

-Nex

Re:Math

[djupedal]

The math that's worth doing is not what this incident alone will or will not cost...it is the cost over many, many quarters when MS can't 'project' earnings from another fish on the hook.

Re:Math

[Teckla]

I think it's one human soul per Windows/Office seat, as well as your first born.

-Teckla

List of Switchers?

[vivIsel]

Is there anyone out there who mantains a list of countries, cities, companies, &c who have made the move to Linux? If not...well, it would be useful for making Open Source pitches to prospective switch-ers in government, business, and the like. To be sure, Munich isn't alone, but how much company does the city have? I imagine something like one of those push-pin maps, sorted by distro, perhaps, and by the size of the switch (citywide, countrywide, corporate). Would be neat. Does it exist?

Re:List of Switchers?

[rkz]

We could use mappoint!! Lets start it ASAP
More info

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. :-)

Security issue ?

[Krapangor]

With OSS they can see the source and verify that it's frre of any backdoor. So they can protect their precious secrets about the Oktoberfest and what Bavarian beer is really made of.

Re:Security issue ?

[gmhowell]

what Bavarian beer is really made of

The same thing as all German beer: barley, hops, water, yeast.

The actual law.

Re:Security issue ?

[ShadyG]

It's PEOPLE! Bavarian beer is PEOPLE!!!

-- ShadyG

Better translation

[akruppa]

I had the same story submitted, along with a cleaned up translation, but it was rejected.

Anyways, here's the corrected translation, hope it helps.

Alex

Munich City Hall's SPD decides in favour of Linux

In today's meeting, the SPD faction of the Munich City Hall spoke out in
favour of using Linux on the PCs of the city's administration. Thus a
preliminary decision has been made, spokesman Jürgen Bühl said. The Munich
city administration migrates from Windows NT to Linux as the client
operation system and to an office suite from the Open Source domain.

The transition to Linux guarantees greater independence of suppliers and
greater "flexibility in the design of the future IT landscape of the city
administration". Additionally considerably lower cost are created.
Considering the tense budget situation in the states [Bavaria] capital, this
is an aspect that "supplements the strategic-qualitative advantages," says
the note from Munich.

Town councillor Christine Strobl, deputy leaders of the parliamentary group
and SPD spokeswoman in the personal and administrative committee, states:
"At the same time we provide for the further shaping of the technology
location Munich. For development and support the city will purchase
services. Thus we promote high-quality jobs in the region. In this context,
the Technical University of Munich's support during the migration underlines
the outstanding position of the science location Munich."

The migration of the 14,000 PC systems and Notebooks with over 16.000 users
is to take place "gently". In particular departments with extensive
specialized applications are to be able to plan on a long-term basis. The
final decision will be made by the city council in the plenary assembly on
May, 28th. For over one year SPD has held 35 of the 80 seats , the CSU 30,
the Greens 8 and the FDP 3. The other parties account for the remaining four
seats.

"We are fully conscious that our decision has a signal effect", says Strobl.
"That's why we have investigated the matter intensively." The consulting
firm Unilog initially rated the impoved offer from Microsoft as advantagous.
But open questions had remained and finally a new offer of IBM was present.

The new total evaluation of capital value and qualitative-strategic criteria
led to a draw between both solutions, continues the town councillor. As the
combination of Linux and an Open Source office suite
"qualitative-strategically clearly comes out in front, the SPD parliamentary
group decided for this option as the long-term direction".

Heard at M$-HQ

[netcongestion]

"How many shares shall I sell today?"

Re:Heard at M$-HQ

[rseuhs]

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.

Re:to the editors of slashdot

[Neil Watson]

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.

Not yet

[rainer_d]

This decision must still be finally confirmed by the city council, the original Heise Newsticker article does mention this, though.
The ruling SPD-party does not have a majority in there, but it should not be a big problem to get enough votes from other parties.

Rainer

Now THAT'S a monopoly!

[crivens]

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!

[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:Now THAT'S a monopoly!

[Anonvmous Coward]

"Then again I'm not a city so no wonder!"

Must... resist.... yo mama... joke....

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.

Re:Now THAT'S a monopoly!

[Angry White Guy]

I just see it as Microsoft blatantly stating that their products are gossly overpriced.

Re:Now THAT'S a monopoly!

[mindriot]

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%.

90% isnt considered a rebate anymore

[AvengerXP]

Why did they turn down that? Seems like a good deal to me, Linux or no Linux in the equation.

Re:90% isnt considered a rebate anymore

[Anonymous Coward]

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:90% isnt considered a rebate anymore

[rseuhs]

Linux is more efficient in administration, vendor-neutral (= competition) and KDE offers more features than the outdated Windows GUI.

Once you are used to multiple desktops (no, that measly 4 add-on powertoys desktops don't count.), Unix-style copy-paste and much greater flexibility and configurability, you will never go back to Windows.

Re:90% isnt considered a rebate anymore

[Jack Comics]

You mean the Unix-style copy-paste that often doesn't allow you to copy & paste information between various Linux applications, unlike Windows?

A good day for German Linux users...

[Anonymous Coward]

First LinuxTag issues SCO with a cease or desist order, and now this. Godspeed you! Germans.

Developers

[birdman666]

I wonder if Mr. Ballmer learned how to say Developer in German before he went.

Re:Developers

[s20451]

I wonder if he called himself a jelly doughnut. Then again, he was in Munich, not Berlin.

Deutchland...

[Anonymous Coward]

Deutchland Ousts Windows Alles

Deutchland, Deutchland,
Ousts Windows
In comes Linux
Good and free!

Hear the howling
And the gnashing
From afar
Redmond across the sea!

Deutchland, Deutchland,
Wise technologists
And politicians
who've listened to thee!!

With an 84% profit on each copy sold...

[Realistic_Dragon]

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.

Re:With an 84% profit on each copy sold...

[Anonymous Coward]

Nonsense, economically, the cost of an additional windows copy is virtually zero. As this is the case for all software, the ability to offer 90% discounts doesn't qualify as dumping but as price discrimination.
Microsoft is - what is called - a natural monoploy, a side effect of the software business.

Re:With an 84% profit on each copy sold...

[Anonymous Coward]

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:With an 84% profit on each copy sold...

[jellomizer]

Well these are 90% rebates. So basicly Germany will have to fork over to Microsoft the Full Price of the product. Then Microsoft hold on to the cash for a couple months and invests it and makes more money. Then after some time they give them 90% they gave them back. So say in this period of time they make 10% interest on the cash. Then they are still making a profit. You are assuming that Microsoft will just hold the cash and not do anything with it, which is furthest from the truth.

Re:With an 84% profit on each copy sold...

[dipipanone]

Nonsense, economically, the cost of an additional windows copy is virtually zero.

Quite. Now would you remind telling Microsoft, FAST and the BSA of that fact, the next time they start whining about their huge losses to warez piracy?

Re:With an 84% profit on each copy sold...

[aallan]

I have no idea what Linux, in general, costs if you factored in time, bandiwth, etc but I would not be suprised to see it in the tens of millions.

Oh, much more than that! See this article for details...

Al.

14.000 workstations

[sstory]

14 workstations running Linux is fine, but what's with the significant digits?

Re:14.000 workstations

[Little Brother]

I know most of you know this already, but for those who don't the USA is one of just a few countries that use a point only to seperate whole numbers from decimal numbers, in many countries, including Germany if memory serves, you use the point as an American would a comma in a number, and a comma to seperate whole and decimal parts of a number.

I just wanted to submit that story...

[rseuhs]

Now that I have picked out all that links, I may as well post it:

Munich will be the first city with over 1 Million inhabitants that is run by Linux

Heise has the story (Babelfish may help you)

Short facts are: The actual vote will occur on wednesday, but the SPD and Green party hold 43 out of 80 seats and have both committed to vote in favour of Linux to be used in the government of Munich, a city of about 2 million inhabitants.

The main reason for the migration was "strategic-quality reasons" and to support competition in software, not cost, which was said to be about the same for Linux and Windows.

About 14000 client computers are involved.

The used distribution will be SuSE, but IBM is also involved. OpenOffice will be used as office suite.

The earlier happenings are also quite exciting:

• Study suggests that Linux is cheaper than Windows for Munich: - story, Babelfish
• Microsoft CEO Ballmer interrupts his skiing trip to talk to Munich politians: story, Babelfish
• Suddently a new study says that because Microsoft gave huge discounts, Windows is now better than Linux for Munich: story, Yoda
• IBM also modifies their offer (see main story above)

Re:I just wanted to submit that story...

[Anonymous Coward]

Ballmer skies? That I would pay to see, in light of his monkey boy antics.

Fat lil turd

Re:I just wanted to submit that story...

[ctishman]

I've got four words for ya...

Re:I just wanted to submit that story...

[BroncoInCalifornia]

Is this a crack in another Berlin Wall?

Ballmer should have done his Monkey Dance for the people of Munich!

Now you know why Ballmer was selling shares

[DailyGrind]

Went to Germany got owned came back and started selling his MS shares....

Which office suite?

[Fished]

Does anyone know for sure which office suite they are using? I'm guessing OpenOffice (since in one place Babelfish calls it "Open Source Office". But it's never stated.

Oh, so you're getting free crack cocaine?

[Anonymous Coward]

Comment from one sysadmin when MS offered us free software...

Re:Oh, so you're getting free crack cocaine?

[rutledjw]

I dunno, the MS-dummies where I work swear by it.

Thier battle-cry is that it "has the best debugging and dev tools I've ever used". IMHO, this is a joke. Most of the developers I know who depend on those kinds of tools can't code their way out of a wet paper sack. Maybe it's different outside of the J2EE world, but within I'm always leery of those who are dependent on dev/debugging tools...

In the end, the very thing that makes MS popular with so many developers (a trained monkey can use it) may be their downfall. Those same "trained monkeys" struggle with complex issues that require a greater understanding of technology.

That may be a "flamebait" comment, but it's what I've seen...

Heh!

[FyRE666]

Well, anything that stops Balmer dancing about like a happy, sweaty monkey sounds good to me. I'm only surprised Windows scored so highly!

As an aside, we use Star Office at work on about half the Windows machines, but the people using it do seem to be envious of the staff with MS Office installed. Problems with printing multi-page spreadsheets/images, problems opening files etc, and lack of speed seem the biggest problems.

Although, since the sales/service people are still mostly using PIIs with 64-128MB of RAM, it's little wonder. I recently built OpenOffice on my Gentoo box to see how it compared, and it does seem a lot faster, even though my Gentoo machine has a slower CPU (Athlon 1.4ghz) than my office machine (2.4ghz P4 - although the office machine has a shit SiS onboard graphic chipset).

I doubt the management would like all the PCs building OO from source for 3 days though ;-)

It pains me to say it but...

[hillct]

Microsoft has actually learned a lot over the past decade; particularly in the area or recurring revenue streams.

At this point a significant portion of the company revenues are derived from subscription services. 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. It'll be vary interestingto see what Balmer is willing to offer to get this contract/deployment. There has got to be a point below which they will refuse to go. 'Under no circumstances, loose to linux' must have a limit. I just wonder where it actually is.

--CTH

Re:It pains me to say it but...

[greg_barton]

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?

Wow. The figures speak for themselves

[gazbo]

6218 (out of 10.000) points to Linux/OSS, while the MS Windows platform only scored 5293

Under the Munich government's scoring system, one would generally expect scores around 6000, based on the extremely popular Novell system they had running for many years before they decided to "upgrade" to Windows after being given the hard-sell by MS. To score 6218 shows that Linux is well ahead of the curve; I believe that when they looked at a Solaris installation a couple of years ago, that managed slightly lower at about 6100 (I forget the exact number, but it was somewhere around that).

The most interesting figure is Windows at 5293. AFAIK, that is the lowest score they've ever given out. Certainly the lowest one I've seen that they published.

Go Linux!

Hey just a second

[Battle_Ratt]

Didn't this guy just sell 10% of his stock in the company. Bet he knew it was going to break this way weeks ago. Insider trading anyone?

Re:Hey just a second

[vadim_t]

Hmm, could you please explain how can a CEO engage in insider trading? Isn't s/he inside by definition? And how would Ballmer sell stock otherwise, when he manages the company and probably knows pretty much all that's going on?

You may fire when ready

[Anonymous Coward]

In other news...

"Today Bill Gates announced that Germany has been added to a group of 'rogue nations' that constitute an axis of evil. When Mr. Gates decided to test the full power of his newly built Microsoft Deathstar 2003 on the rogue nation, the machine had an internal segfault which caused a massive nuclear reaction which destroyed the Redmond Washington based companies R&D labs. Mr Gates declined to comment, but a spokesman has told us that Microsoft is still committed to developing world dominatory machines, and that their new model, to be released in 2005, will feature new 'twirly thingies and flashy lights' which will without a doubt improve destructive capacity exponentially. The Apple corporation has taken a similar approach to bring industrial strength 'shiny gunz' to the market, but has recalled that initiative because of blinding resulting from over-used chrome polishing and photo-realistic ammo that take hours to fire once the trigger is pulled."

History may mark this point

[TerryAtWork]

as the beginning of the end for MS...

Just for that...

[Anonymous Coward]

...Microsoft is removing Munich from its next version of Flight Simulator.

Re:to the editors of slashdot

[cheesybagel]

Yes there are many people in the Linux community who do not like Microsoft (in fact there are several people who dislike Microsoft regardless but I digress).

Yes the user submitted a bombastic headline for this story. Heise.de actually used "SPD Munich goes for Linux" which is not quite this bombastic.

However you really should learn to read stories behind headlines. Headlines are usually meant to be bombastic. There is indeed a mention to Linux in the news summary.

Regarding Windows XP vs Linux there are several things which can be said.

For desktop purposes indeed Windows XP is superior for several reasons: common look UI, proper crossapp DND, multimedia support, better hardware management GUI tools, etc.

For server purposes Microsoft OSes lag in several respects: You do not have as many built-in facilities for automation of batches, the fact that UNIX devices are character streams make things like backup trivial, etc.

For something like this desktop win at the German government it is very obvious license costs are important. These are 14,000 machines we are talking. It is a tidy sum. Microsoft may be willing to lower prices *now* but they could well recover their investment later on with upgrade fees after customers are locked in using data with proprietary Microsoft file formats. This way the German government also promotes the local software industry.

What would *you* do if you were in their place?

90%? they would have gotten it back anyways

[Hellasboy]

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.

Re:90%? they would have gotten it back anyways

[Jord]

That is exactly how windows got into people's homes. They used it at work and then wanted to use the same at home. I remember when Windows "migrated" into the workplace and people didnt want it (too slow, etc.). However the push was made and other office products were pushed out. At the time, the GUI was a great new thing and everyone started to like it.

Looking back at it now, it was probably a bad move :)

Re:Where's Your Nationalism Now?

[grungeman]

First I have to say that you nationalist whining kinda pisses me off.

Second: Did you read the article? IBM will make the deal instead of Microsoft. You know what country IBM is from, don't you?

Image of Microsoft

[Luzumsuz Lazim]

It's a pitty for Microsoft that it damaged its image so bad by using its monopoly power and producing so buggy software in the past. In recent years, it was only a bunch of people around me at MIT, and many (not all) slashdot people who didn't aprove what Microsoft was doing. Now, it became a common knowledge that even our secretary realized how Microsoft agresively marketed its products, and how bad they were.

It's pitty, because it finally improved (not perfected though) its operating system that can be considered stable now. But, its too late for most of the people I know. I can tell that ALL science related machines (PCs) we have today use Linux instead of Windows both here in our department and in the part of the Los Alamos National lab. I know, and I'm proud that I was one of the few who started using it, and probably had some effect on this move.

On the other hand Linux is not suitable for everything. I need a decent/mature interface and a machine which requires little maintanence at home, at which point I picked MacOS X instead of Microsoft because of the past experience. Which works pretty well for what it's supposed to do and more... So, again Microsoft lost one more individual as a customer. That's the primary term for Microsoft, instead of the user.

Compatition is good. Now, they improved their products significantly (we must be fair!), and they're trying to reduce their cost, at least, the initial cost. That's also an improvement. Let's be naive and wish that it's not a trick to tie the costomers to rip them later. Actually, that's exactly the pshycological behaviour of most people when the Microsoft is involved. We do NOT trust them anymore...

I do not wish that Microsoft disappears forever, but just wish that it can understand what they did wrong in the past, and try to repair the damage they did. However, it does not seem what is happening here.

90% number not backed up by article

[nniillss]

In the Heise article, the rebate offered by Ballmer is not specified. In fact, the details of the offer seem to be secret. The 90% number seems to originate from earlier discussions (not linked to Munich) about an internal Microsoft order not to lose to Linux at any cost.

Munich vacation in the works.

[small_dick]

A breath of freedom in a world owned by Microsoft.

If this goes through I'm going on vacation to Munich later this summer...maybe rent a nice bike (BMW F650?) and bask in the freedom. Sounds like fun.

Great job, Munich. I know OpenOffice has it's share of problems (it really isn't all that compatible with Word documents), and there will be some hiccups, but just seeing a government stand up for freedom is a breathtaking thing in these sad times.

It does NOT cost them anything

[Great_Geek]

If you do a detailed business-case, I think you will find that Microsoft should be willing to charge nothing.

Recall that if Microsoft loses the account, they get ZERO dollars. On the other hand, per-license cost (to Microsoft) is essentially ZERO as well. So whatever they can charge is extra profit. All of the talk of slush fund to pay for the discount is just accounting wool to pull over people's eyes (and may be keep bonuses straight).

Also, if you look at the Market Share or Network Effect, that also argues for "do not lose". Indeed, as Microsoft (and other companies) has demonstrated, it is often worthwhile to pay a customer to take it.

Deep discounts and future business

[just fiddling around]

Microsoft did what any hungry business does to open doors to a good market: undercut every other. This ain't illegal anywhere.

I just finished selecting a company to make a custom eLearning system at my job. The winner had the best technical offer (it had 10% more points than no.2) AND their price was 50% under the second best price. Moreover, there were about 10 bidders and the eLearning market is young and competitive. The winner was NOT the biggest, baddest, most deep-pocketed; they wanted to take over the bid to get visibility in the corporate structure (yes, we are THAT big).

In this case, Microsoft did what they could and did not win. Which shows the value of the alternative!

Re:Where's Your Nationalism Now?

[sloanster]

Huh?

Did I miss the part where it said american companies will not be allowed to provide the linux software?

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.

Re:Wow. The figures speak for themselves

[mangu]

Exactly what is the scoring system? Do you have any links to how those points are counted?

Just a strategy to promote local tech industry

[mulp]

"I think the real reason they have so much support is because of anti-american sentiments."

A major reason given in countries outside the US is the advancement of a local software industry.

The first country within an economic zone to switch to make Linux the preferred government business platform will probably be the first to develop Linux applications required within the zone. Germans are unlikely to develop applications for a South American country and vice versa.

Most important, the US is least likely to develop Linux applications for use in countries outside the US. That means that a local preference for Linux gives the local software industry a competitive advantage.

Produce for the US, then for the rest of the world is built into nearly all intellectual property marketing strategies. On the one hand, the US expects that the world will all speak American, but on the other, US companies want to control the release of IP outside the US separately from the US release. For DVD this was hardwired, the same is true for software as well.

All programmers should welcome signficant Linux development. Even if you only know Microsoft, the demand for programmers for Linux projects will make the pool of MS Windows programmers smaller increasing your probability of keeping a job.

Re:oh christ

[Samari711]

i think any linguists reading slashdot would have had a stroke a long time ago....

Re:Wow. The figures speak for themselves

[gazbo]

Well, I don't know the exact breakdown, but I believe that it is a rather over-complex system, but which seems to work well.

The first strange thing is that two teams are assigned to work independently, each of which will ultimately produce a score out of 5000 (hence the 10000 total). The logic is that should there be any different approaches taken (especially during the TCO analysis) then they should smooth out somewhat.

Then, the 5000 points are split into "distinct" sections; the reason I quote distinct is because in fact they are anyhting but: security, transition cost, and TCO. Of course, really TCO covers everything, but they chose to extract the first two as different sections because they can be measured in a much more direct way (transition cost) or must be measured in a far more heuristic way (security). TCO on the other hand is an amalgamated figure of ongoing support costs (minus security concerns, of course), training, and initial software cost, amortised over a 5 year period (the standard life-cycle of their system).

I think the 5000 is divided into 900 for security, 1200 for transition costs, and 2900 for TCO. Within each of these, the actual figures they come up with are fit to the appropriate maximum score through a sigmoidal squashing function, that is attenuated at the low end, such that there is not much difference in score between the very cheapest solutions, but a huge difference between expensive solutions. Doesn't help Linux (cheap) look good, but on the other hand it does help Windows (very expensive!) look extremely bad.

Then the scores are simply summed across the two teams to get an aggregate out of 10000. As I say, I don't really know the specifics, but that's more or less how it works.

Re:interconnection

[sloanster]

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?

[Gldm]

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?

Re:Wow!

[TheRaven64]

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?

Their other alternative?

[blair1q]

"Attacking France and making them do all the typing," garnered 7012 points, until someone pointed out the German constitution forbids it.

Never understood MS math and TCO

[Hamster Lover]

Microsoft had, until recently, spoke of Linux and threw around a lot of numbers and FUD about the total cost of ownership with Linux and how Microsoft was so much cheaper. So, if Microsoft is that much better why offer a discount at all? I realize that MS no longer makes this claim, but what does it say about a product that to sell it must be discounted by nearly all its selling value? It's a case of paying 10% now and 100% later when licensing expires or upgrades are required and then required again and again.

This attempt by Ballmer to sell its software smacks of desperation.

What about Mexico City?

[Vainglorious Coward]

Munich will be the first city with over 1 Million inhabitants that is run by Linux

I would have thought Mexico City has a stronger claim to this title.

Re:What about Mexico City?

[Old Wolf]

Make that 1 million non-destitute inhabitants

German press is running with this one

[Nice2Cats]

For those of you who need the Fish to read German, let it be noted that this story is spreading fast in the German media, having been quickly picked up by none other than Der Spiegel, Germany's counterpart to Time and Newsweek rolled into one. If nothing else, this is a big publicity win for Tux.

Re:In other news...

[vinsci]

and in other news... every other city on the planet is using Microsoft.

No, that's not true. A couple of other cities running Linux:

• Turku, Finland (Linux continues onward march in land of its birth)
• Largo, Florida, US (Secretaries use Linux, taxpayers save millions)

By the way, a lot is happening in developing countries. On May 22nd, I had the opportunity to attend the publication seminar of the interesting Free as in Education research report by Niranjan Rajani, sponsored by the Finnish Ministry for Foreign Affairs. Other writers published in the study are Cesar Brod (Brazil), Frederick Noronha (India) and Nico Coetzee (South Africa). Also attending the seminar, among many others, was Edgar Villanueva (Congressman, Peru), who sent the famous response letter to Microsoft, giving a talk on "Legal and Other Experiences in Promoting FLOSS in Peru".

But cities are not the only ones interested in Free/Libre Open Source Software (FLOSS), of course. For example, what do you like the government of South Africa open source software web site at http://www.oss.gov.za/? Their Government OSS Strategy Document (in PDF format) could be interesting reading.

Nice math

[Anonymous Coward]

Nice assumptions you're making.

I've been happily using gnu/linux for over two years now. The benefits are NO crashes, unbelievable uptimes, and an incredible collection of software, just to name a few things. But I'll stop at that, because to the non-believers, this is preaching, and you've heard it all before.

Let's go back to your math. A couple hundred bucks? That's a pipe dream. Your math is way off. I have two desktops, 4 server/desktops, and a laptop in my home, for two computer users. While I'm not a typical or average user, your heavily discounted $200 would cost me $1,400 for your software description, not counting the server applications I use. Either that, or I'm a thief, a pirate of the high seas, and should be jailed according to Jack Valenti and his cronies at the mpaa/riaa/bsa.

You conveniently left out the fact that a home user can't copy the operating system or office application from microsoft to another computer. You have to buy a separate "license" for each computer.

While I'm not the typical user, I'd say that a majority of users have at least one fairly new desktop, one laptop, and possibly an older desktop that they either 1. threw out, or 2. don't use, because the new software from microsoft doesn't run well on older, but still usable, hardware.

And the previous paragraph also brings up another point. Was a hardware upgrade required to use the new software? Did you have to buy more memory to make the os/applications usable? Faster processor? Completely new computer?

Factor in hardware upgrades, and your minimized $200 is much higher.

I know small business owners who like office, and either purchased one copy of the os and the office suite and copied it to other computers, or they didn't even pay for the single copies. With product activation, that's all over now. So I know small business owners that are using older versions of windows and the office suite on some computers, and will never pay for legit copies for each computer. Is it going to cost them your $200 figure? Hardly.

When faced with the option of even just paying your $200 per computer, on multiple desktops, or paying nothing/one copy of gnu/linux and openoffice.org, for all their desktops and bringing their companies back into legal land, guess which path they choose?

I know small business owners still using 486 computers, 386 computers, old versions of wordperfect, and several companies that even have the old 8088/8086 boxes running dos/basica for some light calculating work, because they won't pay the prices microsoft demands for their software, and they are getting by with what they have.

I'm no expert, or sys admin, or anything like that, but I'll be setting up a network for each of these companies running a file/print server on gnu/linux, and the older computers will be used as terminals to log into the file server that will also be running openoffice.

What's the cost for the companies? I don't do it for a living, so they're getting my help and advice for free. They already have some networking equipment and knowing their requirements, all they'll need is one or a few small switches, some ethernet wire, and cards in one case, and in another case, they have cards (the owner wastes time on ebay regularly, so he picked up a lot of cards in one auction), so he'll need wiring and a switch. Besides that, the cost of one distribution if they want documentation, or a copy of my disks if they don't want dead tree manuals.

So for $200 in minor hardware purchases, these companies will be equiping a couple dozen computers with gnu/linux, and will be amazed with what they get. Instead of spending your minimal $200 x 24 = $4800. And that's not including the file server software for each company. And also, I know what they'll be using for their file servers. They in no way would be able to run windows 2000 or xp as a file server on their boxes. They would have to spend, what, another $800 or $1,000 a piece for a minimal file serv

This is not about Linux vs. Microsoft

[ites]

Read between the lines. The only reason that Munich went with Linux/OSS is because IBM is backing it. If Microsoft were offering a 90% discount to try to keep their hooks in place, how much do you think IBM was offering to install _their_ hooks instead?

It is a little naive to assume that a city government (or any large group) would switch to Linux simply because it is "better" or "cheaper". There is only one rule to understand politics and business: follow the money. In this case, and I believe it's the same in many "switches" to Linux, we are seeing Linux/OSS used as a trojan horse by interests that just happen to be competing with Microsoft.

Personally I admire IBM for having seen in 1999 that Linux aand OSS was their best weapon against their biggest enemy, namely Microsoft. Remember, this is the company that thought OS/2 would beat Windows... It has taken them four years, but now it is starting to pay off.

Expect IBM to downsize their Linux/OSS sales pitch once they have the formula working.