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Details of Linux-in-Munich Deal Revealed
An anonymous reader writes "USA Today is running a piece about the lengths which Microsoft went to in order not to lose the government of Munich's account to a Linux-based proposal from SuSE. Interesting to see how these types of contracts are structured, and just what Microsoft is willing to give up to prevent losing to Linux."
It is really impressive to see that Munich went with Linux even though the price tag was higher than Microsoft's. The affordability of Linux is a definite plus, but too often Linux is played up in the media as being the "less expensive alternative to windows". I think that this downplays the other great advantages of Linux. Glad to see that Munich appreciates a great product when they see one.
lysergically yours
From the article: "...Mozilla, a Web browser that can perform basic workplace tasks"
How about: "Mozilla, a web browser with more features than Internet Explorer"
I am all for linux, but now are we going to bash Microsoft for trying to do business. People this is business, its a cut-throat world not a woodstock concert.
Of course M$ will do everything in its power to bury linux, what's the news here ?
for the last time people, I am "frodo from middle eaRTH", not "middle eaST".
The real interesting thing that this article brough out was that the decision by wasen't made due to up-front costs: Microsoft brought their bid down to below IBM/SuSE's bid by several million dollars.
Probably, the government realised that the Microsoft solution had higher total 'costs' due to:
*vendor lock-in
*poor reliability
*poor scalability
*poor security
*poor standards compliance
amung other items.
Moneyed corporations, non-working 'poor' and criminal prisoners are turning productive citizens into tax-slaves.
...Microsoft last March dispatched CEO Steve Ballmer to the rescue....Documents obtained by USA TODAY show Microsoft subsequently lowered its pricing to $31.9 million and then to $23.7 million -- an overall 35% price cut. The discounts were for naught.
for the non believers: The CEO of MS himself went to a sales call and lost the sale, you better start beliving Linux is a threat to MS.
3 Cheers for all Linux, OSS, and Choice! Hip Hip Horay!
... was leaning toward a switch to Linux, the upstart computer operating system whose open-source code is continually improved by volunteer programmers worldwide.
How many big contracts have to be won by Linux companies before the papers realize that it's been around for a dozen years? Or that not everybody working on OSS is a volunteer?
I just noticed.. the article sums it best:
Open-source advocates counter that Munich proves tech buyers are beginning to demand price cuts from Microsoft while giving Linux a serious look.
-Valiss
Though Microsoft underbid IBM and SuSE by $11.9 million in Munich, city officials were concerned about the unpredictable long-run cost of Microsoft upgrades
The city paid MUCH more money to IBM/SuSE because they didn't want to be locked into Microsoft's refusal to support/insistence on upgrading their software after X number of years. Linux let them upgrade when they wanted to, and not before. It was a long-term financial decision which, I'm certain, IBM and SuSE emphasized heavily in order to score a win.
Big, big news to other cities and corporations out there. A Microsoft contract is a dangerous thing when money is/will be tight. You can save a lot of money down the road if you make the switch today.
Quote of the year IMHO: "Microsoft's philosophy is to change our software every five years," Strobl (Munich council member Christine Strobl ) says. "With open-source, it is possible for us to make our own decision as to when to change our software."
It makes me feel good to know that finally someone other then a bunch of geeks is getting it.
- The negociations where in step with what Microsoft is accostumed to doing with big accounts, regardless of who or what the competing "thing" happens to be. And it's no different from what other big software houses (Oracle in particular) do as a matter of fact when engaged in stuff like this. The idea that Microsoft was somehow "more desperate" because it was bidding against Linux is stupid.
- Yay free software. They ended up spending millions of dollars more over the Microsoft package. I'm sure training and attrition will offset whatever benefits they could have realized by avoiding the "forced upgrades", which SuSe will most certainly start doing eventually when they come to their senses, just like RH did. In any case, Microsoft was willing to defer the upgrade cycle for them. So it was more expensive and it will probably be about the same in the long run
- The vote was 50-30. Doesn't seem to me like an "overhelming" victory. Well, I guess it depends who you're rooting for.
Furthermore, I'd like to continue seeing articles about this topic here. I.e., how is the switch going, how much Munich ends up spending over the next 12 months, what their rate of attrition is, etc. All of previous articles smacked of "hahaa, we stick it to the man!!!1", which is nice but worthless unless all we're interested in is FUD and fluff.If anything, this will be watched by other cities and companies to see how well it works. I hope it does work, because Microsoft will be forced to change the way it does business. But it better damn work.
Letting the mayor not to lick Gates' boots?
Offering some Munich citizens the possibility not to send their first borns to Redmond?
I think, the German government is not keen on using Linux over Windows,
and they will appreciate when someone comes along with a good-looking
statistics that allows them to go Windows without risk of being held
liable later.
I am not so sure. SuSE is a german company, thus the money stays within the german economy unlike with the M$ solution where the money would go across the Atlantic.
There always was an interrest in Linux, but they couldn't justify it because nobody big was backing it.
If Munich pulls this off you can expect others to follow suit. Munich isn't really a very poor city there are poorer ones out there.
If you want to e-mail me, use my PGP Key.
In the case of Munich, as the USA article points out, it's the fact that the city is replacing desktops.
To Microsoft, this is the Kiss of Death. They really only make a huge profit off of two items:
Desktop OS - the so called "Microsoft Tax" that is the reason why when I go to dell.com (well, not that I would, I'd go here instead for my Unix needs), I can't get a $100 price discount on a new computer by having it be "naked".
Microsoft Office
Other than these two, they don't make a lot of money on other stuff. Oh, some on server licenses, but a pittance compared to Desktop OS sales and Microsoft Office. The Xbox is losing money, I haven't heard anything profitable about their cable investments, and their games division (with the exception of the Xbox) is doing decently.
But the two things that keeps them with that $35 billion in cash is Desktop OS and Office. And Munich basically said "no" to both of them, so they would have the ability to upgrade when Munich wanted, not when Microsoft wanted.
And that's been Microsoft's winning business edge for years. We'll sell you Windows 98 - and in 3 years, you'll have to get Windows 2000 if you want to be able to do stuff with your vendors, your co-workers - you'll have to put it onto your machine at home if you plan on taking work home and doing stuff there.
Munich just got off the Wheel of Upgrades. Now you wonder how many employees will feel they have to upgrade their home computers? How many employees (espeically managers) will go to the IT department and say "Hey, I got a laptop - make it so I can do the same stuff I do here in the office on the road", and they walk out with a SUSE installed machine.
There's still some things they'll have to do on the Desktop end to make things as easy to use as the Windows world, and I trust that will be part of what Suse and IBM were just paid for.
But this is a major step for Linux in business, and Linux on the desktop. And what can Microsoft do about it, other than really compete for the first time on something other than forced installation upgrades?
For the record, I don't think Microsoft is "evil", but I do think they haven't had a real challenge in business because of their predatory business practices. I think it's great they're having a real competitor. Costs will go down, products on both sides will get better, and it someday I might be able to migrate back from OS X over to Linux - once it provides the same ease of use with Unix power I get from OS X.
And competition with Microsoft is just the thing it needs to get itself there. I'm patient - I'll say another 5 to 10 years before I have what I want.
But Munich is a good start.
Oh, and this is all just my opinion - I could be wrong.
52 Weeks, 52 Religions with John Hummel
They simply wanted to deal with a German company, not an American one.
This story is really interesting for showing us what, as the blurb says, MS will give up to try to hold on to its contracts. Please permit me to juggle for a moment...
The fact that MS was willing to let Munich unbundle office is indicative that people dont want to pay for huge monster suites that they arent using most of. And in a govt organization this is even more true. Your average memo writing paper pusher doenst need to use excel.
MS, being the monster it is, is tripping over itself trying to dodge the bullets of its smaller, faster, and more flexible competitors. It's as if MS wants to jam the status quo down the throats of large organizations, hoping everyone will think "well everyone else uses MS is going to have to also to work with the rest of the to world." (not to mention I [and probably you] have heard variations on this theme before)
In today's climate of cost cutting and internet security disasters, the managers want to make sure people have the necessities to perform their job functions and not a bunch of extra crap to screw around with. A one size (license) fits all approach cannot meet that goal. The fact that the CEO has to show up implies 1 of 2 things. 1) The salesperson didnt have the authority to make such changes that the customer wanted. 2) Or if he did the initial beating over the head of the initial proposal spooked Munich so much they needed executive handholding.
Lint - Professional amateur analysis while you wait. Call for more details!
"First they ignore you, then they laugh at you, then they fight you, then you win."
Guess we're at the "fight" part. Wake me up when it's over.
Thanks!
Maw! Fire up the karma burner!
Germany is in recession, and $12 million of tax payers moneys is quite a bit of money, even for Munich. Most of Munichs inhabitants are using Microsoft anyway, so SPD might have some difficulties to explain their decision to their voters facing unemployment.
And yes, more Linux means more freedom.
After all that is the way MS, works you get assurance the the stuff you buy will work, then if the device sucks you have no one to blame but the manufacturer. If the North American retail and business market is to be addressed then the sale of Linux ware and tech help in retail need to be a focus for Oss people.
Don't give me any of that Bill Gates crap about everything being free and you cannot make money, there is no reason why software companies cannot use and improve Linux ware it is just that only the ones that offer effective customer support will thrive. In business that is the way it should be, not the current system "you have to use this software product because our hardware only runs this way!"
OH THE SHAME I fell off the wagon and use sigs again!
While I make a living from M$ software I'm always looking at the Linux alternative, I've just begun installing and maintaining both Linux and Windows servers for a hosting company. The OSes are split about 50/50 all on Intel hardware.
High profile decisions attracting media attention like this could cause a snowball that crushes all over M$ at a speed never before seen in the business world. I'll even sum the reasons up for you:
1. Microsoft has just pissed of all of it's largest customers who will want to know why they don't get breaks like this.
2. The public will begin to see that hundreds of M$ programmers can't possibly compete with thousands of OS developers.
3. Every company that reads about deals like this will also be expecting huge discounts from M$.
4. Forcing companies to upgrade every 5 years means that each company must also evaluate their IT needs, this continually forces a company to reevaluate their IT infrastructure which means a regular comparison against OS products.
5. What sort of a company allows details like this to leak? Now all of their customers are going to expect huge price breaks.
6. OS might be more expensive to support now but as soon as the huge shortage of OS network engineers is resolved support costs will come down - forget the desktop argument, Linux isn't getting very far now because there's so few people that can install it for small to mid sized businesses for less than $100 an hour.
7. Did I mention how every company is going to start threatening to go OS to get increased benefits and discounts?
8. Even though there is a shortage of qualified OS network engineers the ones that there are know their beans, they know their hardware and software a whole lot better than an equilavent M$ engineer.
9. M$ has a terrible market name and security history. The whole of the IT industry has monumentally changed over the past 7 or 8 years. Windows 98 and Windows NT were never made with the internet in mind, every "update" and "add on" to Windows is another patch to make Windows do something it was never designed to do. It's little wonder there's been so many bugs introduced over the years.
10. My God! M$ customers are being given the green light to hold out and bargain hard because M$ will cave in the end.
There's a few other reasons that this could happen too. M$ OSes have gotten more mature and gotten exponentially better with every revision (discount Windows ME).
The basic trade off between OSes for companies to consider now is this:
With Linux you are locked in with your support company (small businesses especially) and there are far fewer qualified people to work on your network
M$ offers standardized systems and a tried and true support methodology. Real world performance with the history to prove it.
I consider M$ products to be the superior when competing with other OSes. Windows 2000 always installs on standard hardware and I know that if M$ says a product will do something then I know it will do it (maybe not well or as well but that's moot).
Anyway that's my take on this, I hope everyone has bookmarked this story and emailed it to their managers.
John the Kiwi
You don't know MS to well do you.
MS needed to make Linux didn't get a big deal and some legitimacy. They could have lost money on the deal and wouldn't have cared.
If someone small comes and says we want discounts and am pretty sure MS would say "No"
And then the small company would evaluate the cost of switching(linux or some thing else) to keeping current software to upgrading.
If enough small company switch then maybe MS will change but until then... don't hold your breath.
Munich ... uses 175 Windows applications for such tasks as managing police records, issuing permits and collecting taxes. ... Linux ... does not work well with Windows programs. Another layer of connection software is required, adding complexity. Unilog judged Microsoft's proposal -- to swap out all existing versions of Microsoft Windows and Office for the newest versions -- as cheaper and technically superior.
It seems that the only advantage Microsoft really had was that it worked, sometimes, with it's own software. Training was offered by both teams, implying no difference. Once those 175 applications are ported out of Windoze, what will Microsoft have to offer? Painful file formats? A single screen GUI, inferior networking, poor security, inferior stability and data loss are all hallmarks of Microsoft software. In six years, what's Microsoft going to do to try to win back the business?
Microsoft screwed their only advantages. They had a tremendous advantage in user familiarity and widespread use. The advantages this offered was supposed to be ease of information transfer and hardware compatibility. Instead of using that, they got greedy and broke interoperability to force upgrades. They also abused their deathgip on hardware manufacturers the same way to foce purchases of new equipment. With advantages like those, who needs flaws? Microsoft squandered money on anti-competitve behavior when it should have been fixing it's own software.
Free software has stuck itself right into these shorcomings. You can exchange data bewteen free programs though accepted standards. Why you can't get a hardware driver for the new Windoze, you can be sure the old one still works with free software. Free software is doing what Microsoft prommised to do but did not. That's not surprising because free software is made by people who have a job to do and they don't have an incentive to break things.
Friends don't help friends install M$ junk.
Installation, training, and support are not free. The big payoff is avoiding the costly future forced upgrades. Hopefully they'll use the savings to invest in development of local government type applications that'll help other cities make the transistion too.
Time is what keeps everything from happening all at once.
IBM is a US company, last time I checked. Maybe they moved? Its worth noting that SuSE does market the most viable Linux based OS for the European market, and that their supported hardware list is quite impressive. I usualy recommend SuSE to my non-geek friends as a good turn-key OS.
"Microsoft's biggest enemy is themselves," says Gartner's Silver. "They do things that make people very upset and engenders a lot of resentment."
:-)
That about sums it up for me. What upset me the most was the inability to master their products. I've worked with small businesses for over 7 years installing and supporting LANs. I began my career as a CNE with Novell NetWare, transitioned to Windows (which was the worst 4 years of my life), and now work exclusively with Linux. From my experience, It's impossible to avoid huge time-sucking disasters because of Microsoft's constant upgrade and patch cycles. Their End User License Agreements (EULA's) absolve themselves of all wrongdoing, and leave techs like myself holding the bag. After years of blowing out the operating system and reinstalling, hoping that a shotgun approach of service packs and hot fixes would make the problems go away, and reading everything under the sun only to find documentation fraught with errors, I gave up. Which is why two years ago I adopted the mantra "I don't do Windows" and set my mind on Linux. My current job is with a company moving their 2 servers & 22 workstations off Windows NT/98/XP, and onto Debian GNU/Linux.
And I'm happy now
There's no such thing as a Windows expert. There's only "I can flail around in the dark better than you can".
Ruby on Rails Screencast
I find this really ironic when remembering all of Microsoft's FUD about TCO. Paper after paper proving that TCO for Windows based systems being lower than Linux-based. The people of Munich are NOT stupid! They did NOT pay more for Linux because it was going to cost them more in the long term!
One quote in the article sums it up best: "Microsoft's biggest enemy is themselves" says Gartner's Silver.
That also means it is easy to fix, providing they actually open their eyes and see things as they are. If Microsoft's response is the same as it always has been (these are our enemies and we must crush them) and not as it must be (a few simple changes to the basic philosophy of Microsoft such as treating customers as a valued resource and actually offering more value for an upgrade to convince people to buy it rather than schemes to force an upgrade down people's throats) then they simply will not survive.
Another interesting quote: Munich "reinforces for us that we operate in a very competitive marketplace," says Maggie Wilderotter, Microsoft senior vice president of business strategy. Holy shit! Did we really hear that from a Microsoft vice president? I have the feeling this time Microsoft really means it, as opposed to press just for the benefit of the DoJ.
And one more interesting quote (I promise, last one): Should its desktop software sales stagnate or, worse, decline, Microsoft's profit could plummet, and it could find itself with a diminished ability to bankroll promising, but costly, new ventures, such as tablet PCs, smart phones and online video games.
Oh, bullshit! This has been standard partyline from every monopoly since Standard Oil; the world will be a poorer place if Microsoft doesn't make all that money! Truth is, if those "promising, but costly, new ventures" are valid, they will be funded and produced. If they re invalid, not even all of Microsoft billions wil be able to make them profitable. And I find it real hard to believe that a company with cash reserves larger than most countries' GNPs cannot bankroll just about anything they want, even if all revenue stopped tomorrow.
I say... more power to them. They promote linux by handing MS's sales folks their asses.. they should get some street cred for that. What, you think the pawn administration that the US would want to rule your country would do the same?
Wasn't it RMS who said that ultimately software is always political?
Make sure everyone's vote counts: Verified Voting
The city paid MUCH more money to IBM/SuSE because they didn't want to be locked into Microsoft's refusal to support/insistence on upgrading their software after X number of years. Linux let them upgrade when they wanted to, and not before. It was a long-term financial decision which, I'm certain, IBM and SuSE emphasized heavily in order to score a win.
I think plain cold reality also played a part.. Think about the two options
a) Pay 25 Millions to Microsoft, most of the money goes to the US, and ends up in shareholders pockets or as stockoptions for employees over there.
b) Pay 36 millions to SuSE, all of the money stayes in Germany and ends up as salary of lots of people. And when you calculate the multiplier factor of this money for the economy, it becomes an even bigger +
Now, let's say you're a German politician, what would you do ? (Apart from canceling your summer holiday in Italy :-)
echo '[q]sa[ln0=aln80~Psnlbx]16isb572CCB9AE9DB03273snlbxq' |dc
Microsoft wanted $36,600,000 for the city to keep using Microsoft products - after microsoft pulled the support rug out from under them - except that they have to upgrade their OS to the newest offering, as Microsoft has decided they will no longer support the OS they originally sold them. Seems to me that, if Microsoft can decide to EOL a platform and stop supporting it before the official EOL date (as they did when they refused to create/release a security patch for NT), then any large user would be foolish to purchase their product without contracts in place limiting Microsofts' options - does anyone really think Microsoft will agree to that?
So Microsoft sold Munich a software bundle based on NT for some $$$. I am assuming it was millions of dollars, probably tens of millions. Now Microsoft won't i.e., choses not to support that platform - and it is propriatary software, so no one else can either and wants $36,600,000 more. Except there is now a competitor, so they reduce their profit (from 80%) and eventually get to $23,700,000. (1. Competition is GOOD for the consumer - 35% off in this case, 2. Propriatary software is BAD for the consumer - in this case it is the reason Munich has to spend $20-$30 million after ALREADY BUYING A SOFTWARE SOLUTION FROM MICROSOFT.)
I don't think Microsoft should have to support a platform forever - or even any longer than their contracts require or they are legally obligated. But the consumer should be allowed to chose between options - including support - which they can not do when they choose Microsoft OS.
I am running Redhat Linux, distribution 8.0, but have compiled the kernel - the source code is included in the basic install - with only the options I need. I have updated the kernel several times, and have updated binaries and compiled apps from source code. My computer is running the latest stable kernel version, and if a new version is released tomorrow, I can be running the newer version within hours. I don't have to wait for a large company with many other things - including making a profit occupying its' attention.
I can choose to upgrade to a later Redhat distribution. I can, if I choose to, stay with the current distribution, but update the kernel. I can, if I want, get support from Redhat or, again if I so choose get support from another vendor. These are not, with the exception of the first option, choices available if I am using Microsoft Windows.
Have mod points so posting anon!