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Israel v. Microsoft, Next Round
hodet writes "From Haaretz.com, in predictable fashion,
looks like a little tough bargaining with Microsoft is
all that is needed to get your way. As many predicted after this
story, looks like all you have to do is threaten to move to an OSS alternative
to make them relent. Maybe it's time to stop getting excited about every
little announcement that comes out." The upshot of the story is that Microsoft is willing to split the components of Office in order to sell it to the Israeli government's Finance Ministry. Reader blunte, though, links to a story that discounts the importance of MS's move: "Israel re-iterates: No More MS Software. This is round two. MS has made an effort to reconcile with Israel, and Israel still says No. Israel govt's purchases account for 3-4% of MS Israel's annual revenue."
Other governments will see this as an opportunity to step up efforts against Microsoft. What were Israel's specific complaints against MS? Most government customers seem to be comfortable with their relationship as is...
Whatever happens, it's good to see that at least someone is standing fast against the Microsoft juggernaut. This is looking to be very good for the OSS movement. Not likely to be catastrophic to Microsoft, but at least it might knock them down a peg...please?
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It's good to see Israel encouraging competition (from the Yahoo Article:
"Seeking to cut costs, the Finance Ministry recently said it would not purchase new software from Microsoft this year.
It also said it would encourage the development of lower-priced alternatives. To that end, it is cooperating with Sun Microsystems (NasdaqNM:SUNW - News) and IBM (NYSE:IBM - News) to design a Hebrew language version of OpenOffice software, a freely distributed open-source alternative to Office."
After all of the anticompetitive and unethical behavior that we've seen out of Microsoft, I think that they deserve this. Especially after their I'm glad that Israel is standing firm on this. Netscape may be dead, but perhaps we've learned some lessons on how to effectively deal with an unethical monopoly.
My blog
All CIOs know it... don't buy 'till the last week of the quarter, suddenly discover an alternative solution at the last minute, wheel out competitor's products, competitor's salesguys, consultants and competitor. Beat that software vendor to death.
Must be hard being a Microsoft enterprise rep or sales consultant these days. I am sure they are thoroughly sick of hearing the words 'Linux', and 'Open Source' at every sales meeting they attend.
Not that I feel terribly sorry for them mind you...
Maybe Israel would be more inclined to purchase MS again if MS would just fix the problem, hmmm?
Of course, in the somewhat longer term, losing that 3-4% of the market will put pressure on the remainder of their sales in Israel. I'm sure that there will be a lot of businesses that will need to communicate with the government electronically. If MS Word and similar file formats can no longer be assumed to be correctly readable by government employees, then businesses will start shifting to software that produces files/attachments that they know can be read properly.
Does it matter? Well, if it does, I'd guess most of us are "Israel-neutral".
Windows is easy to use, that's true. But other people have made easier to use products before - OS X of course in recent memory, and in the past there have been others..
Office is OK (I even have Office X for the Mac which I prefer to the PC versions), but frankly although each part of office has a lot of features, I would not call any of them great. For straight-up word processing, I much prefer the version of Wordperfect I used to use in college to Word, any version. And for DTP (where you are trying to position elements exactly) Word is pretty much useless.
That's the problem lots of people have with Microsoft - Almost all of Microsoft products are simply OK. There are none that I think of that are so nice to use I find them pleasant. There are plenty of non-Microsoft products that I find very pleasant indeed - like Photoshop. And let's talk about Photoshop for a moment - somehow that remains a huge success despite most major graphical file formats (like TIF or JPG) being totally open specs. Word relies heavily on dominance exactly because no-one can exactly get reading/writing Word files correct.
In other words, Microsoft usually leads based on a strategy of ignorance, whereas other companies (like Adobe) manage to lead through competence.
In that respect I would disagree with your comment about Microsoft simply producing better and cheaper products being the reason they pull ahead. To some extent this is true, but the missing factor that makes it work is that they use any means possible to make sure everyone is using their stuff and not anyone else's, then by keeping data-interchange fixed to work best in Microsoft products they gain a huge leverage that is almost impossible to overcome. Almost impossible - luckily for everyone the slow adoption rate of various versions of Office has meant there has been time to decode the file format and make other word-processing and office suite options a reality.
The way for Microsoft to compete would be to give away copies of the latest version of Office for free, essentially hitting the resent button on the market and making everyone have to play file-format catchup again. But even that might not work well as there are still so many people on older versions of the OS that Office does not support, they might not gain traction even if free.
If Microsoft truly had a product based on quality and price, then Open Office would be no threat. As it is you have an army of users literally chomping at the bit for some other option. How good of a userbase can that be?
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Not just other goverments, but probably big corporate users as well. Let's face it, Israel is a drop in the bucket in terms of revenue to M$. But if big business decided to follow Israel's lead, M$ could find themselves in a full-scale user revolt. It's not like M$'s licensing, pricing policies and marginal quality hasn't ruffled a few feathers along the way.
Even worse for M$ is that it would be a high-profile win and an effective endorsement for OSS which could tip the balance for potential OSS users sitting on the fence waiting to see if OSS really does provide a viable alternative to M$.
When all else fails, run.
That's only insightful if Israel actually ends up buying MS Office. Otherwise the original point (this is just a tactic for Israel to get a price break) is wrong, even if the action (Microsoft offering a lowered price) is the same as your model.
Basically, I think you jumped the gun a bit to early on proclaiming your prognosticative powers. The time to be smug is when something you predict actually comes to pass.
Since there are factors at work besides price, i would say Israel is serious and will just keep telling Microsoft to go away.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
This is true up to a point. The line about "just become an OSS developer yourself!" is getting stale though. Companies have always taken that option into consideration, no matter what platform they used.
I've worked for several places where each time a special piece of software was needed for a task, the question came up of "Should we assign that job to our software development team, or is there a pre-made solution that will do the job?" These were typically "Microsoft shops" too.
Open source is teriffic, but the fact still remains that most businesses prefer pre-packaged solutions, provided at a perceived fair price and with some level of trust/confidence the product will be supported in the future. Your software development team is a costly resource that can only work on so much code at one time. You don't want them building a big solution you could have gotten 95% of for 1/3rd. the cost if you just visited your software store.
That's why companies *do* need to feel they can trust open source developers. The most widely implemented packages in Linux are all projects that are "tried and true" solutions, with long histories of updates and support. (Apache, postfix, mysql, etc. etc.)
They sell to a saturated market and need to grow earnings to maintain their stock-price.
Because Microsoft no longer gets new customers, actually they are starting to lose customers, the only way to raise earnings is to squeeze out more of existing customers locked in.
Their new licensing programme is doing exactly that and is just the start.
The irony is that only the Microsoft-loyal customers are getting ripped off, while customers who haven't bought into MS-technologies (and run servers on Unix) like for example Munich get huge offers for discounts.
However with rising licensing costs, the incentive to move away also rises, so I don't think Microsoft can play that game much longer. Very soon their earnings will begin to fall. Either because they lose just too many customers or because they will have no other choice other than to lower prices.