Slashdot Mirror
Telstra Used Linux To Get Microsoft Discounts
awful writes "Last year Slashdot ran a story about Australia's largest telco moving to Linux desktops. Turns out it was all a way to get some tasty discounts from Microsoft. The Australian is reporting that Telstra just signed a four-year deal with MS for $AU15-20 million, for 40,000 users. No figures yet on how much of a discount Telstra got, but MS might want to rethink handing back all its cash to investors if this is how they're going to do business from now on ..."
One small setback for Linux; one giant leap down the slippery slope for MS.
If this sort of thing isn't direct evidence of the sure eventual demise of the Business Model as Bill Knows It, then I don't know what is.
"Thank you for calling Microsoft Corporate Sales--in order to direct your call, please enter 1 on your touchtone phone if you are oblivious to Linux. Enter 2 if you have priced a Linux solution for your enterprise. Enter 3 if you have considered a Linux operating system..."
"...all the labours of the ages, all the devotion, all the inspiration, all the noonday brightness..." yada yada
Unless my math is wrong, they're paying about $500/user. $125/year. But since most companies will not upgrade the OS or applications more often than every 4 years, they basically are paying $500 to Microsoft for each user. That's a ton of money-- maybe it's all worth it, but I guess this is what people are talking about when they mention the "Microsoft Tax."
Before anyone starts bashing Telstra, let me point out that they've got a BIG linux grid running that they do their data processing on.
Ha! I actually laughed aloud at the OS2 reference--and yeah, I predicted their demise then too and by all rights I should have been correct. I was an early and heavy user (through an employer), but that's another thread.
Having a sort of "dual" price structure though, I think, is a more serious crack in the dike even than making a foolish "vision" call (OS2).
I'm sure that MS will eventually shape-shift to fit a changing marketplace (MSLinux (TM) maybe), but clearly this kind of easy manipulation on the part of customers does not bode well for the status quo.
"...all the labours of the ages, all the devotion, all the inspiration, all the noonday brightness..." yada yada
Monster Telstra eats you.
Mongrel News all the news that fits and froths
when you consider it is Telstra who we are talking about. Telstra seems to want to charge whatever it wants, however it can only increase it's charges in line with costs. So jumping on Linux would decrease thier costs and the ACCC would jump all over them.
Maybe I'm just a cynic and my logic is flawed, but it doesn't suprise me that one monopoly should use get into bed with another monopoly.
I was doing some security work for goverment agency in South Carolina and this was the method we used for getting better deals out of Microsoft.
MS Sales rep: "This is the best deal we can give you"
Client: "OK thats fine. Our IT staff is suggesting moving to Linux"
MS Sales rep: picks up a cell and calls the office....."uh-hu"..."linux"..."uh-hu"....hangs up phone. "Ok how about this deal on a Open License package. We can knock another 20% off."
The Microsoft sales team has been ordered to win over Linux at all costs and they mean it.
Free Unix? Free Windows. http://www.reactos.com
Honestly, doesn't every large store/business do this? Hell, even Best Buy or Future Shop have a 'price matching' scheme where they'll match the price of the competitors product - just to keep your business.
So again, is it just because it's Microsoft? "Oh no, Microsoft had to lower their revenues!" Guess what? Telstra's cost of switching is starting to rise slowly, as they keep with MSFT.
Jeez. "News."
-calldown
Besides, with MSFT the nickle and dime treatment never ends. You pay, pay, pay. Not to mention all the other software you have to buy to keep their crap running right.
Personally, I think it was a bad choice. But if you're going to stay with MSFT, then that's the way to deal with them.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Of course they are willing to burn a lot of cash to maintain market share. MS have yet to have a quarter that comes near to breaking even in their mobile biz. They can afford to wait their time and burn cash in the mobile sector to keep their hands on corporate business.
Engineering is the art of compromise.
In reality all Linux is doing is putting the commercial Unices out of business... I mean Microsoft's pricing keeps getting more and more outrageous and Linux is *free* for Godsakes.
Wrong. It is fundamentally different because this time it ISN'T Microsoft in the spoiler's seat. Microsoft has been leveraging a lucky break (PC-DOS with rights to MS-DOS) with being the low-price leader. Now its competition is a no-license-price leader. Tables turned, MS floundering in its new role.
-- @rjamestaylor on Ello
I read somewhere that the Windoze family of OS'es, and the Office softwares are THE big money-makers for M$, and other products are just riding along on that capital.
A story like this just shows that from a customer's point of view, Windoze/Office have value (that M$ can cash in on), but having Free/OSS alternatives, lowers that value.
So making Linux a more attractive alternative, lowers the net value of Microsofts golden eggs. How nice...
Telstra should watch out. It can be a bad idea to fuck with a company with whom you are putting a lot of trust into. In the car repair bussiness I would give a lot lower quilty of service to those who tried to bring my price down by saying they would use one of the competetors otherwise. I gave them the competetors level of service. MicroSoft could even realy screw with you. If really needed tech support they could totally f you up.
if somehow you can work your way into a sales model where, as happens with an auction, or with car sales, you're somehow able to tailor your price to what exactly each individual customer is willing to pay.
This is known in the world of microeconomics as "perfect price discrimination" and is indeed a very good thing. Also in the "Price Discrimination" category are "student discounts," and those "travel discount guides" you see at every [US] fast food place, with coupons for motels at a few dollars below the normal rate. All firms would like to achieve perfect price discrimination, where each individual pays the maximum he's willing to pay for the good or service.
The Telecom is doing the same type fo shit my company does with Intel, and that is cry "We aregoing to start a line of AMD servers/desktops to get a better price on chips. I am not allowed to mention the company (I could get fired), but I will say it has four letters begins with a D :), and dude your getting one......
When the going gets tough, the tough get drunk
no way, tel$tra has a long way to rise to get to the level of scum .....
0 273820%5E15318%5E%5Enbv%5E15306,00.html
to see just how totally fscked internet access is here just look at this
http://australianit.news.com.au/articles/0,7204,1
sure prices have finally started to drop but, as they drop so does the quality, and yes while it may be hard to believe, the "service" can get worse, although not sure how far it can fall
from personal pain, the tel$tra cable service is third rate, and thats on one of the rare good days
so far today its dropped out 14 times, then comes the mail server which I have been unable to talk to for over 2 years
not forgeting the news server which all of a sudden will not even resolve
call the helldesk, to be told "you need to use a supported OS, before we can sort your problem", er hello, I am using a Mac, but no thats not enough seems I have to downgrade OSX to 10.2 before they will talk to me
After 18 years in the IT business (data comms, infrastructure design etc), I should know whats happening, but no, some trained monkey with zero experience and a single digit IQ, tells me they he knows its my problem, even after I proved them wrong every time I have had a problem in the past.
these are the same idiots who told me "I would be able to ping the mail server if I ran outlook", yes really!
and no, I cannot change ISP, all down to my only voice line being pair gained, which rules out ADSL and even a dialup if speeds >28K are wanted. And just guess who owns the local loop, yes tel$tra.
That's the magic of it all ... it's not a bluff. If Microsoft doesn't actually cough up the serious discounts, the Linux card gets played. Unless staying with Microsoft is significantly less expensive than changing to Linux, Linux gets installed over MSFT. The more security (and other) problems MSFT operating systems and application programming have, the greater the margin they have to beat Linux by.
Even with the discounts, the sales are still profitable (they have to get below ~15% profit before Bill starts looking for the exit) but the days of 'gag a maggot' margins are nearing their end. This leads, necessarily, to the question of how long MSFT stock will remain at its current levels.
And, if MSFT stock options become less attractive, will they be able to retain their programmers for the same cash wages?
A loss of profit margins leads to a loss of stock value which leads to a loss of programmer income which leads to a brain drain. Responding to the brain drain by upping the cash component of the wages narrows the profit margins even further.
This cannot be good for Microsoft.
That the world operates under a free market is a myth my friend.
Think: US taxpayers pay for the military budget. Military helps invent things for the tech industry (like the Internet). Tech industry uses this free R&D to profit. That is the government subsidizing businesses. Not strict free market.
Think: Import/export tariffs.
Think: The recent article on Slashdot describing public subsidies of football stadiums.