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
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
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."
Given that it's Australian dollars, and that it likely includes all the goodies (Exchange, SQL Server, etc) along with actual support, I'd say this is a hell of a good deal.
What part of "shall not be infringed" is so hard to understand?
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.