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Annual Cost of Microsoft Monopoly: $10 Billion
An anonymous reader writes "Microsoft's deals with major PC vendors lock users out from alternative options, such as Linux. A recent whitepaper calculates that the cost to industry of this Microsoft monopoly is $10 billion per year."
This is what happens when a near-monopoly is allowed to thrive...it costs everyone.
Don't be a looter...and yes, I know that it's spelled with an "A" instead of an "E".
RTFWP. They figured out what it costs Australia, and they have numbers from Microsoft saying that Australia is 2% of MS's income.
They extrapolate, based on their figure of $200 million in savings, which is 2% of $10 billion.
In reality, in any given year, Microsoft makes $40 billion. Does it really seem ridiculous that 10 of that might be from their monopoly? It seems sensible to me. The WP points out that in buying a computer, that it used to be (ala early - mid 90s) that the hardware was about 85% of the cost, and the software 15%. Now, hardware costs have plummeted, whereas software prices have gone up. Now when you buy a computer, about 65% of the price is hardware, and 35% is software. Good points, if you ask me.
libertarianswag.com
Over the past decade, the personal computer industry has seen a major reduction in competition in the operating system platform market. A computer operating system platform is the software which computer users learn to operate their computer with, the software that independent software vendors develop applications for and the software that third-party computer hardware developers create compliant hardware for.
Competition in the desktop computer operating system space is practically non-existent, with one platform from a single supplier commanding a very high proportion (over 95%) of the Australian market. This single platform from a sole vendor is Microsoft Windows. Cybersource believes that a sizeable portion of this market share is due to the fact that over many years, most consumers were never given the option to acquire alternative operating system platforms. Instead, Microsoft Windows was always bundled with most vendors' computer products, whether consumers wanted that bundled product on not.
We have seen that the Australian Competition & Consumer Commission (ACCC) has acted in the best interests of consumers to increase competition in such areas as telecommunications. Cybersource wants to see similar actions introduced in the computer operating system platform space.
In the software market, as in the telecommunications market, a single, powerful and well-leveraged vendor can cause the reduction of real competition and the corralling of almost all consumers into a single monopolistic platform situation. This causes significant reduction in choice, price competitiveness and innovation. Cybersource calls upon the ACCC to rectify this situation for the benefit of the local Information Technology industry and of all Australian IT consumers.
Key Points
1. It is impossible or extremely difficult for consumers to purchase a desktop PC or laptop from a tier-1 or tier-2 computer manufacturer without also having to purchase an OEM copy of Microsoft Windows operating system platform.
2. Cybersource believes that this greatly reduces choice for consumers and competition for the industry. Such a reduction in choice, and consequent reduction in competition, costs the Australian economy hundreds of millions of dollars annually, through paying one vendor needlessly high prices for monopolistic products.
3. The computer market is many ways similar to the telecommunications market. When one vendor has over 95% of the market, that vendor should be bound by a universal service obligation to ensure that all consumers can access the content, documents and data which reside on that vendor's platform. Neglecting such an obligation hinders all consumers and third-party developers not using that vendor's platform, further increasing anti-competitive pressures.
4. Cybersource believes that such anti-competitive practices should be stopped as soon as possible, through remedies introduced by the ACCC, to secure both a broader competitive base and increased options for consumers.
5. The first remedy that Cybersource seeks from the ACCC is that all tier-1 and tier-2 vendors should be required to offer their desktop and laptop products without an operating system pre-installed, that this choice be presented to consumers as broadly as the products themselves are, and that the price difference between the with and without operating system options should also be clearly and broadly presented at retail outlets, on vendor marketing literature and vendor websites.
6. The second remedy that Cybersource seeks from the ACCC is that Microsoft should be required to offer unfettered and unencumbered access to all major content, document, data and applications formats which could enable interchange and interoperability between users of its platform and users of other alternative platforms.
For he today that sheds his blood with me shall be my brother.
HP pulls the same crap. If you look at their otherwise very nice dual Opterona machines, they have one version with WinXP Pro that is $3499. The closest Linux version, with the HP Linux installer kit is $3799. Note that these machines do not come with Linux pre-installe,d they come with the HP 'linux installer kit' so it doesn't cost HP any more to produce these machines. In addition, these machines are specifically targeted at the Workstation market, not the Office PC market, so Linux would be a natural fit in this market. But some mysterious force prevents HP from selling the equivalent machine at a lower price with no OS. It is pretty darn obvious that the DOJ should have required that Microsoft's OEM agreements should always allow distributors to sell machines without Windows discounted by the cost of Windows. Instead, after a successful anti-trust prosecution, we get the same old slimy, probably illegal tactics that we have always seen from Microsoft. Thanks, W!
Actually, it's not as insidious as you might think. Notice that the Dell with XP also has a bunch of other software, like AOL, Wordperfect, etc..
AOL actually pays Dell a fee to include their software, as do the other companies that Dell provides "trial" software for (JASC and others, for instance). This allows them to sell the PC at a lower cost.
Also note that the regular price for the PC is $349, and the $299 price is a special.
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I do have to agree that Microsoft dominates the PC industry with a lot of unfair partnerships and agreements with PC vendors. But to say that PC consumers are losing billions because of this "monopoly" is a little far fetched. This assumes that PC users actually WANT Linux, and are not being offered the choice.
Lets put it this way. In a fair world, both Linux AND Windows are offered on every Dell computer. Many assume that Linux is FREE and Windows is NOT. Would the Linux option actually cost nothing compared to buying a Windows license on a Dell computer? My honest opinion is NO! While you are able to get Linux for free by downloading it online, a company like Dell would prefer to setup some form of Linux support option which you will have to pay for. Linux IS FREE, Linux support IS NOT! Also, considering the sheer amount of support required by newbies to simply install and use Linux, Dell would quickly want to absorb the extra cost of support by charging SOMETHING for installing Linux on their PC's.
The bottom line is, people often over estimate how free Linux really is. In a perfect world, if Linux was as easy to use and configure as Windows, then yes, you are losing $100 every time you buy a Dell computer because they charge you for the XP license and don't offer you a viable free alternative. But in reality, Dell would charge about $100 to install Linux on their PC's because of all the extra headaches and nightmares it would cause them in technical support alone.
I haven't thought of anything clever to put here, but then again most of you haven't either.