Microsoft Bends To Norwegian Pressure

Martin writes "Microsoft has agreed to change the terms of its school agreement contract with Norwegian regional municipalities, following a complaint by Norwegian open-source software company Linpro to the Norwegian Competition Authority. Microsoft 'introduced two kinds of flexibility in the agreement, that were previously missing,' the head of the company's Norway operations said. One of these 'kinds of flexibility' involved Microsoft not getting paid a license fee for each Linux and Mac computer in schools."

Comments

I don't understand

[rumith]

How can one demand license fees for something they don't have the right to license in the first place (in case of Mac OS X, which AFAIK does not allow redistribution)?

Re:I don't understand

[dsanfte]

Easy, offer a huge up-front discount to the schools and sneak it into the contract. People who think they're getting a deal of a lifetime tend not to look too closely at the fine print (gifthorses and all that).

Re:I don't understand

[El_Muerte_TDS]

Are you new?
Companies have been doing that a lot and for quite some time.
Its not just Microsoft, other example include SCO, MPAA, RIAA, News Corp, ... the list goes on.
They simply do it as long as they can get away with it.

Re:I don't understand

[badfish99]

It's not a fee for distributing OS/X; it's a fee per machine.

The usual licensing terms that Microsoft force on OEMs are that Microsoft must be paid a fee per machine sold, regardless of whether it has Windows installed on it or not. Of course the idea of this is to encourage OEMs to install Windows on every machine they sell, because they can't make a saving from not doing so. If you try to negotiate a "per copy of Windows" price instead of a "per machine" price, the licensing cost goes up to the retail cost, which is deliberately inflated to make it uneconomic.

Re:I don't understand

[rolfwind]

They're aren't licensing Linux or OS X to you, they just want money for every computer, which is two different things.... (yes, I agree it's pretty greedy and underhanded)...

Re:I don't understand

[ozmanjusri]

almost nobody has actually gone to the store and bought a copy of Windows.

It's not about individuals buying Windows off the shelf. It's about keeping the big boxshifters (Dell et al) on the Windows treadmill.

A local grey-box assembler in Australia pays about AU$210 wholesale for an OEM copy of Vista Business. Dell pays about AU$40 for the same thing. When a basic business-capable computer can be put together for about AU$800, that difference in the MS tax between the two businesses is what's keeping Dell alive.

Dell's selling Linux boxes now, because most of the grey-box builders offer cheap computers with Ubuntu installed, and they don't want to be left behind. But you can bet your bottom dollar they'll be shitting bricks at the thought of having to compete without that MS built buffer.

Re:I don't understand

[erroneus]

That is the perfect explanation of the "Microsoft Tax." Someone should quote this on a regular basis when someone needs to explain to others what they mean by that.

Re:I don't understand

[IdleTime]

As a Norwegian who has lived and worked in USA for a decade, it's still a mystery to me why American laws are protecting the companies and not the people. This is just a result of the consumer protection laws and laws regulating what a company can or can not do.

To the government of Norway, people are the important ones.

Here in the USA the companies can do almost anything they want and you as a consumer is getting bent over and raped over and over again and all you do, is to say "Thank you! One more time please!" What the fuck is wrong with you?

Re:I don't understand

[betterunixthanunix]

It is the result of the neoconservative movement. Anyone who speaks out for consumer rights or against ruthless business practices is labeled as some kind of extreme left communist, and here in America, that is considered to be a bad thing. In fact, under the current administration, being labeled a "liberal" is a bad thing. And unfortunately, not only do consumers wind up losing, but engineers and programmers also end up losing because of software patents and large monopolies like Microsoft (God forbid we should ever say that a business is too big).

Re:I don't understand

[IdleTime]

And yest, the average American thumps themselves on the chest and proclaim with great bravado "We are #1!'. And when you try to tell them, no, not really, you are more like 23-27 on all rankings and your citizens are treated like shit. Seeing the disaster that ensued after Katrina made me think what would have happened if such a thing had happened back home. The government would have put in any form ogf help possible including the military, It would have been a huge lift of help and the people cared for and a huge rebuilding project would have followed with one single goal, to get people back into better homes and built levies that could have withstand the strongest possible hurricane.

The worst part about the US society is that people are apathetic. As long as they get their Tv shows and celebrity news along with a healthy dose of bullshit about USA #1, they are happy. And they don't even have the imagination to think that people in other countries are better off.

The real funny part is that many Americans I have discussed with consider the Scandinavian countries to be socialistic but fail to realize that we have as many billionaires per capita as USA does, I even think Sweden has more per capita. Not to mention that even we have a national health care system, most of the players are private and not government run. And they make good money too. My experience is that Americans are socially dumber than Europeans and have been so brainwashed that they can not believe how bad the US society is.

OEM Inflation Reduction

[Shohat]

As someone already pointed out, there is a per-machine fee charged by Microsoft, mainly due to the way licences are sold in volumes to OEMs (per machine, not per copy).
It would be very interesting to see the implications of forcing Microsoft to move away from this kind of licensing, and present numbers based on the actual Windows copy installations instead of OEM per-machine licensing numbers. While it won't change the market much and the actual number of copies installed, the updated numbers could very well indicate a market share lower than 85% for Windows.
Just my 2c. I might be horribly wrong :)

Re:Why does this not surprise me...

[Anonymous Coward]

You must be new here. Being an ally of the United States is no protection from our wrath!

Re:Why does this not surprise me...

[MrMr]

Enemies of the US are for instance:
NATO Allies:
http://www.guardian.co.uk/Archive/Article/0,4273,4 456801,00.html
http://en.wikipedia.org/wiki/Friendly_fire
Industrial competitors:
http://en.wikipedia.org/wiki/Enercon
and Linux using flag burning commies that are trampling on the constitution of course...
http://www.technewsworld.com/story/31975.html

Re:Buyer beware

[gnud]

Norway should have read the contract before they signed it.

This is not a contract that all schools in Norway, or the norwgian directorate for education entered into. This is Microsofts licensing option for schools, used by SOME schools and school districts. I dare say the schools who used this licensing scheme did abide by it. Parts of this licensing agreement has now been deemed unlawful.

They did so only because they are a reasonable company

Did you even read the slashdot summary? Some parts of the contract are illegal in norway. So I think Microsoft will have to change them, since our justice department is bought, like yours. FTA:

- We made it clear to Microsoft that we were preparing sanctions, as the school agreements excluxded competitors from this market. Now that they have met our demands, we dismiss the case, says NCA(norwegian competition authority, my note) department director Jostein Skaar to Norwegian daily Dagbladet.

Re:Buyer beware

[gnud]

Heh. Even after two previews. Since our justice department is NOT bought, like yours.

Schools

[pe1chl]

Of course what makes this even more sensitive is that it is about schools.
Microsoft know very well that when they issue a contract with schools to use their software, and they can sneak in the clause that no other software than theirs can be (factually or economically) used by those schools, they can almost give away their software and still make huge profits.

After all, the pupils coming out of those schools are pre-programmed to accept only Microsoft software. They don't even know there are alternatives.
When they are employed somewhere, and they find Linux or OpenOffice, they claim "I have to be trained to work with this", and the employers are faces with training costs to use open software that they don't need to spend when Microsoft software is used.

This is put on the "cost of ownership" balance, and as training and other costs involving man-hours are often more expensive than software licenses, the balance quickly tips towards using Microsoft.

Re:Schools

[Anonymous Coward]

If an employee can't sit down at an office application and figure out the basics in 10 minutes, they're not computer literate.

CAD and 3d applications require training, word processors do not.

Re:Schools

[betterunixthanunix]

[This views and opinions in this post are not necessarily reflective of the views and opinions of my employer]

No, it has an impact on the opinion of those students about software. When I started working at Red Hat, the "non-technical" employees were given a brief, 2 hour tutorial in how to use GNOME and OOo. They must be doing all right, because as far as I know they are still employed. The reason is simple: schools don't teach people the details of how to use office suites. In high school, such things were not considered relevant to the curriculum, and in college, such things were expected to have been learned in high school. Microsoft knows that it is just a question of exposure, and the way people think about their computer. How often do you hear the word "powerpoint" used as a synonym for "presentation" or "slideshow?" I've heard people refer to a presentation created in OOo, in OpenDocument format, refer to it as a "powerpoint."

Very few people even know how to use the features of MS Office that would necessitate some level of retraining in OOo. Very people even need those features -- most people just use a word processor (I know, everyone is queuing up the, "you obviously haven't been in the workplace very" comments, to which I reply: you obviously haven't been outside your line of work much) and a presentation creator. Spreadsheets are about the only thing where the incompatibility becomes noticeable, and even then, a 10 minute tutorial on where each button is would suffice for most people. The fact of the matter is, most people are not power users, and this is no more true today than it was 30 years ago. Most people just don't know about the powerful features their software offers them.

I don't think they have that anymore to Dell...

[rolfwind]

Because Dell's Ubuntu machines are slightly cheaper than their Window's equivalents, last I heard. I don't think they would do that if they still had to pay per machine.

Though I am sure a lot of OEMs get the per machine treatment.

Re:I don't think they have that anymore to Dell...

[Anonymous Coward]

Because Dell's Ubuntu machines are slightly cheaper than their Window's equivalents, last I heard. I don't think they would do that if they still had to pay per machine.

Though I am sure a lot of OEMs get the per machine treatment.

Microsoft has been specifically forbidden in the U.S. for doing per machine sold licenses as a result of losing one of the antitrust cases. I'm not sure about the bundling B.S..

Same old crap M$ has been pulling for years

[rwyoder]

From 1991-1993 I worked for a large PC builder. While there, I learned we had signed a contract that paid M$ a fee for pre-installing a M$ OS on every machine we shipped...including the ones shipped with Novell, SCO Unix, Banyon Vines, and no OS at all. When I asked "Why the hell did we sign a contract like that???", the answer was: "Because they told us to take it or leave it." We couldn't have been competitive w/o being able to ship with M$ OS's pre-installed, and M$ knew it. So obviously, nothing has changed in M$'s behavior in the last 15 years.

Re:Why does this not surprise me...

[rvw]

Thanks for reminding me!

http://www.guardian.co.uk/Archive/Article/0,4273,4 456801,00.html The American Service-members' Protection Act, otherwise known as "The Hague Invasion Act". You can read the legalled-up version, as passed a fortnight ago, at www.nrc.nl/Doc/ASPA.pdf. The long and short of it is that America will use military force against the Netherlands to free any of its nationals held by the international criminal court (ICC) at the Hague.

http://en.wikipedia.org/wiki/Friendly_fire Enercon is prohibited from importing their wind turbines into the US until 2010 [1] due to infringement of U.S. Patent 5,083,039 [2]. Enercon claims their intellectual property was stolen by Kenetech (US Windpower, Inc.) and patented in the US before they could do so. Kenetech made similar claims against Enercon. According to the European Parliament; Kenetech seeking evidence for legal action against Enercon for breach of patent rights on the grounds that Enercon had obtained commercial secrets illegally, According to an NSA employee, detailed information concerning Enercon was passed on to Kenetech via ECHELON [1][3]

Old as Standard Oil - the drawback

[turing_m]

Ever heard of the "South Improvement Company"?

http://en.wikipedia.org/wiki/Standard_Oil

"Smaller companies decried the deals as being unfair because they were not producing enough oil to qualify for discounts. In 1872, Rockefeller joined the South Improvement Company which would have allowed him to receive rebates for shipping oil but also to receive drawbacks on oil his competitors shipped. When word got out of this arrangement, competitors convinced the Pennsylvania Legislature to revoke South Improvement's charter. No oil was ever shipped under this arrangement."

This is a minor modification of Standard Oil's drawback, except it works on your customers as opposed to a company supplying you a service. The basic idea is to use your monopoly power to force another business entity to give you money every time they do business with one of your competitors.

Not exactly.

[khasim]

There's no "sneaking" involved. It's clearly stated. EVERY machine you have MUST be counted when calculating the license fee.

No matter what runs on that machine.

Or how old it is.

Or what it does.

If you do not want to go with the Microsoft contract, you may purchase retail versions of Windows for each machine. And hope that you're fully compliant. Because the fines for piracy are far more than the cost of just paying Microsoft for every single box you have no matter what.

Ironic

[CptPicard]

Got to love it when a country that supposedly has one of these competition-stifling, bureaucracy-laden welfare states actually has a government agency that cares for maintaining a genuine competitive environment for corporations, not only for wage-earning people... :-)

Re:Typically Slashdot

[Ash-Fox]

This is one of the stories when I decide not to read Slashdot ever again. Everybody hates MS regardless what they do - and everybody praises Linux and co, regardless what they do. There are a few original ideas in the comments, but very few...

Well, I for one love Microsoft for making deals like making people pay a Windows license for every computer, be it Mac, Linux or even BSD machine -- despite the fact they won't be running Windows.

Re: Microsoft Bends To Norwegian Pressure

[smittyoneeach]

Stand by for a massage from the Swedish Prime Minister.

Isn't it amazing

[JustNiz]

how it falls to an opensource software company to spot that the government would be paying licences for every computer, windows or not?
It makes you wonder why the government and/or educational bodies themselves didn't say anything about such an obvious ploy.