How Many SUSE Subscriptions Can You Get For $240M?

itwbennett writes "According to an SD Times article, Microsoft is almost through passing out the infamous subscription certificates for SUSE Enterprise Linux that it purchased for $240 million as part of its investment in Novell. According to the article, Microsoft says that 'a total of 475 customers have used an unspecified number of coupons.' Blogger Brian Proffitt calculates that 'if indeed just 475 customers have received these coupons, then Microsoft has essentially subsidized SUSE Linux Enterprise Server (SLES) deployments to an average tune of US$505,263.16 per customer.'"

Comments

Microsoft hounds

[Yvanhoe]

Microsoft has a special hounds training program. They train them to smell a very subtle scent that exist only when wealth and stupidity is mixed. They call this program "marketing". Open source sellers have moral qualms about it and prefer to solve stupidity which they see as a core problem. Guess who is making money ?

Now the important question : am I trollish, insighful, funny or CowboyNeal ?

Re:Microsoft hounds

[Monkeedude1212]

You know, It's funny how often those 4 coincide...

Re:Microsoft hounds

[jedidiah]

> People have "moral qualms" against marketing?

Yes. Little things like lying and fraud bother some people.

Re:Microsoft hounds

[notque]

Marketing was created as a systematic way of lying to people. Marketing not only shows a contempt for Democracy (Marketing for candidates), but contempt for Markets (which are supposed to work with "perfect information", the very thing marketing avoids.)

Re:Microsoft hounds

[Red Flayer]

So only on Slashdot does all marketing become "lying and fraud". Really? Did you just run out and buy the biggest broadest paint brush you can find? What do you do for a living? How do people know about it? Do you work with Marking people? Are they lyers and fradusters? Would you have the guts to say that to their face?\

You're being very antagonistic (fine, some of what the other poster(s) have written are BS).

But let me help explain why there is a huge anti-marketing sentiment amongst a large subset of the readers of slashdot.

1. Slashdot readers tend to be very analytical. We like to get all the facts and make a decision based on those facts. Marketing often obscures the facts by which we could make informed decisions.

2. A lot of us work in product development (typically software, but not always). We see marketing staff pulling in 2-3 times what we make (or more) while not actually producing anything of value (according to how we ascribe value). We see marketing staff get promoted while seeing them goof off most of the day. Some of it may be sour grapes, some of it may be jealousy, some of it may just be a lack of respect for people who don't seem to work hard -- but in any case, it's hard for the typical slashdotter to accord respect to someone who produces nothing.

3. Some of us have been burnt, professionally, by marketing people. Deliverables are marketed that have no hope of being implemented, etc.

4. Most slashdotters feel that their work stands for itself. Most people in marketing self-promote; this runs contrary to the values of most nerds. It's frustrating to see a marketing person take the credit (and the accolades) when a lot of hard work was done by the development teams.

Maybe you just need to accept the fact that some people hate the idea of marketing. Getting bent out of shape about it isn't going to do you any good.

Re:Microsoft hounds

[ClosedSource]

"1. Slashdot readers tend to be very analytical. We like to get all the facts and make a decision based on those facts. Marketing often obscures the facts by which we could make informed decisions."

If one considered Slashdot readers to be a separate group from Slashdot posters, what you say may be true. Oops, you said "we".

Re:Microsoft hounds

[CrimsonAvenger]

1. Slashdot readers tend to be very analytical. We like to get all the facts and make a decision based on those facts. Marketing often obscures the facts by which we could make informed decisions.

Well, as long as the facts agree with their preconceptions, anyway.

From all I've seen over the years, /. readers are as likely to ignore inconvenient facts as any other demographic out there.

Re:Microsoft hounds

[Anonymusing]

As someone who has worked in marketing, technology, and product development... I'd say you summed up the situation pretty well. On a forum for marketing pros, you could reverse most of your points and get a decent picture of how marketing folks view programmers and product devs.

I think the key problem is noted in your #2: "We see marketing staff pulling in 2-3 times what we make (or more) while not actually producing anything of value (according to how we ascribe value)." Everybody has different opinions of value. But it's a chicken-and-egg problem. Which came first, the product, or the demand for the product? A marketer is supposed to deliver demand for a product; a good marketer will do it on a phenomenal level, and possibly even without resorting to deceptive tactics. But, without the product, there is nothing for the marketer to do. They need each other.

Should marketers make 2x or 3x the pay? Depends. A senior, proven marketer should make 3x more than a middling developer. But a senior, proven engineer should have some kind of parity. Also, marketing is inherently riskier: if you fail to produce demand and therefore sales, you're likely to lose the account, if not your job. But engineers, in my experience, tend to be more insulated from sales ebbs. (emphasis on "tend")

Re:Microsoft hounds

[Red Flayer]

Marketing not only shows a contempt for Democracy (Marketing for candidates), but contempt for Markets (which are supposed to work with "perfect information", the very thing marketing avoids.)

I don't think that's always the case. What if you have a good product that no one knows about? There's a lack of information in the market, which marketing can help fix.

The problem is dishonesty in marketing, not marketing itself.

Re:Microsoft hounds

[TimHunter]

From all I've seen over the years, /. readers are as likely to ignore inconvenient facts as any other demographic out there.

Slashdot's chief weapon is ignorance! Ignorance and cynicism. Cynicism and ignorance. Our two weapons are cynicism and ignorance. And arrogance. Our three weapons are cynicism, ignorance, and arrogance. And an overweening sense of entitlement. Our four...no. Amongst our weaponry are such elements as cynicism, ignorance...I'll come in again.

Re:Microsoft hounds

[nacturation]

Are they lyers and fradusters?

Hey, did you see that Jim Carrey movie "Lyer, Lyer"? I think it's about some guy who makes soap.

Re:Microsoft hounds

[cmacb]

True to a point. But if a product is really good, word of mouth takes over, the product becomes well known and eventually starts to "sell itself". What then is the need for a marketing effort in a company such as Coke, or Microsoft? It certainly doesn't consist of educating people about the product. More often it consists of giving the public a warm and fuzzy feeling about the company itself. Paving over mishaps as quickly as possible, pushing product out a retail channel faster than might be needed, developing intermediate unpaid marketing channels (MCSEs), sponsring charitable events, etc. I mentioned two companies. Windows has never been great. The one change Coke made to their formula was a marketing disaster, although the public soon forgot its outrage. If there was simply nothing close to the products from these two companies, they would need to do little marketing. Fact is, viable alternatives are there, waiting for a stumble significant enough to trip up the giant. Such stumbles rarely happen. Especially if the company keeps a groups of people around to cover them up and draw the public's attention to something else.

You will note that when some new big virus or malware comes out the mainstream publications rarely if ever mention that only those running Windows are vulnerable, even if this is the case. I don't think this is happenstance. You have to dig deep to find that the lates Flash or Acrobat vulnerability only affects those running Windows. Microsoft marketing has done a great job of convincing people that since they are the number one OS, they can't be blamed because almost all the attacks target their system.

Re:Value of Software

[Jeremiah Cornelius]

They are selling SUPPORT. The idea is to essentially kick out a RedHat subscription, at a customer ready to change the way they manage support. The MS subsidy makes this an attractive change.

SuSE runs on HyperV with native hooks - Like Server 2008 does. This is a way to ensure MS doesn't get lost in the data center - but continues to emerge as a player.

Re:Free?

[RobertLTux]

What is not "free" is support above web forums and such and "Enterprise" level distros tend to include programs that run on but are by no means Open Source. In fact even individual level distros have things like DVD players and other commercial programs that run on Linux.

In related news...

[Maniacal]

Microsoft Corporation announced today that customers who deploy their server solutions can save over $400,000 when compared to deploying a solution based on SUSE Linux.

Customer != users

[gmuslera]

Each company could be count as one customer, but theirs hundreds of users could count in the price of the license.

Re:Free?

[Maniacal]

And I think we should all write the name SUSE as "$U$E" to make up for the way we've been unfairly referring to "M$" all these years.

Re:Free?

[Xugumad]

OpenSUSE is free: http://www.opensuse.org/en/ - we run it here.

SUSE is not free. However, when your Oracle server has decided to keel over on the development server, and you've spent a couple of hours now trying to find out why, you really begin to wonder if it wouldn't have been cheaper to pay for the version with support and be able to call someone (OpenSUSE isn't an officially supported Oracle platform, so we couldn't even call them) and have them fix it.

Re:Value of Software

[Locutus]

so the coupons are only for putting SUSE inside a Microsoft hosted virtual machine? If that is the case, it's quite obvious that they spent the money to keep Windows installed. IMO.

LoB

The numbers are there

[jpobst]

If you click the links in the slashdot summary, you'll end up at the original announcement, which told you roughly how many subscriptions the deal was for: 70,000.

http://online.wsj.com/public/article/SB116249026689311557-helTbrheLKgbaJ5iO5z40ZFCiOs_20061109.html?mod=blogs

I guess that's not as much fun as wild speculation though.

Now I get it.

[Joe Snipe]

When you put it that way, Windows 7 ultimate is a bargain!

Re:Now I get it.

[wiredlogic]

It finally proves that Linux has a higher TCO.

Re:Value of Software

[koiransuklaa]

Your posts are usually insightful and this one is on the whole no exception. However, I have to comment on the "The[y] could just have just as easily chosen Linux": that statement totally forgets the monopolies Microsoft has been able to build in the last fifteen years (legally or otherwise) and the "traps" that were built on top of those monopolies. Most operating system customers _cannot_ choose non-MS products, and that is not just because the competing products themselves aren't good.

The OS and document format monopoly, the IE-trap that many companies unknowingly stepped into ten years ago and the well documented anti-interoperability stance that seemed to be the M.O. at Microsoft for some time... These things may not be illegal (although I expect they may be in combination) but I have no problem calling them immoral.

In any case saying that customers have a choice is bollocks. They had a choice ten years ago, and hopefully will again after five or ten years... Let's hope so.

Re:Free?

[Sebilrazen]

Wait, £ is 'e,' 'g,' and 'G?' and 'e' is both '£' and '€?' I thought English was confusing.

3.5 years later

[neurovish]

Novell stock has lost 30%

Microsoft stock has lost 1%

Redhat stock has gained 78%

Good going Novell, yet another stellar business decision. The $240mil had to have been the value of the entire deal, which was mostly beneficial to Microsoft in that they weren't going to be sued by Novell since Novell owns a lot of the UNIX patents. The licenses were being resold by Microsoft at prices substantially less than ($240/77)x1000

Re:3.5 years later

[McBeer]

Novell stock has lost 30%

Microsoft stock has lost 1%

Redhat stock has gained 78%

Stock price probably isn't the best way to demonstrate that a firm is doing well or poorly as it is based largely on speculation. I like to look at profit per employee. If you take that metric:

Microsoft: $156, 656
Novell: - $59,083,
Red Hat: $28,107

or if you're looking to actually invest in one of these companies, price earnings ratio (smaller is better) is a useful metric:

Microsoft: 15.63
Novell: N/A
Red Hat:69.37

So you can see while Red Hat stock price is doing pretty well, Ret Hat itself isn't making a ton of money. Though it is beating the pants off Novell for what thats worth...

Good going Novell, yet another stellar business decision.

agreed

Re:Bad math alert!

[tomhudson]

When it comes to Novell+Microsoft,, there hasn't been much clear thinking making the rounds.

For example, the whole Mono fiasco. de Icaza is a Microsoft fanboy, but that doesn't mean that openSuse is somehow "contaminated" by Mono. Just remove mono-base with teh package manager and it all goes bye-bye. Your machine will continue to work just fine (actually, better than fine since doing so also removes Kerry Beagle, resulting in a much more responsive machine).

Then there's the whole "patents deal" hysteria. What do I care about what Microsoft claims the deal was about? Ultimately, Ballmer is a snake-oil salesman, after all. The deal was more likely made as a back-door way to compensate Novell for the expenses Microsoft indirectly caused by financing the SCO attack against linux, which Novell has been doing a lot of the heavy lifting in the courts - remember, there was talk about piercing the corporate veil wrt the $50 million PIPE deal.

SLED is not opensuse. There may be stuff in SLED (which has proprietary extensions and applications), that needs Microsoft's okay for virtualization to work with Microsoft products. So what? Doesn't affect me, since I can't see any scenario where I would want to run linux instances hosted on a Microsoft server, or Windows instances hosted on a linux server.

Just see it for what it is...

[Anonymous Coward]

... which is a competitive curve ball against Red Hat. Period. Red Hat's profitable income is heavily concentrated in relatively few major volume accounts, served direct (not by resellers). So, all Microsoft are doing is cross funding Novell to try to take the average unit prices down significantly in those accounts, as part of a strategy to undermine Red Hat's business model in some way. If you follow the reporting line of the folks doing the joint selling, it maps back through MS Legal and Corporate Affairs. That said, it seems to generate more PR than pain to Red Hats business results. To date at least. Fascinating to watch.

Re:Value of Software

[Gr8Apes]

In any case saying that customers have a choice is bollocks. They had a choice ten years ago, and hopefully will again after five or ten years... Let's hope so.

Customers do have choices. The integration/cross-system compatibility has been significantly enhanced for both Linux/BSD and Macs with Windows office formats recently (so they don't speak fluent docx, neither does several 100 million earlier copies of Office).

As for the IE trap - when you take a shortcut you can get burned. Rather than develop to webstandards, they drank the MS coolaid, took the shortcut, and are now hosed.

As for MS's "sparkling" Q4, the initial reports I've seen indicate that W7 sales are coming at the expense of XP and earlier installations. In other words, they're replacements, not growth, in a growing market.