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OSS Officially On Microsoft's Financial Radar Screen

Posted by timothy on Tue Feb 04, 2003 07:37 AM
from the preemptive-boilerplate-yammering dept.
seldo writes "More news from Microsoft's latest quarterly filing: according to eWeek, Microsoft says it may have to lower its prices in response to competition from open-source software. From the filing: "To the extent the open source model gains increasing market acceptance, sales of the company's products may decline, the company may have to reduce the prices it charges for its products, and revenues and operating margins may consequently decline". This is a fairly major revelation from Microsoft, and if it happens, it may be one of the biggest wins yet for open-source software: what do you know -- competition works!"
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  • good news (Score:3, Interesting)

    by garglblaster (459708) on Tuesday February 04 2003, @07:39AM (#5221968) Journal
    Most definitely: It is good to not have a monopoly controlling a market.
    • by rseuhs (322520) on Tuesday February 04 2003, @07:50AM (#5222018)
      Definitely good news.

      Here's my scenario:

      First, MS Office revenues will be hit and hit hard. OpenOffice does almost anything MS Office can do and it is not more difficult to upgrade from Office97 to OpenOffice than it is to upgrade to OfficeXP. - But a lot cheaper.

      Only after an organization has successfully converted to OpenOffice, we will see full conversion to Linux.

      Now we'll all have to see what Microsoft does without the hefty MS Office sales... Maybe XBox-gamers will have to pay a lot more because Microsoft can no longer afford losing millions over millions on it?

        • by rseuhs (322520) on Tuesday February 04 2003, @08:13AM (#5222118)
          What advantages has Windows over Linux?

          • Runs (nearly) all desktopsoftware, because they have 95% marketshare.
          • Support people are easy to find, because they have 95% marketshare.
          • If you hire new people they are already familiar with it, because it is so widespread.
          • All consumer hardware supports it, because it has 95% marketshare
          • OEMs preinstall Windows because it is so widespread.
          All advantages of Windows vs. Linux are a result of it's domination. If you take that away, Windows is dead. The OSS comunity can write most drivers for thousands of different devices and architectures. - Microsoft can't even support Alpha without hand-holding from Compaq, never mind write all the drivers for all those devices!

          No. There will not be a lasting coexistance between Windows and something else. Windows will die within a few years once it no longer runs on the majority of desktops.

          The pressure on Microsoft is getting bigger. Every year PCs become cheaper and the Microsoft tax represents a bigger and bigger share of OEMs revenues. They have just raised the cost for their corporate customers.

          The question is, where shall all the revenue come from? Nobody really needs any MS Office version newer than Office97 and nobody is really excited about Longhorn or however it will be called.

          Microsoft knows that they are doomed (that's why Bill Gates and all the other executives with a clue sell thousands of shares each month) and that it's right now just a matter of how much they can milk out of their customerbase.

          • by Lev13than (581686) on Tuesday February 04 2003, @08:36AM (#5222224) Homepage
            Microsoft knows that they are doomed (that's why Bill Gates and all the other executives with a clue sell thousands of shares each month) and that it's right now just a matter of how much they can milk out of their customerbase.

            Ummm... Gates sells "thousands" (he actually sells about a million [yahoo.com]) of shares every month because 1) He's got 600 million of them gathering dust, 2) MSFT didn't start paying dividends until recently (even at $0.16/share that's only $96mm per year), and 3) the guy needs to live. Can you get by on a mere $96 million per year? I didn't think so.

            Gates sells a fixed amount of shares every month - he always has and likely always will. One major reason is so that people can't draw weird conclusions from his personal stock sales.
          • by MtViewGuy (197597) on Tuesday February 04 2003, @08:54AM (#5222342)
            ...It may just kill off a lot of the incentive for people to switch to Linux.

            What would happen if Microsoft suddenly cuts the pricing of a legal copy of Windows XP desktop editions by 50% or more for everyone? Because Windows is vastly better-supported in terms of hardware support than Linux, sales would definitely increase quite a bit.

            Yes, Linux is cheap when you get the personal edition distributions, but when you have to spend time to tweak it to support the latest hardware, plus the fact a lot of the latest hardware lack Linux drivers, the result is a potentially frustrating experience for non-experienced users. I think a lot of people don't realize that many of the posters on /. are pretty experienced computer users, people who are willing to spend the time to carefully tweak Linux to their own satisfaction and spend the time to chase down proper Linux hardware drivers.
            • by gadget junkie (618542) <gbponz@libero.it> on Tuesday February 04 2003, @09:03AM (#5222410) Journal
              I don't agree with that. since most of the OS sales are pre-loads by OEM's, the final customer wouldn't see a great benefit, since hardware prices are going down anyway and 50 or 60 bucks don't mean much. In fact, that's part of the problem that drives MS to a annual fee model: people are not upgrading like they used to.

              Moreover, an upgrade cycle is drive by applications, and what's the added value of Office XP against office 97?

            • by octothorpe (34673) <etwilsonNO@SPAMgmail.com> on Tuesday February 04 2003, @09:39AM (#5222621) Homepage
              That driver argument is starting to really annoy me. I've almost never installed any version of MS-Windows where I didn't have to install separate drivers from the manufacturers website: Video drivers, sound drivers, motherboard drivers, AGP drivers, network drivers, printer drivers, scsi drivers etc. On the other hand, I've seldom had to download anything for Redhat, all the drivers I've needed are included in the distribution. And considering that my fiance just had to buy a brand new scanner to replace her three year-old one because the manufacturer said that they were not going to support Windows XP, I'm just now sure how you can say that XP supports more hardware than Linux.
                • But still, look at all the hardware manufacturer sites; just about all of them have necessary drivers for Windows Me, Windows 2000 and Windows XP.

                  Something to notice is that just about all of them need drivers for ME, 2000 and XP -- you need different drivers for every version of windows (OK, a bit of an exaggeration -- but only a bit!).

                  I don't remember having to hunt down a Linux driver for something since RH5.2. Windows, on the other hand....

          • by Afty0r (263037) on Tuesday February 04 2003, @09:07AM (#5222427) Homepage
            What advantages has Windows over Linux?

            Simpler setup with very few questions.
            Smaller more focused set of default applications
            Simpler, centralised, graphical configuration tools
            Convenient, standardised help system with excellent searching and troubleshooting options
            In built support, from time of consumer device launch, for peripherals and card types (PCMCIA, USB etc. - Linux got late to market here).
            Advanced tools are hidden from basic users.
            System files are protected from inadvertent change.
            System rescue tools provided on disk (while Linux may die less frequently, when it does there's NO WAY for Joe User to recover).
            No confusing messages on startup.

            Linux has MANY advantages over Windows and is a technological marvel in some ways, but the sooner people realise Windows *is* better in some departments, the sooner Linux will start to catch up in those ways.
  • And lose its insane profit margin?!

    Tragic.
  • They're up to something. I reckon he's finally managed to license English (tm) and this is a cruel prank on the OSS community.

    - Oisin
  • Success! (Score:3, Insightful)

    by gazbo (517111) on Tuesday February 04 2003, @07:41AM (#5221983)
    It's about time we had this news. Really, OSS has no chance of competing with software backed by a large company, at least not when the price of the proprietary software are not unreasonable.

    By forcing Microsoft to release polished and well documented code at a reasonable price, OSS has pretty much achieved its goal.

  • by MosesJones (55544) on Tuesday February 04 2003, @07:42AM (#5221987) Homepage

    Before the muppets start talking about products can't compete with free, remember support costs, staff costs etc etc.

    One element on margin is that it is estimated that Microsoft work around the 30% mark, while IBM work around 7% and are booking multi-millions in association with Linux. So this means that Microsoft will be reducing their margin, not becoming unprofitable.
    • by Gadzinka (256729) <rrw@hell.pl> on Tuesday February 04 2003, @08:32AM (#5222199) Journal
      I always wonder about this nonsense talk about product's price being only part of the TCO.

      I agree that price of the box with OS/DB/whatever is only part of the equation, but since when MS/Oracle/whoever started to give away product support for free?

      I mean, whatever software you are using, it usually requires some helpdesk/administration. And support that you've got in the price of the software package is good for nothing.

      I know because I tried to get several times support for NT, MSSQL etc. About the only advice is to reinstall system, database, or (sic!) decrease the size of database.

      And paid support for Oracle or MS SQL... Don't get me started. Prices of that software even in the highest version with unlimited users, processors etc are nothing compared to costs of those support contracts.

      Robert
      • by ergo98 (9391) on Tuesday February 04 2003, @09:33AM (#5222587) Homepage Journal
        Microsoft has only two profitable products (Office and Windows) that strongly depend on each other.

        I adore how cute it is when some FUD is propagated on Slashdot, and soon you can hear it being repeated verbatim as stone-cold facts time after time by Slashbots. Microsoft has three profitable divisions: Client, Server Platform, and Information Worker. I'm hardly surprized that some dullards interpreted that as "Office and Windowz!", yet in reality those three divisions account for the overwhelming majority of products with the Microsoft name on it. SQL Server? Yup. Visual Studio? Yup. Visio? Yup. SNA Server? Yup. Indeed, if you looked within even the unprofitable divisions you would find a bevy of highly profitable items: The Home and Entertainment Divison encapsulates Microsoft hardware, such as mice and keyboards, which themselves are highly lauded and tremendously profitable, however their profitability is being masked by the xbox.

        This is all so laughable anyways, and indicates the core naevity of most open sourcers. Egads Microsoft mentioned open source! The reality, of course, is that such filings must include forward looking risks of any sort, including potential lawsuits, and envisioned risks by the pundit community. The fact that open source is mentioned in there is a given. To make this even more hilarious, though, the prior [nasdaq.com] quarterly report included the same risk statement, while the quarterly report before that included the statement "the availability of competitive products or services such as the Linux operating system at prices below Microsoft's prices or for no charge" as a risk factor. Looking at the annual report from 3 years ago [nasdaq.com] yields the statement "With an increased attention toward open-source software, the Linux operating system has gained increasing acceptance. Several computer manufacturers preinstall Linux on PC Servers and many leading software developers have written applications that run on Linux. Microsoft Windows operating systems are also threatened by alternative platforms such as those based on Internet browsing software and Java technology promoted by AOL and Sun Microsystems. " and " The Company continues to face movements from PC-based applications to server-based applications or Web-based application hosting services, from proprietary software to open source software, and from PCs to Internet-based devices.". I'm sure I could go back two more years and find similar forward looking risk statements.

        I suspect that someone read an SEC filing for the first time in their life and thought they found a real revelation (as did the Slashdot editors when they posted this), when it's the same thing that has appeared in their filings for years now.
        • by twitter (104583) on Tuesday February 04 2003, @11:13AM (#5223203) Homepage Journal
          When a reader says that Office and Windoze prop M$ up, you say:

          I adore how cute it is when some FUD is propagated on Slashdot, and soon you can hear it being repeated verbatim as stone-cold facts time after time by Slashbots.

          and then go on to chatter about keyboards and Visual studio. Can you reasonably compare the proffit bassed on M$'s O$ to keyboard sales? The price of VB may pain individuals who cling to M$, but that individual pain does not collectivly match the vast revenues had when big dumb corporations stick Office on every one of their 7,000 peons desks. No, it's true that M$ is using it's O$ monopoly rent to get into other areas.

          The fact is that there is nothing new here but failure. M$ gets into each new market the same way, by dumping . The used IBM to make an O$ monopoly then dumped Windoze 3.1 to establish a desktop hegemity. They then used anti-competitive agreements with vendors to keep other O$ out and dumped their office to make familiarity. To this day M$ dumps their software on schools, then turns around and screws them in quater million dollar BSA raids. Their reduction of prices of their vastly inferior "server" software is par for the course but it will not be enough this time.

          People are realizing that free makes economic sense. They are starting to see that free software is better software and always will be. Better software does make for a lower total cost of ownership as it eliminates the intentional waste propriatory software vendors are famous for. More importantly, it does what YOU want it to do rather than what some marketdroid thinks it should do and it does it according to best practices. Slammer, Code Red, Nmedia, SirCam, I love you, Klez, la te da te da, the list goes on and on because the closed source, rape the user method does not work for anyone but the vendor.

        • by Jason Earl (1894) on Tuesday February 04 2003, @12:11PM (#5223810) Homepage

          Yes, and I am sure that they make money off the gumball machine out in their front lobby too. That doesn't mean that the proceeds from said gumball machine have any great effect on Microsoft's bottom line. Last quarter Microsoft generated an operating income of $1.97 billion on revenues of $2.44 billion. MS Office had similarly ridiculous profit margins with an operating income of $1.88 billion on revenue of $2.41 billion. There are plenty of companies with those kinds of revenues, but only Microsoft has the combination of high revenues and ridiculously high profit margins. Even Microsoft's server software margins are only about half of the Windows and Office profit margins. I can guarantee you that, compared to Windows and Office, the profits on keyboards and mice are insignificant. What's more, there is no possible way that Microsoft could ever be even a tenth as profitable selling hardware.

          Thanks to Windows and Office Microsoft is the software powerhouse, without the huge profit margins from these two products they probably wouldn't even be competitive.

  • by Anonymous Coward on Tuesday February 04 2003, @07:45AM (#5221999)
    PR... nothing more than PR...

    It's not that they're wholly unaffected by the advance of Linux, but this statement should be bundled with others they use to show that "We have brutal competition... really!"
    • by Iamnotalawyer (452226) on Tuesday February 04 2003, @08:16AM (#5222137)
      You couldn't be closer to the truth. This kind of public statement is surely to be referred to in defence at some future MS anti-competition trial. MS may even point to an unrelated drop in prices (such as the end in lifetime of a version prior to the release of a new one) as a sign of competing market forces at work. Points scored here by MS's counsel and PR team for being proactive in their strategy and points should be deducted from the press for actually printing this blatant spindoctoring.
    • by MacAndrew (463832) on Tuesday February 04 2003, @08:55AM (#5222352) Homepage
      Hey, their need for token competition may be the only reason Apple has survived. If they'd yanked Office for Mac, the Mac would have been in serious trouble. Scary that a suite of generic applications can have so much influence.

      Apple may be on its own legs securely now, as may Linux. It will be interesting when Microsoft has apples-to-apples competition, but because of Microsoft's efforts to shove everyone else off the store shelf it will be years before they can no longer manipulate "the competition."

      If Microsoft is smart -- how many sentences start with those words? -- it will begin to adapt, but also wring every last dime out of the legacy products. `They haven't done well in their efforts to dominate new markets where they don't benefit from the Windows foundation, such as the internet and little game boxes. Gates, despite his claims, has no vision.
  • by Anonymous Coward on Tuesday February 04 2003, @07:45AM (#5222000)
    It was about time.

    The thing that pushes ppl to Linux and Open Source is the price. Depending if MS lower its prices too much, it may cause a lot of ppl not to consider OSS software at all.

    Who would want use and a disgruntled OS if they may get nice box, nice gradient buttons, stylish consistent GUI for a reasonable price?

    Maybe it forces OSS software to evolve from merely copying proprietary functionalities to actually improve users' life in order to make a differentiation. A reason for ppl to use it. For now, it's price.
    • by Xpilot (117961) on Tuesday February 04 2003, @08:05AM (#5222084) Homepage
      stylish consistent GUI for a reasonable price?

      Stylish? Stylish? You mean the big, colorful plastic looking WinXP buttons? You call that stylish? To quote a reviewer on the web (I forget where from):

      The Windows XP interface looks like some kid ate a box of crayons and threw up on the screen.

      Is it stylish because Microsoft made it?
    • by YeeHaW_Jelte (451855) on Tuesday February 04 2003, @08:31AM (#5222193) Homepage
      I couldn't care less about the price, and I think the majority of OSS users isn't motivated by the low price. Hell, I can get windows for free just as well, just talk to my l33t h4ck0r neighbour kid and ask him to burn me a copy. The price argument is old & tired: get off it!

      Even companies don't or shouldn't use OSS for it's price; dozens of researches have shown that the TCO (total cost of ownership) for windows and e.g. linux don't differ that much. They should use, as should individuals, OSS because they believe in the OSS philosophy and because the OSS style fits their own style of computer usage.

      For me, it's about these things:
      - From kernel to application, I can see exactly what it's doing and why
      - If it doesn't work the way I like it, I can change it or try to find someone who already has
      - I'm not a newbie, I know computers and I don't want to be treated as such
      - If the configuration changes, I want to be the one who does it, not the OS itself

      All these things add up to a package microsoft can't compete with, even if it would cost me more, not less that propriety software. And I wish everyone would stop hoping every last computer user starts using OSS, because it's just not going to happen, and it's just not necessary. Some people want ease-of-use, and others want power. Just so.
      • by AftanGustur (7715) on Tuesday February 04 2003, @09:54AM (#5222725) Homepage


        Even companies don't or shouldn't use OSS for it's price; dozens of researches have shown that the TCO (total cost of ownership) for windows and e.g. linux don't differ that much. They should use, as should individuals, OSS because they believe in the OSS philosophy and because the OSS style fits their own style of computer usage.

        After the XP license extortion, companies should begin to realise that they have been had..

        Companies paid tens if not hundreds of thousands of dollars in license fees to Microsoft and their gangs of henchmen (resellers) just to "extend" their software contracts.

        The company where I work paid about 230,000 Euros for the contract "Extension". And what did the company get in return ? Some upgrade called "XP" ??
        The tough question is, how is management going to justify this expensive payment if the company doesn't use this thing called XP ??

        And surely we installed XP. And what did it cost us ?? About 6-8-man years in preparation, testing and roll-out. And what did we get that we didn't have already in NT4 ?? Nothing !!

        Being in charge of your upgrade cycle is priceless..

        Hmmm, priceless...

        1 copy of Linux = 20$
        external consulting and training = 30,000$
        The feeling you get when the year report comes out that shows you saved the company hundreds of thousands in licensing fees .... Priceless..

  • by signe (64498) on Tuesday February 04 2003, @07:47AM (#5222007) Homepage
    Microsoft has to put everything they could possibly think of that might conceivably cause the stock to go down even slightly in there, otherwise they could be held liable by their stockholders.

    So while it's certainly nice that they finally have to publically announce this as a possibility, it really doesn't mean anything. I've seen some wild things in quarterly and annual reports.

    -Todd
  • by EvilDrew (523879) on Tuesday February 04 2003, @07:48AM (#5222010) Homepage
    So this is why the Microsoft Home Of The Future has no bathroom. They can't afford it anymore. Sweet.
  • by Koos Baster (625091) <`ln.lla4sx' `ta' `sretsubtsohg'> on Tuesday February 04 2003, @07:51AM (#5222023)
    This is a fairly major revelation from Microsoft, and if it happens, it may be one of the biggest wins yet for open-source software: what do you know -- competition works!"

    Sigh. Since when was lowering Microsoft's prices a major objective of OSS?

    This is *not* a big win. Contrary: it reduces the perceived difference between OSS and MS from a consumer's perspective and may even force Linux vendors to lower their prices and thus reduce their revenues.

    ...Now if Microsoft interpreted the OSS threat the way they should and decided to counter it by open sourcing their stuff... THAT would be a major win for the OSS (by definition)!
  • by kahei (466208) on Tuesday February 04 2003, @07:53AM (#5222028) Homepage
    This is really quite analogous with what happned when MS's cheaper solutions began to eat the Unix market from the workstation up.

    At first, MS's main advantage was price, but gradually they innovated(*) and re-engineered so that their product was always high enough quality to attack the next layer up -- from word processing platform up through file/print server to heavy-duty servers and workstations.

    Now MS are being eaten from below by a new generation of even cheaper systems. Like early MS systems, these open source offerings are both derivative and weak except for their price advantage. However, a price advantage is enough to secure a foothold, and over time open source systems will be strengthened and will begin to innovate and will be able to take over better and better MS-held markets.

    In about 10-15 years, the cycle will probably start again, taking us another step further from the days of monolithic systems and proprietry hardware/os/support lock-in (which is where we were at before the Attack of the Killer Micros, young'uns). It's all good.

    (*)Rather than freaking out and writing posts about 'M$' and so on, why not go outside and get some fresh air?
        • by swillden (191260) <shawn-ds@willden.org> on Tuesday February 04 2003, @10:58AM (#5223103) Homepage Journal

          Unless I'm mistaken, VB was the first programming tool which allowed programmers to build applications with a click and drag GUI interface.

          You're *very* mistaken. The first incarnation of graphical interface builders was probably at Xerox PARC in the late 70s. I say "probably" because there may have been an earlier one that I don't know about. Through the 80s there were at least two different competing Smalltalk development toolsets, each with a graphical UI app tools.

          I personally worked with a half-dozen different tools that pre-dated VB. One of the best (*still* one of the best, over a decade later) was the NeXTstep UI Builder. Fantastic tool. Even back in the days of DOS applications, prior to Windows, I used a number of click-n-drag UI tools to build both text and graphics mode interfaces. I would imagine there were some early tools for the Mac as well, although I didn't use them.

          In the research world, there have been a number of attempts to build *purely* graphical programming environments, in which you never typed any code whatsoever. The earliest of these that I'm familiar with was completed in the mid-80s (unfortunately I forget the name -- can anyone help)?

          So, no, MS did not invent click-n-drag app development. I'm sure that somewhere along the way MS must have invented *something*, but I can't think what it might be.

  • by Uninvited Guest (237316) on Tuesday February 04 2003, @07:57AM (#5222045)
    I suppose the continuing sluggish growth in the US economy has nothing at all to do with it either. Isn't this the same sort of argument that the RIAA used to explain the drop in CD sales? "The competition from free sources is reducing our sales!" In fact, slow growth in the economy impacts all kinds of sales, including Microsoft's products.
  • by cluge (114877) on Tuesday February 04 2003, @07:59AM (#5222055) Homepage
    A translation for those not fiscally inclined.

    *large puffs of smoke appear, and a talking face begs you*

    "Gosh darn it! Open Source is digging into our revenue. Lord knows that Open Source will be the down fall of all things good, look whats happening to our profits! **Ignore present world wide economic conditions they have no bearing here** I mean, we weren't really price gouging before, we were just looking out for our stock holders. Now our profits are going to go down because we have to lower our already, really, really, really fair prices or else we won't keep market share. It's unfair competition! **Ignore present world wide economic conditions they have no bearing here**"

    ***second translation***
    "G*d d*mn this sucks, we have to compete now, we just can't buy Linus out. So much for our past competitive strategy"

  • Servers? (Score:5, Insightful)

    by Mr_Silver (213637) on Tuesday February 04 2003, @08:07AM (#5222089)
    Given that I've seen Linux make inroads into Microsoft's server market it wouldn't surprise me that, if they do reduce their prices, it's only for the "server editions" of things.

    Despite all the comments on here about Slashdot readers, their Mum, Dad, Grandmother, Aunt, Uncle and kids using Linux on the desktop - I don't think the desktop users are making any significant decreases to sales of Windows XP just yet.

    A year down the line though, who knows ...?

  • by PinglePongle (8734) on Tuesday February 04 2003, @08:09AM (#5222102) Homepage
    I don't think OSS is making a big dent in MS revenues - it's still virtually impossible to buy a new PC without windows pre-installed (and pre-licensed).

    Instead, I think MS is suffering from a lack of innovation. There is simply no compelling reason for corporates to upgrade their software anymore - Windows 2K is fine for business use, they don't get anything in XP other than support problems. You might upgrade Office to be able to read other people's files, but there are precious few "must-have" features to differentiate the current offering from Office 97.

    The most significant reason for users to upgrade in the recent past has been MS's change in licensing policy - signing up before the deadline gives "free" access to upgrades for a limited period. I know that many corporates bitterly resented this pressure. However, the next version of "Windows for Servers" keeps getting pushed back, and many corporates are only now upgrading their servers from NT4 to W2K - not to take advantage of new features, but because support is being withdrawn.

    So, while OSS is undoubtedly snapping at MS's heels, providing a much-needed alternative and nibbling away at the revenues, the bigger problem is that historically, Microsoft have taken ideas developed elsewhere and "embraced and extended" them. Right now, there are precious few radically new ideas to embrace, and the only way for MS to continue to grow their revenue is to find new must-have features. In short, they need to innovate under their own power.

    Welcome to the real world, Bill....

  • by clickety6 (141178) on Tuesday February 04 2003, @08:19AM (#5222142)
    and so they no longer need to act like one!

    Or am I just getting cynical in my old age?

  • by new death barbie (240326) on Tuesday February 04 2003, @08:19AM (#5222145)

    Now every Microsoft shareholder has become the enemy of OSS

    Now Wall Street analysts will be announcing to the world that Microsoft profits will be impacted by OSS --

    And if Microsoft is 'hurting', who else in this sensitive economy could be feeling the pinch from the free software terrorists?

  • by hype7 (239530) <emptyskiesNO@SPAMmac.com> on Tuesday February 04 2003, @08:20AM (#5222146) Journal
    You gotta be kidding me! This reminds me of the old joke... a US Navy Carrier sees a big blip on the radar, and sends out of the radio:
    "This is the USS Big Ship to unidentified target, please change course." The response comes back:
    "That's a negative, Big Ship".
    "We are a Aircraft Carrier from the US Navy. Now please change course!"
    "That's a negative, Big Ship. We're a lighthouse"

    For chrissakes, OSS has got to be the biggest stack of rocks sitting on MS's radar that they've had in a long, long time.

    -- james
  • by gorjusborg (603799) on Tuesday February 04 2003, @08:35AM (#5222221) Journal
    I am unsure that this is a good thing. I think you all should be a little skeptical too.

    Why does anyone want to see Microsoft go down the tubes?

    Sure, they have been overcharging us for their OS and office software for years, but it isn't like the money didn't go to good use. After all, most of the features that we see in OpenOffice and other useful apps for Linux came from ideas that were original or at least perfected (I use the term loosely here) in MS apps.

    Sure, I love the GNU project, Linux, and OSS in general, but would we even have a target to hit with our free software if we didn't have a company like Microsoft to chase after?

    I hate to see the mob mentality take over with this 'Linux vs. Windows' stuff rather than contemplate what a collapse of Microsoft would really mean to us (as developers, users, etc.)

  • by dinotrac (18304) on Tuesday February 04 2003, @08:37AM (#5222236) Journal
    Sure, OSS is a competitive force to reckon with, but the big problem for MS was a little further down in the story:


    Microsoft also alienated many of its largest customers with its controversial new Licensing 6 and Software Assurance program, which took effect last year.


    Businesses are willing to pay for value delivered. They are not, however, willing to be raked over the coals, especially by someone who is making the profit margins that Microsoft makes in an economy that has everyone else scrambling to make a buck.

    Add in the costs of continual upgrades -- required by Software Assurance, BTW -- and the hardware to support them, and the lost productivity due to bugs and security flaws, and we have some unhappy campers out there.

    OSS alternatives mean that Microsoft will have to lower prices, probably to a level lower than pre Software Assurance days. Customer anger and memories mean that it may not be enough to keep some of those customers from going away for good.
  • by miffo.swe (547642) <daniel@nOSPAm.solle.se> on Tuesday February 04 2003, @08:59AM (#5222374) Homepage Journal
    Altough it is nice and warming to see that MS may have to lower their insane prices i dont feel that happy. If this is true then Linux is really in the line of fire from Redmond. The ones who have proven time and time again that nothing is too evil or shoddy if it helps remove competition.

    I think we linux users should brace for an attack like nothing before from MS. They will use any meens avaliable to sustain their high revenues. A slight fall of the revenues and MS stocks will likely fall like a ton of brick. Considering how much stocks is owned by staff in all levels i presume there is an enormous internal incentive to thwart linux in its cradle.

    We should have a central site documenting every shoddy move and backdoor mudshot contest from Redmond HQ. I assume that would be some horrific reading on a site like that pretty soon now.
  • by flacco (324089) on Tuesday February 04 2003, @11:29AM (#5223350)
    OSS does NOT "compete" with MS in the traditional, economic sense - it rewrites the rules completely. Classic economic competition does NOT work against Microsoft. In that arena, they have several key markets totally sewn up, and competition simply does not exist because of their dominance.

    OSS is only making inroads because it plays outside the rules. There is no profit center, there is no company organization, there is no ownership...

    It's unhelpful to give credence to the fallacy that Microsoft has "competition".

    • Re:Prices??? (Score:5, Insightful)

      by Madcelt (574333) on Tuesday February 04 2003, @08:01AM (#5222061) Homepage Journal
      It doesn't have to be free to compete with free. It has to be percieved as better value, that is entirely different.
      • Re:Prices??? (Score:5, Informative)

        by AsbestosRush (111196) on Tuesday February 04 2003, @08:39AM (#5222259) Homepage Journal
        Pricing for tech support depends on the product.

        IIRC (I used to work for MS tech support. Don't flame me) rates are as follows:

        Office gets 2 free application support incidents, with each incident thereafter costing $35, with no timed charges. Installation support is always free.

        Most of the home products (Works, the games, etc) only get free support for installation. $35 for each incident for anything else. Even if it's a 30 second "Sorry, your data's hosed.".

        Now here's where it gets tricky... Professional support for stuff like "I have this massive spread sheet in XL that isn't working, but all of my 900 lines of macro code appear to be right", "Access forms aren't working like I think they should", or "Exchange is acting funny" start at $245 per incident.

        An incident is defined as follows:


        An assisted support incident is defined as a single support issue and the reasonable effort needed to resolve it. A single support issue is a problem that cannot be broken down into subordinate problems. If a problem consists of subordinate problems, each shall be considered a separate incident.

        Before Microsoft provides support for an assisted submission, the customer and Microsoft's designated Support Professional must agree on what the problem is and the parameters for an acceptable solution.

        An assisted support incident may require multiple phone calls and off-line research to resolve it. Support Professionals are responsible for determining what a single support issue is and communicating this to customers.


        I could be wrong tho. It has been over 6 months since I left tech support hell to do something else for a while. I worked my way out of support twice before, just to get shafted by the company that I was working for, so I'm kind of shying away from the IT industry.

    • Re:great (Score:5, Insightful)

      by rseuhs (322520) on Tuesday February 04 2003, @08:23AM (#5222161)
      Isn't that exactly what they do in Peru and India?

      Also, Microsoft spent 5 to 50 million $ on campaigning (you know gala-dinners, nice flights for politicians, etc.) to stop the German Bundestag from migrating to Linux. article here (in German) [heise.de]

      And the Bundestag still migrated the servers to Linux...

      With over 5Million$ in expenses and 5000 desktops the Bundestag runs, Microsoft has paid at least 1000$/desktop in campaigning. Not even the dumbest Micorosft troll can claim they have made a profit on that...

      • Re:That's good (Score:5, Insightful)

        by EvilTwinSkippy (112490) <yoda AT etoyoc DOT com> on Tuesday February 04 2003, @08:48AM (#5222309) Homepage Journal
        Well I tested software for a living in a previous job, and let me tell ya, Windows has a piss poor track record. Our department was so sick of NT blue screening (and taking all the debugging information with it) that we ported the application to Linux. We were never really able to tell what was breaking NT.

        Now I will grant you, XP does not blue screen nearly as often. However, if I had a nickel for every time I got one of those "Dude your program blew up and we would like to send the report to M$" dialog boxes I would be rich. My wife has made a rather lucrative career in on-site tech support, and her best customers run XP. It may not crash, but it doesn't really work either. (I still have equipment that worked perfectly well under 98 that we still don't have the drivers working properly for under XP on the same hardware.)

        Now I do use linux on a day to day basis. It does crash a lot. Well, actually, the applications crash a lot. The operating system has locked up on me about 8 times in the last year, and that is over 12 Kiosks, 9 data center servers, and 10 or so desktops, all running experimental software.

        And can you tell me the last time you managed to get a current version of Windows to run on a 3 year old computer?

    • by g4dget (579145) on Tuesday February 04 2003, @09:13AM (#5222452)
      The fact is, Microsoft could probably still make some changes internally that would allow them to profit off of Windows if it sold for almost nothing, and THEN what would open source have to bank on? Moral righteousness? HAH. That'll sell.

      Most people already pay for Windows for each of their machines, whether they want to or not. I certainly have a Windows license for each of the dozen PCs that I have, and only one of them actually runs Windows.

      So, your notion that people use open source because they have to pay for Windows flies in the face of reality. People use open source software because it simply works better for them.

      Depressing for Microsoft, isn't it, that people throw Windows away even though it is pre-installed and they have actually been forced to pay for it and wouldn't incur any additional costs by just using it.

    • ---1) Go read a history of UNIX / M.I.T / Stephen Levy's "Hackers" book. Then you'll understand people were giving away software long before they had any ideas before making money out of it. Selling software is a newer idea...

      What you talk about is the original Unix Way. If every program is a simple single minded program, and somebodt else would like to borrow a snippet of code, why not? And no, selling software is NOT a new idea. It's just another way to pay the programmers on code. And of course, if they open that code up, why buy their product (enter vicious circle)

      ---2) OSS/FSF/GPL exist purely to protect the rights of those who *choose* to distribute software freely to continue to do that, to allow them (and anyone else) the ability to use and modify that software and to ensure that nothing is hidden behind proprietary standards.

      I think you misunderstand standards documents. Standards can be wrote in plain language that describe how something happens. Code is just an implementation of that standard.

      ---3) Microsoft *sell* software. They are not innovaters, just damn good at repackaging the ideas of others and marketing it - or just buying the company that innovated it in the first place. They can, and have, used Open Source software ideas in their own products but, then, that's what it's designed for. (Yes, when you Windows people venture to the command line on your Windows boxes, whenever you "ping" something, you're using software that originated from the dirty, disgusting free software movement.)

      Oh fun. Yet another "I hate MS" person. Get this straight. They are a business. They are in the software business to make money. They arent in there to evangelize, bemoan, or any other religious war that MANY linux users get suckered into. Even the FreeBSD people are worse in that regard. Does "My shit does not smell" make sense to you?

      ---4) OSS does not give a damn about Microsoft "competition". OSS/Linux/FreeBSD users, who probably have experience with Windows, might hate Microsoft (yes, I'm one of them) because of their business methods, rubbish software or simply because it's "cool". But OSS was there long before Microsoft as a defence against predatory practices from UNIX vendors and will be there long after.

      There's plenty of reasons why you would use Linux, rather than Microsoft stuff that would not be "I hate MS" topic.

      First, Linux on the servers makes sense because MS has a bad tendancy to break stuff/leave servers unpatched.

      Secondly, Linux is coming up to common recognition. I'm just riding the wave so I'll have an edge on the new Linux users.

      Third, I cant afford a Legit copy of MS programming suite, so I use GCC. That pisses me off more than anything, cause I remember the days where MS gave away compiliers (Quick Basic) so you could do basic programming stuff. Now, you have to fork over 300$ to get a copy. With Linux, GCC is free, along with all the libs, and additional compilers. And I get multiple CPU compiles ;-) The compiler is probably the biggest reason for me to 'switch'. If I could develop Windows stuff (and see basic windows programming like seeing the source for notepad and calc), I'd probably wouldnt have went to Linux.

      ---5) Microsoft reducing the cost of their products / turning Windows into an operating system / sticking Gates' head on a pole outside 1 Microsoft Way might slow down the migration from Windows to OSS but it probably won't do anything whatsoever to those already using / developing OSS software.

      What? So you wanna stick Gates' head to a pole which will speed up Open source?

      --6) Microsoft cannot buy OSS because there's nothing tangible to own, they can't stamp on OSS because it's too widespread, they can just continue to spread FUD as they've always done. End of OSS lesson...

      !THUMP! What was that? Oh, just the dead horse getting beat.