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Microsoft Linux Business

Details of Linux-in-Munich Deal Revealed 685

Posted by michael from the craaaaaaazy-prices dept.
An anonymous reader writes "USA Today is running a piece about the lengths which Microsoft went to in order not to lose the government of Munich's account to a Linux-based proposal from SuSE. Interesting to see how these types of contracts are structured, and just what Microsoft is willing to give up to prevent losing to Linux."
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Details of Linux-in-Munich Deal Revealed More

Details of Linux-in-Munich Deal Revealed

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  • from the guys who hit bill in the face with a pie (Score:5, Funny)

    by gfody ( 514448 ) * on Tuesday July 15, 2003 @05:26PM (#6446874)
    goes to show how much they hate microsoft in germany

  • understatement (Score:5, Funny)

    by cruppel ( 603595 ) * on Tuesday July 15, 2003 @05:27PM (#6446889) Homepage
    David Burger says "...I find it ironic that Microsoft could actually be trying to be seen as if it were being dealt with unfairly."

    weird so do I

    • Treating Microsoft fairly... (Score:4, Funny)

      by jkrise ( 535370 ) on Wednesday July 16, 2003 @02:50AM (#6450515) Journal
      Most people (Judge Jackson included) get emotional and condemn Microsoft summarily, without giving them credit where due. Here's a little guide, how to treat MS fairly:

      1. When throwing an egg, ensure it's a golden egg.
      2. Don't say Windoze sucks. Be specific. Say "Windows 95 is fast, but doesn't have USB. Win98 sucks bad, no security. WinNT4 is actually good - no wonder you withdrew support. Win2K supports USB, but breaks a lot of code. Win2K also gives us useless DRM. WinXP Home sucks, and doen't include networking. WinXP PRo sucks bigtime - lots of Spyware, builtin lousy fiewall, builtin DRM enabled CD writing s/w etc..........."
      3. Don't say ".Net is complex" Say instead " Please explain .Net, and tell us why your losy mktg team removed the .Net brand from seeral products."

      and so on... Be fair to them - they spend $5bn every year for R&D, generate lots of Linux jobs,make more people hate the US by their attitude and behavior, etc. Praise them for all this.

      Peace.
      -

  • quality and value (Score:5, Insightful)

    by Transient0 ( 175617 ) on Tuesday July 15, 2003 @05:28PM (#6446894) Homepage
    It is really impressive to see that Munich went with Linux even though the price tag was higher than Microsoft's. The affordability of Linux is a definite plus, but too often Linux is played up in the media as being the "less expensive alternative to windows". I think that this downplays the other great advantages of Linux. Glad to see that Munich appreciates a great product when they see one.

    • Linux competitiveness. (Score:5, Insightful)

      by markv242 ( 622209 ) on Tuesday July 15, 2003 @05:33PM (#6446947)
      This piece out of the parent bears repeating:

      ...Munich went with Linux even though the price tag was higher than Microsoft's.
      That is a huge win for Linux, far bigger than anyone here realizes. I don't think you can underestimate the significance of a massive IT user saying "we're willing to (initially) spend more for Linux". Powerful stuff.
      • (prices for linux distros across the world)
        RISE UP!

      • Re:Linux competitiveness. (Score:5, Interesting)

        by FFFish ( 7567 ) on Tuesday July 15, 2003 @06:00PM (#6447224) Homepage
        To put the final nail in the coffin, SuSE/IBM ought to bring the project in under the accepted bid price. That would wake up a LOT of PHBs.

      • Re:Linux competitiveness. (Score:5, Insightful)

        by jafac ( 1449 ) on Tuesday July 15, 2003 @06:55PM (#6447734) Homepage
        Exactly!

        The insistence that "Linux is cheaper if your time is worthless" is ONLY true if you're talking about near-term costs.

        But consider LONG TERM costs. Like 5-10 years later, when you've got to sustain a system, and forced upgrades from the vendor or backwards compatability issues screw you over. With Open Source, and a team of competent maintainers, it is theoretically possible to maintain a system based on commodity hardware indefinately. But with Proprietary Closed Source software, you will be forced into the perpetual upgrade cycle, and be dooming yourself to buying an entirely new system every 5-10 years, as the old one is no longer possible with the new mix - often because some marketroid made the decision that "that way (OLE) of doing things is obsolete, now you must do it THIS way (ActiveX)" only to be followed up in another two years with: "that way (ActiveX) of doing things is obsolete, now you must do it THIS way (DNA)" only to be followed up in another two years with: "that way (DNA) of doing things is obsolete, now you must do it THIS way (COM)" only to be followed up in another two years with: "that way (COM) of doing things is obsolete, now you must do it THIS way (DCOM)" only to be followed up in another two years with: "that way (DCOM) of doing things is obsolete, now you must do it THIS way (.NET)" only to be followed up in another two years with: "that way (.NET) of doing things is obsolete, now you must do it THIS way ()" only to be followed up in another two years with:
        • "Linux is cheaper if your time is worthless"

          Windows is only $100 if your time is worthless. (Otherwise it's much, much, much more.)
        • "Linux is cheaper if your time is worthless"

          Exactly. If I may suggest a corollary, "Linux is more valuable if your time is worth much."

    • Here's what clinched it (Score:5, Insightful)

      by mblase ( 200735 ) on Tuesday July 15, 2003 @05:34PM (#6446971)
      Though Microsoft underbid IBM and SuSE by $11.9 million in Munich, city officials were concerned about the unpredictable long-run cost of Microsoft upgrades

      The city paid MUCH more money to IBM/SuSE because they didn't want to be locked into Microsoft's refusal to support/insistence on upgrading their software after X number of years. Linux let them upgrade when they wanted to, and not before. It was a long-term financial decision which, I'm certain, IBM and SuSE emphasized heavily in order to score a win.

      Big, big news to other cities and corporations out there. A Microsoft contract is a dangerous thing when money is/will be tight. You can save a lot of money down the road if you make the switch today.

      • Re:Here's what clinched it (Score:3, Interesting)

        by jafac ( 1449 )
        This has become obvious on the Govt project on which I'm working.

        Our project was a 5-year one.

        It was spec-ed out with the technology that was current at the time - and we're building a system that's 5 years out of date. It meets the original requirements, but now we're being hounded to upgrade everything (and re-code to account for all the changes that entails). With no additional funding.

        And when we deliver the project, in another two years, it will be obsolete again. And unmaintainable. And unlikel

      • The city paid MUCH more money to IBM/SuSE because they didn't want to be locked into Microsoft's refusal to support/insistence on upgrading their software after X number of years. Linux let them upgrade when they wanted to, and not before. It was a long-term financial decision which, I'm certain, IBM and SuSE emphasized heavily in order to score a win.

        I think plain cold reality also played a part.. Think about the two options

        a) Pay 25 Millions to Microsoft, most of the money goes to the US, and ends

    • Re:quality and value (Score:4, Informative)

      by NecroPuppy ( 222648 ) on Tuesday July 15, 2003 @05:35PM (#6446973) Homepage
      Actually, if you read the article (What? on Slashdot?!?) you'll see that Microsoft's final offer didn't come in soon enough to be reviewed by the Munich Council's tech/contract experts, and that they didn't take the offer seriously.

      • Re:quality and value (Score:4, Interesting)

        by Laur ( 673497 ) on Tuesday July 15, 2003 @05:50PM (#6447121)
        No, their offer before the last minute offer was still lower than Linux, just not by as big a margin. Besides, Microsoft's last ditch efforts just kinda pissed people off.

        MS: "This is our best offer."
        Munich: "Thanks, but we're going with Linux."
        MS: "OK, take off another 8 million."
        Munich: Wha... But you just said ... Grr...

        • I think their "last minute" offer shows that Microsoft still thinks that everyone else either stands in awe or cowers in fear when in Microsoft's presence. I think that the deal-makers at Microsoft were thinking, "They'll be stunned to receive a deal from someone the likes of Microsoft!" only to be completely chagrined when Munich was not impressed. Microsoft isn't used to having to bargain. They're used to having their way.

      • Re:quality and value (Score:4, Insightful)

        by RedHat Rocky ( 94208 ) on Tuesday July 15, 2003 @05:55PM (#6447177)
        From the article, that last minute cut (after many cuts already) was for offering Word separate from the rest of the Office suite.

        That to me speaks volumes of how desperate Microsoft was to win and it sounded like the Munich council picked up on that as well.

    • Re:quality and value (Score:5, Insightful)

      by Amiga Trombone ( 592952 ) on Tuesday July 15, 2003 @05:35PM (#6446984)
      Yes, that's interesting. Up until this point, Linux has competed mostly on price. Now it appears to have graduated to competing on value.

      This should be a great incentive for ISV to start porting their desktop software over to Linux. The fact that they were willing to pay more a Linux solution than a Windows one is a signal there's actually a buck to be made selling software on the platform.

      No longer is Linux merely the OS choice of cheapskates and freeloaders - some customers are willing to pay cash for their software!

      • Re:quality and value (Score:4, Interesting)

        by deadsaijinx* ( 637410 ) <animemeken@hotmail.com> on Tuesday July 15, 2003 @05:57PM (#6447194) Homepage
        the two most common factors that I've seen for switching to linux have very little to do with the prowess of linux. They are price and pure disgust of MS. I think anti-MS sentiment is one of Linuxes selling points. Often, when I help people convert their small business file-server to Linux, they make that choice namely because of frustrations with MS and Windows, not because of any particular prowess in Linux itself. They do, however, quickly see that Linux owns on the server end.

        • Re:quality and value (Score:4, Insightful)

          by kwiqsilver ( 585008 ) on Tuesday July 15, 2003 @06:09PM (#6447304)
          I wouldn't be surprised if part of the decision was based on giving the contract to a German company over an American one.

        • And no license compliance overhead (Score:5, Interesting)

          by jackbox ( 398140 ) on Tuesday July 15, 2003 @06:57PM (#6447765)
          I didn't see this mentioned in the article or in the comments here, but I'd bet one of Munich's "strategic" considerations was the overhead in managing license compliance. Particularly with MS's concession to unbundle MS Word for some machines. Watch those savings go down the tubes when the MS lawyers come by and say, "So, can you prove you have installed only MS Word on X thousand machines?"

          Assuring license compliance on desktops is a frickin' nightmare, and the lack of that overhead is a major advantage of open source software.

          (And that's not even considering the ridiculousness of the Microsoft position that basically says, "We want your business so much we're going to let you NOT buy some of our software that you don't need! Yes, normally, we make everyone buy this whether they need it or not, but because we pride ourselves on being customer-driven, we will actually break our own rules and not sell you something you don't want!") Sheez. GMAB. (Give Me A Break)

      • Re:quality and value (Score:5, Insightful)

        by sadtrev ( 61519 ) on Tuesday July 15, 2003 @06:08PM (#6447293) Homepage
        Yes, that's interesting. Up until this point, Linux has competed mostly on price. Now it appears to have graduated to competing on value.

        No, Linux won because it competed on freedom.

      • Re:quality and value (Score:5, Insightful)

        by jc42 ( 318812 ) on Tuesday July 15, 2003 @07:17PM (#6447933) Homepage Journal
        Up until this point, Linux has competed mostly on price. Now it appears to have graduated to competing on value.

        I'm not sure that's really true. In any number of discussions, I've seen that people repeatedly bring up variants of the question:

        "Do you want your data to be under the control of a big American corporation that doesn't have your interests at heart?"

        This is a really scary question to a lot of people in the world (including quite a lot of Americans). It has nothing to do with price; it's all about control.

        For government agencies in particular, which have to function on longer terms than the current fiscal year, proprietary data formats are a serious problem. If you can't read your own files 10 or 20 years from now, you will be in bad trouble.

        The fact that linux (and BSD) solve these problems very nicely is much of their appeal. The fact that, over the long run, you can save a lot of money is nice, too, but it's not the clincher.

    • Here's the clincher (Score:4, Interesting)

      by mblase ( 200735 ) on Tuesday July 15, 2003 @05:38PM (#6447002)
      Though Microsoft underbid IBM and SuSE by $11.9 million in Munich, city officials were concerned about the unpredictable long-run cost of Microsoft upgrades

      Munich chose to spend a little more money now to save a LOT of money down the road. This was a big decision, and may have political ramifications in the short-term, but no doubt it was a wise one. Microsoft's strategy is to push an upgrade after X number of years by cancelling support for older products. With Linux, the city can upgrade what they need to, when they need to.

    • Re:quality and value (Score:5, Insightful)

      by UnknowingFool ( 672806 ) on Tuesday July 15, 2003 @06:05PM (#6447255)
      Something that is not stressed enough in the TCO arguments is the long term cost of upgrades. Although software upgrades for Linux is much lower than Windows, a good portion of savings is in hardware upgrades.

      For the most part, you don't need to updgrade your machine every time a new major version of Linux comes out. Unless you are running a high end PC before you upgrade Windows, you need to upgrade your hardware too. Cities and schools probably don't have the latest computers so a city like Munich might have many computers that they would need to replace. Even at a low rate of 10% replacement and an absurdly low cost of $300 per computer, that's $420,000 that is not included into the price tag.

      Another thing to understand is the nature of the deal. With MS you are paying $31.9 for software and service. I don't know what the breakdown of software vs service, but a great deal of it is software. And we all know how good MS service is.

      With the Linux deal, the majority of the cost is services (installing, customization, etc). So you actually are paying for mostly service. Theoretically you are getting for your money.

    • Microsoft's value was hollow. (Score:4, Insightful)

      by twitter ( 104583 ) on Tuesday July 15, 2003 @07:38PM (#6448118) Homepage Journal
      The only "technical" advantage listed by Munich's consulting firm was:

      Munich ... uses 175 Windows applications for such tasks as managing police records, issuing permits and collecting taxes. ... Linux ... does not work well with Windows programs. Another layer of connection software is required, adding complexity. Unilog judged Microsoft's proposal -- to swap out all existing versions of Microsoft Windows and Office for the newest versions -- as cheaper and technically superior.

      It seems that the only advantage Microsoft really had was that it worked, sometimes, with it's own software. Training was offered by both teams, implying no difference. Once those 175 applications are ported out of Windoze, what will Microsoft have to offer? Painful file formats? A single screen GUI, inferior networking, poor security, inferior stability and data loss are all hallmarks of Microsoft software. In six years, what's Microsoft going to do to try to win back the business?

      Microsoft screwed their only advantages. They had a tremendous advantage in user familiarity and widespread use. The advantages this offered was supposed to be ease of information transfer and hardware compatibility. Instead of using that, they got greedy and broke interoperability to force upgrades. They also abused their deathgip on hardware manufacturers the same way to foce purchases of new equipment. With advantages like those, who needs flaws? Microsoft squandered money on anti-competitve behavior when it should have been fixing it's own software.

      Free software has stuck itself right into these shorcomings. You can exchange data bewteen free programs though accepted standards. Why you can't get a hardware driver for the new Windoze, you can be sure the old one still works with free software. Free software is doing what Microsoft prommised to do but did not. That's not surprising because free software is made by people who have a job to do and they don't have an incentive to break things.

  • Comment removed (Score:5, Funny)

    by account_deleted ( 4530225 ) on Tuesday July 15, 2003 @05:28PM (#6446897)
    Comment removed based on user account deletion

  • Recent news... (Score:3, Funny)

    by skidrowe ( 688747 ) <dave@rTOKYOoweware.com minus city> on Tuesday July 15, 2003 @05:29PM (#6446908)
    Bill Gates was seen curled up in the fetal position after learning the marketshare held by Microsoft would drop from 90% to 89%

    "ooh...can't lose marketshare...can't lose marke-...gaahh!!"

  • Well, just goes to show... (Score:5, Funny)

    by daeley ( 126313 ) * on Tuesday July 15, 2003 @05:30PM (#6446919) Homepage
    I guess Ballmer's "Ich bin ein Bavarian Creme Pie" speech didn't go over so good with the Mayor. ;)
  • I think that in the long run, Linux will be cheaper than M$. This is for seveal reason which I won't go into as most of you are familiar with Linux. Even so, it is good to see/know that MS will bend when put in such a position. With all the Linux news I've seen/read over the past few days, I would be surprised to see MS push out some products sooner. It looks like MS is slowly loosing its grip on the market, but then again, its looked that way for a while. Only now are we seeing them fight fire with fi

    • Re:The Long run... (Score:3, Insightful)

      by Valiss ( 463641 )
      I just noticed.. the article sums it best:

      Open-source advocates counter that Munich proves tech buyers are beginning to demand price cuts from Microsoft while giving Linux a serious look.

  • Mozilla? (Score:5, Insightful)

    by jj00 ( 599158 ) on Tuesday July 15, 2003 @05:31PM (#6446927)
    From the article: "...Mozilla, a Web browser that can perform basic workplace tasks"

    How about: "Mozilla, a web browser with more features than Internet Explorer"

  • Ballmer (Score:5, Funny)

    by blackmonday ( 607916 ) on Tuesday July 15, 2003 @05:31PM (#6446928) Homepage
    Well, they actually considered buying from Microsoft until Ballmer showed up doing the monkey dance [msboycott.com].

    • Re:Ballmer (Score:4, Funny)

      by greysky ( 136732 ) on Tuesday July 15, 2003 @05:58PM (#6447204)
      I can just see it now:

      Blamer (Bathed in sweat and stomping arround the room): "Berliners! Berliners! Berliners! Berliners! Berliners! Berliners! Berliners! Berliners! Berliners!"

      Ude (looking quite confused): "For God's sake, someone get this freak a doughnut!"

  • Oh come on... (Score:4, Insightful)

    by frodo from middle ea ( 602941 ) on Tuesday July 15, 2003 @05:31PM (#6446930) Homepage
    to what length Microsoft went to avoid loosing contract to linux

    I am all for linux, but now are we going to bash Microsoft for trying to do business. People this is business, its a cut-throat world not a woodstock concert.

    Of course M$ will do everything in its power to bury linux, what's the news here ?

    • Re:Oh come on... (Score:5, Insightful)

      by juuri ( 7678 ) on Tuesday July 15, 2003 @05:52PM (#6447141) Homepage
      I'm not really into bashing Microsoft continually, that was so 1995 and BBS-like but...

      I guess the news here is that parts of the world outside the tightly wound tech community are starting to realize how over priced Microsoft software is. In this specific instance they noted this condition when Microsoft kept dropping their software prices. Sure it may only be one government, but soon it may be many and eventually the U.S. one as well. Hopefully the competition will continue to drive down software prices for everyone in the WinTel world.

      The other good thing here is that it shows the OS war isn't over completely. So maybe someday in the future we may see some serious OS innovation again from some small upstart company or group of individuals. As great as linux/the bsds are they are a refinement not an innovation.

    • Re:Oh come on... (Score:5, Insightful)

      by jrumney ( 197329 ) on Tuesday July 15, 2003 @05:52PM (#6447147)
      When foreign companies "try to do business" with the US, they end up being accused of dumping, leading to trade barriers against a whole nations industry. Look at what happened to the Japanese supercomputer industry when NEC tried to get a foot in the US supercomputer market a few years ago.

    • Re:Oh come on... (Score:5, Insightful)

      by Laur ( 673497 ) on Tuesday July 15, 2003 @05:53PM (#6447155)
      Of course M$ will do everything in its power to bury linux, what's the news here ?

      That they lost?

    • Re:Oh come on... (Score:5, Interesting)

      by SmallFurryCreature ( 593017 ) on Tuesday July 15, 2003 @06:06PM (#6447279) Journal
      The news is that Microsoft has forced through an extremly controversial licensing policy on its customers. It defended this in saying that it really was in the customers best interest. That in the end it was cheaper for the customers. Most customers caved in and signed up for it and Microsoft had won. You now lease software and pay for upgrades you may never ever use while locking youreselve ever more thightly in their grip.

      Then one little city rebelled and MS instantly rewrote the licensing deal. How many other MS customers who swallowed the original deal will now feel extremely pissed off? Pissed off enough to demand the same kind of cuts when their contract is up for renewal?

      That is the real story. That MS has caved in on its own demands when faced with a little bit of pressure.

  • Wasen't Cost (Score:5, Insightful)

    by zulux ( 112259 ) on Tuesday July 15, 2003 @05:32PM (#6446935) Homepage Journal
    The real interesting thing that this article brough out was that the decision by wasen't made due to up-front costs: Microsoft brought their bid down to below IBM/SuSE's bid by several million dollars.

    Probably, the government realised that the Microsoft solution had higher total 'costs' due to:

    *vendor lock-in
    *poor reliability
    *poor scalability
    *poor security
    *poor standards compliance

    amung other items.

    • exactly, they said the decision was a 'strategic' one. but what about hidden costs associated with linux? aren't there far less linux compitent IT guys available then there are MCSE drones?

      • Re:Wasen't Cost (Score:3, Insightful)

        by benjamindees ( 441808 )
        aren't there far less linux compitent IT guys available then there are MCSE drones?

        That, sir, is a *good* thing. It means that those who choose to learn and support Linux are the ones who are 1) intelligent and competent enough to do so, and 2) bright enough to see that Linux is the correct long-term choice. Besides, it takes less Linux admins for a given number of boxen than it does MCSE's.

  • Horray for Choice (Score:5, Insightful)

    by Webtommy88 ( 515386 ) on Tuesday July 15, 2003 @05:32PM (#6446943)
    ...Microsoft last March dispatched CEO Steve Ballmer to the rescue....Documents obtained by USA TODAY show Microsoft subsequently lowered its pricing to $31.9 million and then to $23.7 million -- an overall 35% price cut. The discounts were for naught.

    for the non believers: The CEO of MS himself went to a sales call and lost the sale, you better start beliving Linux is a threat to MS.

    3 Cheers for all Linux, OSS, and Choice! Hip Hip Horay!

  • Fledgling newspaper prints Linux article... (Score:5, Insightful)

    by jtalkington ( 668415 ) on Tuesday July 15, 2003 @05:33PM (#6446948)
    ... was leaning toward a switch to Linux, the upstart computer operating system whose open-source code is continually improved by volunteer programmers worldwide.

    How many big contracts have to be won by Linux companies before the papers realize that it's been around for a dozen years? Or that not everybody working on OSS is a volunteer?

  • More Expensive? Yes, but here's why they chose it (Score:5, Insightful)

    by moorg ( 537751 ) on Tuesday July 15, 2003 @05:36PM (#6446988)
    Quote of the year IMHO: "Microsoft's philosophy is to change our software every five years," Strobl (Munich council member Christine Strobl ) says. "With open-source, it is possible for us to make our own decision as to when to change our software."
  • Chalk it up to socially liberal German culture and their aversion to structure and regulation from above.


    Excuse me, my head hurts now.

  • Government uses tax payers' money to purchase the computer equipment.

    The German legislation requires, that government has to make a public
    call for offers, and then choose the cheapest offer. This was done
    for buildings etc, and recently it occurred to the Germans that this
    law also applies to computers and software. After all, it's quite a
    huge investment. Unless Microsoft lowers the price, or Linux increases
    the price, or Microsoft bends the numbers so that their offer appears
    cheaper than Linux, government
    • ummm, actually even before MS started their discounting, the linux solution was more expensive - blows you're theory out of the water

      the reason why linux was chosen over MS was because MS' approach was viewed as being somewhat deceptive, and because linux wouldn't leave them in a lock-in situation years down the road
    • I think, the German government is not keen on using Linux over Windows,
      and they will appreciate when someone comes along with a good-looking
      statistics that allows them to go Windows without risk of being held
      liable later.

      I am not so sure. SuSE is a german company, thus the money stays within the german economy unlike with the M$ solution where the money would go across the Atlantic.

      There always was an interrest in Linux, but they couldn't justify it because nobody big was backing it.

      If Munich pulls thi

  • ...naming its own price ... (Score:5, Insightful)

    by burgburgburg ( 574866 ) <splisken06NO@SPAMemail.com> on Tuesday July 15, 2003 @05:37PM (#6446996)
    "Though Microsoft underbid IBM and SuSE by $11.9 million in Munich, city officials were concerned about the unpredictable long-run cost of Microsoft upgrades, says Munich council member Christine Strobl, who championed the switch to Linux. And the more Microsoft discounted, the more it underscored the notion that as a sole supplier, Microsoft could -- and has been -- naming its own price, she says."

    It makes me feel good to know that finally someone other then a bunch of geeks is getting it.

  • Seen in Munich (Score:3, Funny)

    by teamhasnoi ( 554944 ) * <teamhasnoi AT yahoo DOT com> on Tuesday July 15, 2003 @05:40PM (#6447023) Journal
    Steve Balmer, head in hands, sitting on street corner rocking back and forth whimpering, "Delvelopers...*sniff*..Developers...*choke*... DEVELOOOOPERRRRRSSss!!!...*weep*

    Hey Steve, where's your Moses now??

  • FUD (Score:5, Insightful)

    by The Bungi ( 221687 ) <thebungi@gmail.com> on Tuesday July 15, 2003 @05:41PM (#6447036) Homepage
    Reading the article, it's clear that:
    • The negociations where in step with what Microsoft is accostumed to doing with big accounts, regardless of who or what the competing "thing" happens to be. And it's no different from what other big software houses (Oracle in particular) do as a matter of fact when engaged in stuff like this. The idea that Microsoft was somehow "more desperate" because it was bidding against Linux is stupid.
    • Yay free software. They ended up spending millions of dollars more over the Microsoft package. I'm sure training and attrition will offset whatever benefits they could have realized by avoiding the "forced upgrades", which SuSe will most certainly start doing eventually when they come to their senses, just like RH did. In any case, Microsoft was willing to defer the upgrade cycle for them. So it was more expensive and it will probably be about the same in the long run
    • The vote was 50-30. Doesn't seem to me like an "overhelming" victory. Well, I guess it depends who you're rooting for.
    Furthermore, I'd like to continue seeing articles about this topic here. I.e., how is the switch going, how much Munich ends up spending over the next 12 months, what their rate of attrition is, etc. All of previous articles smacked of "hahaa, we stick it to the man!!!1", which is nice but worthless unless all we're interested in is FUD and fluff.

    If anything, this will be watched by other cities and companies to see how well it works. I hope it does work, because Microsoft will be forced to change the way it does business. But it better damn work.

    • Re:FUD (Score:5, Interesting)

      by IamTheRealMike ( 537420 ) on Tuesday July 15, 2003 @05:55PM (#6447169)
      Yay free software. They ended up spending millions of dollars more over the Microsoft package.

      Yes, however they got a lot more for their money (in terms of software, support and local employment) and this was only after Microsoft gave large discounts.

      I'm sure training and attrition will offset whatever benefits they could have realized by avoiding the "forced upgrades", which SuSe will most certainly start doing eventually when they come to their senses, just like RH did.

      The effort to switch from SuSE Linux to Red Hat Linux, or to Mandrake, or to MunichCity Linux, is very very low. Not nil, but low. So, if SuSE or IBM did try and screw them, they could go elsewhere.

      Despite that, I don't understand how upgrades are forced. You can still download very old, unsupported versions of Red Hat Linux. If you're referring to the "only 12 months of free errata" thing, then who cares? RHL is meant for developers and home users now, not servers or corporate desktops. I know people still running on RH 7.1, they aren't dead yet.

      I think it's rather disingenuous to jump from that to "forced upgrades". If I could still buy Windows 98 then maybe you could also argue that Microsoft don't try and force upgrades, but you can't....

      The vote was 50-30. Doesn't seem to me like an "overhelming" victory. Well, I guess it depends who you're rooting for.

      I think it was meant in the sense of "overcame overwhelming odds" - ie Microsoft, Ballmer himself, offers very large discounts, you've got all the inertia and proprietary lockin there, and still Linux won out. Not in terms of vote numbers.

  • Quote from the article (Score:5, Funny)

    by jeffy210 ( 214759 ) on Tuesday July 15, 2003 @05:41PM (#6447039)
    Ballmer cast open-source software as having 'no center of gravity'

    What it means is "We don't know where to attack, because we can't buy them out"
  • I've double checked, but the article isn't a cleverly disguised link to The Onion. Quote:

    USA TODAY obtained government and corporate documents that provide a rare insider's look at Microsoft's efforts to keep from losing a key customer. Among other things, it:

    * Agreed to let Munich go as long as six years, instead of the more normal three or four, without another expensive upgrade, a concession that runs against its bread-and-butter software upgrade strategy.

    * Offered to let the city buy only Microso

  • From the article:
    It includes a growing number of freely distributed applications, such as OpenOffice, a Microsoft Office clone, and
    Mozilla, a Web browser that can perform basic workplace tasks.
    Just what basic workplace tasks does Mozilla do? Browse the web? Handle e-mail? Basically do the things that we would expect of a Web browser. Seems the author was a bit vaque on what Mozilla is capable of.
  • Though Microsoft underbid IBM and SuSE by $11.9 million in Munich, city officials were concerned about the unpredictable long-run cost of Microsoft upgrades, says Munich council member Christine Strobl, who championed the switch to Linux.

    Game.

    And the more Microsoft discounted, the more it underscored the notion that as a sole supplier, Microsoft could -- and has been -- naming its own price, she says.

    Set.

    ''Microsoft's philosophy is to change our software every five years,'' Strobl says. ''With open-

  • The server isn't the big deal (Score:5, Insightful)

    by Dark Paladin ( 116525 ) * <jhummel.johnhummel@net> on Tuesday July 15, 2003 @05:53PM (#6447152) Homepage
    In the case of Munich, as the USA article points out, it's the fact that the city is replacing desktops.

    To Microsoft, this is the Kiss of Death. They really only make a huge profit off of two items:

    Desktop OS - the so called "Microsoft Tax" that is the reason why when I go to dell.com (well, not that I would, I'd go here instead [apple.com] for my Unix needs), I can't get a $100 price discount on a new computer by having it be "naked".

    Microsoft Office

    Other than these two, they don't make a lot of money on other stuff. Oh, some on server licenses, but a pittance compared to Desktop OS sales and Microsoft Office. The Xbox is losing money, I haven't heard anything profitable about their cable investments, and their games division (with the exception of the Xbox) is doing decently.

    But the two things that keeps them with that $35 billion in cash is Desktop OS and Office. And Munich basically said "no" to both of them, so they would have the ability to upgrade when Munich wanted, not when Microsoft wanted.

    And that's been Microsoft's winning business edge for years. We'll sell you Windows 98 - and in 3 years, you'll have to get Windows 2000 if you want to be able to do stuff with your vendors, your co-workers - you'll have to put it onto your machine at home if you plan on taking work home and doing stuff there.

    Munich just got off the Wheel of Upgrades. Now you wonder how many employees will feel they have to upgrade their home computers? How many employees (espeically managers) will go to the IT department and say "Hey, I got a laptop - make it so I can do the same stuff I do here in the office on the road", and they walk out with a SUSE installed machine.

    There's still some things they'll have to do on the Desktop end to make things as easy to use as the Windows world, and I trust that will be part of what Suse and IBM were just paid for.

    But this is a major step for Linux in business, and Linux on the desktop. And what can Microsoft do about it, other than really compete for the first time on something other than forced installation upgrades?

    For the record, I don't think Microsoft is "evil", but I do think they haven't had a real challenge in business because of their predatory business practices. I think it's great they're having a real competitor. Costs will go down, products on both sides will get better, and it someday I might be able to migrate back from OS X over to Linux - once it provides the same ease of use with Unix power I get from OS X.

    And competition with Microsoft is just the thing it needs to get itself there. I'm patient - I'll say another 5 to 10 years before I have what I want.

    But Munich is a good start.

    Oh, and this is all just my opinion - I could be wrong.

    • Re:The server isn't the big deal (Score:5, Insightful)

      by zulux ( 112259 ) on Tuesday July 15, 2003 @06:18PM (#6447403) Homepage Journal
      I do think they haven't had a real challenge in business because of their predatory business practices.

      My Dumb Idea:

      The Linux uprising has been helped by Microsoft killing the competition.

      If BsOS 11 was out, would you still be using Linux?
      If Apple was twice as large, as was able to spend twice as much money on their os, would you still be using Linux?
      If Amiga 2004 was just released, would you still be using Linux?

      Microsoft killed all the invation, and this allowed a clone of a old crufty Unix system become suddenly a viable chouice - when you compare it to Microsoft. Linux woulden't be so viable if you had to compair it to what Amiga 2004 would have been.

      (and yes, in case you're worndering, I love Linux and *BSD)

  • Steve Ballmer, Visionary, Dead on June 4 (Score:5, Funny)

    by ackthpt ( 218170 ) * on Tuesday July 15, 2003 @05:54PM (#6447161) Homepage Journal
    Rumors continue to circulate around Redmond, Washington, home of Steve Ballmer's employer Microsoft, that he died on June 4th after returning from Munich, Germany, of a massive FUD failure. Mr. Ballmer had tavelled to the technology hub of Germany in order to prop up sagging preceptions of product value, armed with a full portfolio of buzzwords and authorized to offer significant concessions in order to prevent loss of an important sale and save face in a key facet of the European Market. Drenched with sweat and mumbling explitives, Mr. Ballmer emerged from a company plane and collapsed. A cumpled note in his hand, addressed to Microsoft Chairman, William Gates III, contained only one word, "Rosebud"

    More details to follow...

  • I love this story (Score:5, Funny)

    by Linux_ho ( 205887 ) on Tuesday July 15, 2003 @05:54PM (#6447162) Homepage
    As many of you know, at the recent O'Reilly Open Source convention, Microsoft provided sack lunches to attendees for free. The Munich article reminds me of one guy's comment: "They should get used to us eating their lunch."

  • Linux used in political campaign (Score:5, Interesting)

    by Domino ( 12558 ) on Tuesday July 15, 2003 @05:55PM (#6447178) Homepage
    As much as I welcome that the city of Munich has decided to use Linux, I am really pissed that the ruling party in Munich, the SPD, is now running a poster campaign all over Munich with the slogan:

    Mehr Linux, Mehr Freiheit, SPD
    (More Linux, More Freedom, SPD)

    Linux should not be misused by political parties to strengthen their chances for reelection.

    Here's [lumma.de] a screenshot of the poster.

    • Re:Linux used in political campaign (Score:5, Informative)

      by Holger Blasum ( 250938 ) on Tuesday July 15, 2003 @07:35PM (#6448083)
      IIRC political discourse (be it on slashdot or in an election) was meant to be about things that matter?
      This comprises technology and its economic/social
      implications.

      Moreover, Lochner-Fischer (the candidate who had
      printed the poster) actually has been a C application
      programmer, so she understands the issue and her
      stance in this is credible (I also saw her personally).

      For bipartisan balance: [cdu-hannover-stadt.de]
      Former Fortran programmer posing with Jon Maddog Hall, also a good thing.

  • Some background information (Score:5, Informative)

    by fxj ( 267709 ) on Tuesday July 15, 2003 @06:04PM (#6447247)
    The decision was based on a study made by a consulting firm in which the upgrade solution to winxp was cheaper than a pure linux solution on the time base of 5 years ! In the longer run the study claims that linux is cheaper than m$. also a solution with vmware was compared which was the cheapest of all ! The study claimed that for the pure linux solution they would have to buy a lot of new peripherials (card readers, printer etc) which makes the linux solution more expensive. a big problem for the winxp solution was that they would have to buy a lot of new hardware (new processors, more ram) which they wouldnt have to using linux. a short version of the study is available online:
    http://www.heise.de/newsticker/data/anw-2 7.06.03-0 03/
    (sorry in german, use the fish)
    the study is here:
    http://www.muenchen.de/aktuell/clientstudie _kurz.p df

  • SUSE vs Microsoft, not Linux vs Windows (Score:3, Insightful)

    by jhunsake ( 81920 ) on Tuesday July 15, 2003 @06:05PM (#6447258) Journal
    They simply wanted to deal with a German company, not an American one.

  • Microsoft won the homeland security contract (Score:5, Funny)

    by PhrackCreak ( 136718 ) on Tuesday July 15, 2003 @06:09PM (#6447315)
    In an opposing decision, microsoft won [reuters.com] the contract to suppply server and client software to the department of homeland security here in the US.

  • 600 pound gorilla (Score:5, Insightful)

    by MrLint ( 519792 ) on Tuesday July 15, 2003 @06:13PM (#6447363) Journal
    This story is really interesting for showing us what, as the blurb says, MS will give up to try to hold on to its contracts. Please permit me to juggle for a moment...

    The fact that MS was willing to let Munich unbundle office is indicative that people dont want to pay for huge monster suites that they arent using most of. And in a govt organization this is even more true. Your average memo writing paper pusher doenst need to use excel.

    MS, being the monster it is, is tripping over itself trying to dodge the bullets of its smaller, faster, and more flexible competitors. It's as if MS wants to jam the status quo down the throats of large organizations, hoping everyone will think "well everyone else uses MS is going to have to also to work with the rest of the to world." (not to mention I [and probably you] have heard variations on this theme before)

    In today's climate of cost cutting and internet security disasters, the managers want to make sure people have the necessities to perform their job functions and not a bunch of extra crap to screw around with. A one size (license) fits all approach cannot meet that goal. The fact that the CEO has to show up implies 1 of 2 things. 1) The salesperson didnt have the authority to make such changes that the customer wanted. 2) Or if he did the initial beating over the head of the initial proposal spooked Munich so much they needed executive handholding.

    Lint - Professional amateur analysis while you wait. Call for more details!
    • but 600 pounds? Sheesh, that's just being mean.

  • World domination (Score:3, Insightful)

    by Tailhook ( 98486 ) on Tuesday July 15, 2003 @06:14PM (#6447373)
    "First they ignore you, then they laugh at you, then they fight you, then you win."

    Guess we're at the "fight" part. Wake me up when it's over.

    Thanks!

  • Any chance this is nationalism? (Score:4, Interesting)

    by geekee ( 591277 ) on Tuesday July 15, 2003 @06:37PM (#6447584)
    So Munich pays a German sw company more for software support instead of paying an American company less. Sounds like nationalism had some role in this. Certainly the US govt. support of MS has something to do with them being a US company.
    • IBM is a US company, last time I checked. Maybe they moved? Its worth noting that SuSE does market the most viable Linux based OS for the European market, and that their supported hardware list is quite impressive. I usualy recommend SuSE to my non-geek friends as a good turn-key OS.

  • Other costs (Score:4, Funny)

    by El ( 94934 ) on Tuesday July 15, 2003 @06:45PM (#6447656)
    Costs estimates failed to take into consideration the costs in lost productivity due to having solitaire installed on every desktop! Yep, my corporate installed Windows XP box has the productivity enhancing suite of FreeCell, Hearts, Solitaire, Pinball, Internet Backgammon, etc. What that hell were they thinking when they decided to give games to every employee?

  • Problem is the retail end in North America (Score:3, Insightful)

    by ratfynk ( 456467 ) on Tuesday July 15, 2003 @06:47PM (#6447677) Journal
    How do you effectively sell software for Linux. Retailers have given up. How do you effectively sell hardware for Linux boxen? Staples in Canada used to sell Linux other than Mandrake now they do not, Future Shop still has Linux software, but if you talk the sales rep (usually a fresh pimple faced MS a+), they are brain dead about simple things like good partion setups and hiding, necessary to effectively dual boot. Other retail chains (like Office Depot) do not even try to sell Linux and become quite hostile when you suggest that their tech knowledge sucks. Lets attack the real cause of the MS monopoly, it is not software. It is the MS hardware partner system that keeps retailers in line. We need to develope, through GNU, Oss, Osdn etc, a Linux friendly hardware and product certification sticker system that consumers wanting to give Linux a shot can trust. The idea of a happy penguin logo is not too bad.

    After all that is the way MS, works you get assurance the the stuff you buy will work, then if the device sucks you have no one to blame but the manufacturer. If the North American retail and business market is to be addressed then the sale of Linux ware and tech help in retail need to be a focus for Oss people.

    Don't give me any of that Bill Gates crap about everything being free and you cannot make money, there is no reason why software companies cannot use and improve Linux ware it is just that only the ones that offer effective customer support will thrive. In business that is the way it should be, not the current system "you have to use this software product because our hardware only runs this way!"

  • While I make a living from M$ software I'm always looking at the Linux alternative, I've just begun installing and maintaining both Linux and Windows servers for a hosting company. The OSes are split about 50/50 all on Intel hardware.

    High profile decisions attracting media attention like this could cause a snowball that crushes all over M$ at a speed never before seen in the business world. I'll even sum the reasons up for you:

    1. Microsoft has just pissed of all of it's largest customers who will want to know why they don't get breaks like this.

    2. The public will begin to see that hundreds of M$ programmers can't possibly compete with thousands of OS developers.

    3. Every company that reads about deals like this will also be expecting huge discounts from M$.

    4. Forcing companies to upgrade every 5 years means that each company must also evaluate their IT needs, this continually forces a company to reevaluate their IT infrastructure which means a regular comparison against OS products.

    5. What sort of a company allows details like this to leak? Now all of their customers are going to expect huge price breaks.

    6. OS might be more expensive to support now but as soon as the huge shortage of OS network engineers is resolved support costs will come down - forget the desktop argument, Linux isn't getting very far now because there's so few people that can install it for small to mid sized businesses for less than $100 an hour.

    7. Did I mention how every company is going to start threatening to go OS to get increased benefits and discounts?

    8. Even though there is a shortage of qualified OS network engineers the ones that there are know their beans, they know their hardware and software a whole lot better than an equilavent M$ engineer.

    9. M$ has a terrible market name and security history. The whole of the IT industry has monumentally changed over the past 7 or 8 years. Windows 98 and Windows NT were never made with the internet in mind, every "update" and "add on" to Windows is another patch to make Windows do something it was never designed to do. It's little wonder there's been so many bugs introduced over the years.

    10. My God! M$ customers are being given the green light to hold out and bargain hard because M$ will cave in the end.

    There's a few other reasons that this could happen too. M$ OSes have gotten more mature and gotten exponentially better with every revision (discount Windows ME).

    The basic trade off between OSes for companies to consider now is this:

    With Linux you are locked in with your support company (small businesses especially) and there are far fewer qualified people to work on your network

    M$ offers standardized systems and a tried and true support methodology. Real world performance with the history to prove it.

    I consider M$ products to be the superior when competing with other OSes. Windows 2000 always installs on standard hardware and I know that if M$ says a product will do something then I know it will do it (maybe not well or as well but that's moot).

    Anyway that's my take on this, I hope everyone has bookmarked this story and emailed it to their managers.

    John the Kiwi
    • You don't know MS to well do you.

      MS needed to make Linux didn't get a big deal and some legitimacy. They could have lost money on the deal and wouldn't have cared.

      If someone small comes and says we want discounts and am pretty sure MS would say "No"

      And then the small company would evaluate the cost of switching(linux or some thing else) to keeping current software to upgrading.

      If enough small company switch then maybe MS will change but until then... don't hold your breath.

  • Next customer's starting point (Score:3, Interesting)

    by Sloppy ( 14984 ) * on Tuesday July 15, 2003 @07:35PM (#6448085) Homepage Journal
    Microsoft's last offer, with the prices low and the debundling and the longer-term support .. should make a good starting point for them, in negotiations with every single potential customer from now on.

    If you're thinking of buying a Microsoft product, then ask them: "Surely I shouldn't get a worse deal than what you were willing to offer Munich?" It's just a question of how much better they can make that deal, for it to start to look competitive.

  • The Enemy Within (Score:5, Insightful)

    by Ridgelift ( 228977 ) on Tuesday July 15, 2003 @08:23PM (#6448464)
    "Microsoft's biggest enemy is themselves," says Gartner's Silver. "They do things that make people very upset and engenders a lot of resentment."

    That about sums it up for me. What upset me the most was the inability to master their products. I've worked with small businesses for over 7 years installing and supporting LANs. I began my career as a CNE with Novell NetWare, transitioned to Windows (which was the worst 4 years of my life), and now work exclusively with Linux. From my experience, It's impossible to avoid huge time-sucking disasters because of Microsoft's constant upgrade and patch cycles. Their End User License Agreements (EULA's) absolve themselves of all wrongdoing, and leave techs like myself holding the bag. After years of blowing out the operating system and reinstalling, hoping that a shotgun approach of service packs and hot fixes would make the problems go away, and reading everything under the sun only to find documentation fraught with errors, I gave up. Which is why two years ago I adopted the mantra "I don't do Windows" and set my mind on Linux. My current job is with a company moving their 2 servers & 22 workstations off Windows NT/98/XP, and onto Debian GNU/Linux.

    And I'm happy now :-)

    There's no such thing as a Windows expert. There's only "I can flail around in the dark better than you can".

  • I hope.... (Score:3)

    by Dr Reducto ( 665121 ) on Tuesday July 15, 2003 @10:50PM (#6449452) Journal
    " Interesting to see how these types of contracts are structured, and just what Microsoft is willing to give up to prevent losing to Linux."

    I hope Microsoft will give up their entire business in order to not lose to Linux.

  • Gallman (Score:3, Interesting)

    by Johnny Mnemonic ( 176043 ) <mdinsmore@NoSPaM.gmail.com> on Tuesday July 15, 2003 @11:05PM (#6449547) Homepage Journal

    From the article:

    With battle lines drawn, Microsoft turned to a freshly hired recruit, Jurgen Gallman, steeped in Linux. Until last November, Gallman had been IBM's top Linux executive in Germany.

    Nobody else (at +5) has commented on it, but this guy must sure feel like a tool...
  • Linux, linux, linux... really?
    Follow the money. This is about one company beating another in an important deal. The winner here is IBM, who have promised Munich a better deal than Microsoft was able to deliver.
    Linux is IBM's (not so) secret weapon, the product they can push as a Windows killer.
    Don't forget that for many large institutions and their IT departments, Microsoft is somewhat of an annoying upstart that caused havoc by giving tools like Excel and Access to people who then broke the back of centralized IT. IBM represents the comforting security of Big Iron, and with Linux, Big Iron that is Definitely Hip.
    This is a victory for Linux, but before we all do a dance of joy for freedom and the GPL, remember that this is about money and power and IBM, the company that taught Microsoft everything they needed about monopolies, customer extortion, and unfair competition.
    There is no reason to believe that this is not also the future of an IBM that once again gains a dominant position in corporate IT.
    If there is one crucial device that will keep Linux alive it is the GPL, which is a beautifully designed poison pill against corporate takeovers of free software. Richard Stallman, thanks again!

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