Gateway Testifies To Microsoft's OEM Treatment 656
unconfused1 writes "Gateway testified yesterday about the incredible power that Microsoft wields over OEMs concerning Windows being shipped on every PC. It seems that if an OEM does not ship Windows on every PC they ship that they are severely penalized, and can have their license revoked."
No options in the cut throat pc market (Score:2, Redundant)
Re:No options in the cut throat pc market (Score:2, Insightful)
Re:No options in the cut throat pc market (Score:2)
Maybe if a few of the top PC-maker execs had some sort of backbone
That sounds good in theory, but do you really think Dell or Gateway is going to get some "Backbone" when it would cost them millions, perhaps hundreds of millions of dollars a year. If they don't comply they are effectively giving thier competition a cost advantage. The Exective who successfully implements this, would be fired and the stockholder would probably sue the CEO for not maximizing profits. Oddly, only the smallest niche market players can afford to blow Microsoft off, because thier products cost more anyway.
Re:No options in the cut throat pc market (Score:3, Informative)
When the IBM-PC was introduced there were 3 operating systems available. PC-DOS was about $50 and got the vast majority of the installs. UCSD P-System and a updated CP/M knockoff from Digital reseach were also available, but they both cost over twice as much, not surprisingly PC-DOS won. I used the CP/M variant once, but never saw the UCSD version other than in a bundled runtime with the game Wizardry.
IBM did not make a random decision. MS had established itself as viable in their minds with their CP/M BASIC and AppleSoft products. They made the right promises (and fulfilled them), offered IBM the right price & customer service. At this point in time, IBM was widely regarded as evil incarnate, not MS. MS was a scrappy bit-player, no more. IBM thought that the IBM-PC would sell at most a few-hundred thousand machines over its lifetime, so they did not see it as worth their time to make the system or the O/S propriatary, which is also why they did not bind Microsoft from selling MS-DOS to competitors.
DR-DOS was an eventual competitive MS-DOS clone, and yes, many people ignored it because it was not standard. However, MS also torpedoed it by releasing "fixes" to windows that gave warnings, or actual problems if you were not using the one true DOS.
Re:No options in the cut throat pc market (Score:2, Interesting)
The $10 was an extra "market development funds" refund that MS kicks back. It pays for the Windows logo you see in major OEM advertisments.
Dell (Score:4, Interesting)
Re:Dell (Score:2, Funny)
Re:Dell (Score:2, Offtopic)
Re:Dell already spoken? (Score:3, Interesting)
Maybe Dell has already spoken. Reference this recent slashdot article:
More on Dell Dropping Linux Support [slashdot.org]
Re:Dell didn't speak, the market did. (Score:3, Informative)
Well, of course linux has a small portion of "the market". This is because people who want linux are forced to buy a Windows PC and install linux on it. So almost all of the linux "desktop" machines are listed in sales records as Windows machines.
This is just one of many dishonest ways that people determine what "the market" wants.
If something isn't for sale, "the market" always shows that people aren't buying it.
Duh.
Re:Dell (Score:5, Informative)
Dell's response? A spokesman for Dell, Mike Maher, declined to comment on the case but said the company sells computer equipment with the Linux operating system installed if requested.
"We still offer [Linux] on the [corporate] side and as needed as customers ask for it," he said.
Naturally, this shows a fear of retribution, but shortly after the emails, Dell stopped offer linux on the desktop.
Re:Dell (Score:5, Informative)
Dell stopped support for Linux? I wonder why? [idg.net]
I won't make you go digging (quoting from the above article):
try checking the facts first (Score:2)
Dell still offers Linux! [dell.com]
Well, shit happens (Score:4, Insightful)
I agree that they needed windows because of the demand, but that doesn't mean they take anything Microsoft demands without a whimper.
In the words of Blake, "Do not go gentle into that good night... Rage, rage against the dying of the light."
Fight for what you believe in, or you deserve it.
Re:Well, shit happens (Score:3, Insightful)
Re:Well, shit happens (Score:3, Insightful)
To me, this issue seemed to be the plainest example of Microsoft's abusive monopoly, something even the technically unsavvy could understand.
Understanding is not the issue. Will and desire to do ANYTHING MEANINGFUL to MS is the issue. DOJ, as commanded by Bush, has no will or desire to do anything to MS except make the antitrust suit go away. The lameness of the agreement and the fact that DOJ now acts like they are Microsoft's lawyers in trying to sell this piece of crap demonstrates that conclusively.
How is this NOT racketeering? (Score:5, Interesting)
Re:How is this NOT racketeering? (Score:3, Informative)
Re:How is this NOT racketeering? (Score:5, Interesting)
It's not racketeering because MS isn't technically committing a crime in order to commit other crimes. Well... sort of... antitrust law is a pretty freaky place and I don't like to think about it too much. =-)
However, from The American Heritage Dictionary via dictionary.com:
I suppose one could say that MS has engaged in extortion of sorts, but since the extortion is in the form of a voluntary license agreement , and not backed up with threat of physical violence (the OEMs always have the "choice" of not licensing Windows), it becomes much harder to prove. That's where the antitrust things come in...
The real problem with this whole issue is that the OEMs have been stuck between a rock and a hard place. On the one hand, they have Microsoft playing both good cop and bad cop: unconscionable licensing terms along with a sweet discount on the OS. On the other hand, they have consumers who are, for whatever reason, convinced that if they don't get Windows on their computer, their computer won't actually work.
I don't know what the solution is. If I did, I'd be a highly paid consultant for several states' attorneys general. Perhaps if Microsoft were just prohibited from connecting their licensing terms or agreements to any other OS (i.e. no penalties to the OEMs for offering another OS...) that it might be a start. Probably not enough, but a start.
Or perhaps if the OEMs were to create an association to negotiate with Microsoft for licensing terms things would improve. They really need a single voice, because MS is too good at divide and conquer. The real problem, however, is that MS is also too good at convincing consumers that they really need Windows because "there's nothing else available."
In this case, Microsoft's goons are the consumers demanding Windows on their PC.
Don't be silly. (Score:3, Funny)
I don't know where you are from but in the United States exclusive contracts are a typical occurence in the business environment. The only thing that makes MSFT's an issue is that after a company has achieved a certain amount of market share it may be unfair for them to have exclusive deals with other vendors because it may effectively shut down the competition.
AFor instance a common example of such exclusive deals is schools, stadia, fast food places and restuarants that only serve soft drinks from a particular vendor (e.g. only Pepsi or Coke products).
However it is up to the courts to decide whether there was anything inappropriate about these OEM deals and if so to come up with a decision. Likening it to racketeering on the other hand is a gross exagerration and implies that you think that MSFT forces its competitors to accede to its demands through violent means. If you know this for a fact I'm sure the courts would love to hear your testimony.
Re:Don't be silly. (Score:3, Funny)
Re:Don't be silly. (Score:3, Funny)
The answer is yes.
Simpsons (Score:3, Funny)
Re:How is this NOT racketeering? (Score:4, Informative)
However, if Beer, Inc had dominated the beer market and sold 95% of all beer, the choice for a pub owner to either sell cheap Beer-Only, or expensive Beer plus a microbrew, then the pub owner would have little choice but to dump the microbrew.
Monopolies are a problem, and get into trouble with the law, only when they use their dominant market power to prevent entry for others into the market. Bud would not have enough market power to violate antitrust law, while Beer, Inc, would.
Why do people keep (Score:4, Funny)
This is why I think there's some kind of mind control going on in the windows OS environment that keeps people from remembering this story. Thats why only alternate OS (Mac Linux etc) users really remember it month to month. Oh well, I guess it gives C-Net something to publish.
Witness the rebirth of ENRON! [lostbrain.com]
tcd004
Re:Why do people keep (Score:4, Insightful)
Re:Why do people keep (Score:3, Insightful)
Re:Why do people keep (Score:3, Interesting)
***
Gateway's move was pretty smart, actually. Microsoft can't do ANYTHING to them or else they will have something else to testify and/or sue about.
If a) MS loses their Trademark suit, and b) the OEMs get a backbone, they could offer Lindows as their next "upgrade" to their computers. The user might not even know that something was going on.
Re:Why do people keep (Score:3)
Funny (Score:3, Insightful)
If you think back to how much MS had to push to get themselves pre-installed onto machines back in the 1980s where they were still fighting tooth and nail against competitive offerings.
Now that Windows is effectively regarded as as much of necessary part of the computer as the motherboard, the shoe's on the other foot regarding their relationship with OEMs.
Reminds me of the lyric from a song by the Police
But now that the shoe IS on the other foot ... (Score:2)
What is funny is that Microsoft doesn't consider themselves a monopoly. They think they have to fight, tooth and nail, to barely hang on to that 90% market share. That's why they think what they did is right
Re:But now that the shoe IS on the other foot ... (Score:2)
they'll continue to do it, illegally abusing their monopoly position, unless forced not to.
I've certainly thought so.
From that perspective, even Judge Jackson's breakup proposal would not have been an effective remedy, merely giving one company 90% of the OS market and the other company 90% of the Office productivty suite software market.
They really need a Standard Oil type breakup into about 8 Baby Bills, each with about 25% market share in one of the two markets, each company ready to claw tooth and nail to increase their market share.
Then you'd see some real movement in price, quality and innovation in the basic products. It's been too long that the Windows and Office have been mis-used as lock-in and leveraging tools for conquering other markets.
Tell me again about *consumer* choice? (Score:4, Interesting)
It's pretty plain that consumers have *never* been offered a choice. No "market" for PC OSes ever existed.
Microsoft wants product endorsement (Score:3, Insightful)
Re:Microsoft wants product endorsement (Score:2)
A Britney Coke commercial:
Britneeeeee: Ah!
'Hit me baby, one more time!"
graspee
oops, my bad. try this... (Score:2)
"If you saw a Britney Pepsi commercial followed by a Britney Coke commerical..."
A Britney Coke commercial:
Britneeeeee: *SNNNNNIIIIFFFFF!* Ah!
*pause, drumbeat drumbeat drumbeat*
"Hit me baby, one more time!"
graspee
Re:Microsoft wants product endorsement (Score:2)
Hell yeah! Now that you mention it, I think we should get to see Britney in EVERY commercial.
Oh wait, you meant effective at advertising. Yeah - I guess you're right.
Re:Microsoft wants product endorsement (Score:4, Interesting)
Does your grocery store endorse Pepsi when they sell Pepsi? Do you find that their "endorsement" has less meaning when they also sell Coke in the same aisle?
I guess I don't see the "endorsement" angle here - retailers like Gateway or your local grocery store aren't endorsers of anything; they just stock what the public will buy and advertise it all.
Re:Microsoft wants product endorsement (Score:2)
Perhaps Britney would think it was in her best interest after Pepsi made it clear that they'd prevent her ever recording another CD again.
TWW
Move to strike... (Score:5, Funny)
"Uh, your honor? We'd like to delete this testimony since it makes us look guilty. We're really not guilty, so you shouldn't allow anyone to intimate otherwise."
They're pretty dumb if they thought they were going to get away with that. Once has to wonder what will happen to Gateway now... I think MS will take the cow boxes to the slaughterhouse while they still can.
You're COMPLETELY missing the issue... (Score:5, Informative)
Re:You're COMPLETELY missing the issue... (Score:5, Interesting)
In this particular case it's even MORE important. The OEM License that Gateway is commenting about is the "new and improved" license that has been created by MS to comply with the DoJ's proposed settlement. This goes directly towards proving how inneffective the proposed settlement is.
If the actual license is how it has been portrayed and this is the new license to meet the DoJ's criteria, then I think it goes quite far in proving that the settlement doesn't do anything. In fact, it seems to make the situation worse. I find it quite amusing that this license seems to reinstitute the old per-CPU license by calling it a royalty.
Kind of ironic (Score:5, Insightful)
More seriously, this is an example as to why virtually all PC-only vendors are screwed in the long run (and why I won't buy Dell stock, no matter how well they do). Everybody in the PC industry builds commodity hardware, running an OS they don't control, and tries to compete based on marketing and lowest-cost production. Thanks to things like Microsoft's OEM contracts, there's just no room to go anywhere else. Dell's success is strictly based on execution and volume - they bring nothing else to the table, really. Same with Gateway, and all the other commodity vendors.
So if the MS monopoly is ever broken, it'll be at the hands of companies that have an investment in their own technology, and their own R&D. Perhaps companies that have access to non-Wintel technology (Compaq/HP, though they killed Alpha, IBM, Apple) will be able to take a stab at it. Right now, though, nobody but Microsoft really matters in the desktop supply chain.
Re:Kind of ironic (Score:3, Interesting)
Unfortunately (or fortunately, if you're Dell), only one company of any type can be on the FastTrack program. so, if you're buying a desktop for your employees,you buy Dell because it's easy. The program lasts 2 or 3 years, I think.
So long as Dell retains their FastTrack status, they're set.
Re:Kind of ironic (Score:3, Insightful)
I'd say that Microsoft has built one of the strongest brands in the world, mostly by applying clever and well-branded systems integration (a fact the head of Microsoft research makes no bones about in a recent article in the Economist [economist.com]. Short of drastic legislation (which we just are not going to see under this administration), the only thing that would knock MS out of the catbird seat would be weakening of the brand. (one thing that would probably weaken the brand is interoperability and hence less distinguishability between Windows and Linux). What's surprising is that people don't seem to care about brand when it comes to PDAs and embedded devices, but they sure do on the desktop (after all, people spend a lot of money to BUY new versions of Windows, over and over).
There's an object lesson to be learned about tech branding as attention shifts from the OS to the embedded devices and web services, and perhaps us Linux-zealots should be clever enough to try to learn from it.
I thought this.... (Score:3, Insightful)
Hell, maybe Gateway is realizing how much a pit Microsoft is when it comes to money. Or maybe it's MS's new contracting agreements ( if no upgrade within 1 year after new product comes out, owe full price).
It seems that MS is loosing its edge when it comes to controlling corporate powers. For the longest time, MS has made a standard (maybe not the best, but better than 10 types of hardware on 20 OS'es). We just have outgrown them.
Re:I thought this.... (Score:3, Informative)
Contracts are enforced by the courts. (If MS breaks the contract illegally, Gateway goes to the courts to get them enforced. Same if Gateway breaks, and MS wants their contract-specified fine.)
Because of this, the courts can say "testify" and Gateway doesn't have a choice. Of course, MS can (and did) ask to have secret data (the exact pricing tree) hidden, and the courts can agree to keep it "off the public record", but it still can come out into the open.
IANAL, of course.
Moany old Gateway... (Score:4, Interesting)
any bonuses.
This would make the OEMs less able to compete, price-wise with their fellow scum-sucking OEMs.
Well, boo hoo, why should I care what happens to these unscrupulous box-shifters?
Look at the facts: extended warranties of doom, badly-configured machines with the wrong drivers installed, corners cut to keep the price down (Tom's did a thing on OEMs recently, pointing out that they like to push the main specs like Pentium 4 1.8!!!! And then not mention the crappy $15 video card etc., which is true), help-lines that don't even when you get through to them, incompetence on all levels....
Plus, just think- these OEMs aren't doing anything to earn their money- just employing people very little money to assemble pcs, man help-lines etc.
I know I am going to get modded down as -1 flamebait for this because The Common Man moderates, but seriously, to paraphrase Monty Python: "What have the OEMs ever done for us?"
graspee
Re:Moany old Gateway... (Score:2)
With the current MS Liscensing Scheme, any OEM that sells a PC must give money to MS, and must have MS OS or they lose MS's special prices.
OEMs SUCK. I totaly agree, but the market will dictate who will survive. Right now they are all realling because it now takes effort to sell PC's. from 96 to 2000, everybody wanted on, very few people had one, now thats changed.
I think the OEMs should be allowed to compete on all levels so the market can decide what it wants.
"Plus, just think- these OEMs aren't doing anything to earn their money- just employing people very little money to assemble pcs, man help-lines etc."
by your own statement, they are doing something. You think help desks, shipping, advertising, and assembly is free?
I put my own box together, and recommend the larger local "mom and pops" to people.
Re:Moany old Gateway... (Score:4, Interesting)
There's at least one other thing we can blame on Microsoft as well. How about those "Restore CDs" that coincidentally will blow away any other OS partition that is on a machine? Ostensibly, it is because Microsoft is worried about piracy. Yeah, right.
Re:Moany old Gateway... (Score:4, Interesting)
Because at the end of the day, you wont get anything better until there's no monopoly. Obviously it's impossible for the OEM's to do anything but sell crap because there's no room in the market for competition on anything but price. You can't bundle different software, you can't enhance anything on the hardware side that isn't part of the MS plan. In effect you are competting with other OEM's on the same level and MS gets to say who wins and loses because the only thing you look at is price.
Take the yoke off these "unscrupulous box-shifters" and watch them start competting on things other than price... like innovation, service, etc.
And what about VA? (Score:5, Insightful)
So why did VA stop selling Linux systems? Alleged Microsoft pressure on mainstream vendors not to sell Linux should only have made things better for VA, assuming there really was a market for Linux desktops. But the fact is that there is no serious market for Linux desktops.
While we're at it, I simply don't believe that IBM could be subject to such pressure, and yet they too have pretty much abandoned the Linux desktop and notebook business. You used to be able to find Thinkpads for sale on IBM's site with Linux on them, but not anymore. Does anyone seriously believe IBM talked them out of this? Isn't the Occam's Razor answer that they weren't selling?
Re:And what about VA? (Score:3, Interesting)
Re:And what about VA? (Score:5, Interesting)
Because VA had to compete against price-leader Dell and others selling systems with Linux loaded on them. It's possible that MS only tolerated Dell selling Linux as long as VA was still out there.
This [theregister.co.uk] article is interesting in this regard. And I quote:
So, at one time, it was OK with Microsoft for the OEMs to meet demand, but not to push Linux. Then, later, they clearly pressured Gateway and Dell to drop it completely.
VA Linux no longer out there pushing Linux? Another highly visible Linux company down...
Re:And what about VA? (Score:2, Insightful)
This seems to be standard Microsoft practice. (Score:5, Informative)
Gaming to get off of windows (Score:2, Interesting)
How many times have you seen the latest, hottest most awesome game ever and then notice that the MS version is available but the Mac and Linux version is 2 to 3 months away(or not available at all)?
Now how many people out there actually wait for that linux version vs. loading it onto your windows partition.
Now imagine that Duke Nukem forever or Diablo 4 were coming out. But wait, only the linux version is available just now (shipping with a trimed down distro of course) but don't worry the MS version will be along in a couple off months.
If you were a game geek would you wait?
Re:Gaming to get off of windows (Score:2)
I guess technically that could be true, but you might as well say that people would migrate to Linux if Adobe Photoshop 8 came out in Linux first. Why in the world would this happen? Is there even a point to imagining scenarios like these?
mark
The settlement should require PCs w/o a MS OS (Score:3, Informative)
Re:The settlement should require PCs w/o a MS OS (Score:2)
Sure, there are companies like AccessMicro/McGlen or mwave.com that will happily build whatever box you want with no OS. They've been doing it a long time and if that's what you want, they'll do all the legwork for you.
Why do I get the distinct impression that people just like to complain?
Re:The settlement should require PCs w/o a MS OS (Score:2)
Well I'll be (Score:2)
Their own fault (Score:5, Insightful)
You really have to think about how things came to be this bad. Way back in the old 3.x days, if MS would have tried to pull something like this in the licensing, the OEM's would have told them to take a flying leap and installed OS2. So of course they gave the OEM's licenses dirt cheap, and probably a whole bunch of other things to get them to install Windows by default.
Ever heard of looking a gift horse in the mouth? Did these OEM's think Microsoft was doing this out of the goodness of their hearts? Of course not, they didn't think about it at all. All they saw was the bottom line.
Fast forward 5 years when the entire country is hooked up to Windows for life support, in part, I might add, to the OEM's willingness to throw Windows out there with every computer simply because they were getting a hell of a deal. Now they can't tell MS to take a flying leap, so of course MS is there to "restructure" the licensing deals. But is this MS's fault, or is it the fault of the OEM's for being greedy, and getting burned by it. Depends on your philosophy on life I guess: Is it the drug dealer's fault for selling crack, or is it the addicts fault for trying it?
Re:Their own fault (Score:2)
Well not the whole country. I only use windows at work and maybe one a month at home. Linux and BSD are great alternatives to those who can live withouth Office.
What I find a real shame is that instead of complaining about having to ship with windows, they should try shipping with both Linux or BSD and windows. Then they will be giving the users a real opportunity to choose.
One of the reasons that BE failed was that it did not have a big enough company behind it that sold preinstalled be systems. Dell and gateway used to sell Linux on their computers, and I think Dell still does on servers, but to many people are hooked to office and NOT windows. This is why I really think that if Mac were to port carbon and cocoa dn its gui to intel and compete with M$ on PC hardware it would be a true alternative to Windows that many would probably switch to. Assuming M$ would develop office on OS X.
Re:Their own fault (Score:2, Insightful)
It's not the OEMs who aren't giving users the opportunity to choose. They would love to sell more PCs by selling to folks who want FreeBSD and Linux and OpenBSD and BeOS preloaded. That's a competitive differentiator and they'd love to have that kind of offering. Their hands are completely tied by Microsoft as to what they can put on the PCs they sell. The only option they have is to drop Windows entirely and ship ONLY Be, Linux, or FreeBSD, and you can ask VA Linux, I mean, VA Software Corporation, how well that worked.
Re:Their own fault (Score:3, Informative)
Microsoft specifically prohibits OEMs from doing this. Dual boot machines are expressly forbidden. If an OEM ships a dual boot machine, it has to be Linux on one partition and BSD on the other (or Be and OS/2, or whatever). Furthermore, selling machines preconfigured with an alternative OS (dual boot or not) is the easiest way to get Microsoft to yank your license.
I don't know how Dell got away with selling Linux machines at the same time it sold Windows boxes. Apparently they've been bitchslapped back into submission.
Anyone who has been following the issue knows that "giving the users a real opportunity to choose" has nothing to do with it. No monopoly here folks, move along. The nation's antitrust laws are no longer enforced with anything more than wrist slaps, because of an ideological fetish for "market based solutions" to everything, along with a blind spot for markets that have been broken by monopolies and cartels. With the Sherman Act out of the way, Microsoft's next problem will be the RICO laws. I can only assume these will be adjusted by law to apply only to individuals and not corporations.
Re:Their own fault (Score:2)
they where doing it in the 3.x days.
It use to be easy to sell computers. now that has gotten tight, there looking for alternative ways to sell there PCs, and that means they need to let the market drive them, that means alternative OS's.
Re:Their own fault (Score:3, Informative)
This is not the type of business behavior that should allowed when a company holds a monopoly over an industry. And the FED/9 states agreement doesn't address these serious issues that are still remaining.. At least 9 AG still have some common since.
Re:Their own fault (Score:4, Interesting)
No, this is incorrect. If you remember, the current anti-trust trial was preceeded by the DoJ trying to enforce a 1994 consent decree. This consent decree was created because Microsoft was using illegal tactics to compete against OS/2 in "the old 3.x days".
Is it the drug dealer's fault for selling crack, or is it the addicts fault for trying it?
Bad analogy. Everyone is better off with a standard OS ABI (be it a de facto standard, like DOS/Windows, or a de jure standard like POSIX). There wasn't really a standard microcomputer ABI in the early 80's. CP/M came close, but the biggest microcomputer vendors (Apple, Commodore, Atari) didn't support it as standard equipment. DOS (and then Windows) arose because people needed a standard ABI. It isn't the OEM's fault that the owner of the standard is willing to break the law to protect their profits.
(NB: because there are people who always complain when I call "Windows" a standard: please note the different between an "open standard" and a "standard" and also the difference between a "de jure" standard and a "de facto" standard).
Poor OEMs (Score:2, Interesting)
The real problem is that these OEMs are on one hand complaining about Microsoft's power in the marketplace, but on the other hand (the one with the wallet), they are helping further entrench Windows in the marketplace by complying with Microsoft's abusive licensing restrictions, just so that they won't have to take a short-term risk. Nobody seems willing to take risks anymore, but everyone seems willing to run to the government when Microsoft chooses to shift its bulk around in ways they dislike.
I can't really feel any sympathy for Gateway, or any other OEM with issues with MS' license. They've had every opportunity to try and work it out privately with MS, or barring that, to drop MS entirely, but they won't because they rely on MS (or believe that they do) to sell machines. So that's a decision they've made on their own. Gateway's market share is close to 10% - Apple has made do with less than that without Microsoft, so why can't Gateway break away from the herd (pun intended) and wield that market share and customer base they've been nurturing, if they're so dissatisfied?
It's a utility. (Score:5, Insightful)
Microsoft is a monopoly just like the others, and to most businesses, Windows is as essential as power or telephone service. Microsoft should not be allowed to withhold Windows from them or vary the price based on how much they subjugate themselves.
(Volume licenses are okay, though)
Re:It's a utility. (Score:2)
For all the comments that appear on /. about M$ - good, bad, or indifferent, this is precisely the point M$ has been trying to hide by claiming innovation, or whatever. It's not illegal to be a monopoly, but it *is* illegal to use your power once you are a monopoly to crush others.
You're being simplistic (Score:4, Informative)
One is a monopoly that was granted by government fiat. A natural consequence of that is that the government has the authority to regulate it and impose restrictions. Verizon didn't build its monopoly by building a unique business model or providing unique service. Its monopoly was granted to it by the government.
Microsofts "monopoly", on the other hand was built without government assistance.
You have no way to obtain phone, power or water without the utility (government regulations see to that). You can always obtain an OS without Microsoft.
Also, Microsoft was not cutting off the supply to Gateway. It was not "raising" the prices either. Gateway could always buy Windows at the full retail price at the time of retail availability. There is a cap on the price which is the retail price - a price at which several million people buy the product.
Are you trying to say that because Microsoft has this "monopoly" that it owes the government nothing for, it should be required to offer a discount to Gateway just because it asks for it?
Re:You're being simplistic (Score:5, Insightful)
For most businesses, "an OS" is worthless unless it's an OS that can run their stuff. Microsoft doesn't have a monopoly on the operating system market, they have a monopoly on the "operating systems that can run Win32 applications" market.
Your argument is like saying, "You can always power your business with steam, or hydraulics."
Also, there is no way Gateway could be competitive if they had to pay full retail price for Windows. The profit margins are razor-thin in the OEM business.
So Gateway has two choices: do whatever Microsoft demands or go out of business.
That last part is the crux of my argument; if you reply, you should explain why it's okay that Microsoft can demand whatever they want from OEMs, and the OEMs have no choice but to obey.
Corporate suicide for the cow? (Score:2)
Perhaps Gateway has concluded that they can't compete with Dell, and their plan is to be driven out of business by Microsoft, then sue for $20 billion to distribute to the stockholders?
sPh
Nobody mentioned... (Score:2)
GOD, if nothing else, then this should clearly say to the judge that the settlement is not effective. On the contrary. It gives Microsoft easy way out of too benevolent contracts.
So what exactly is Microsoft guilty of? (Score:2)
Re:So what exactly is Microsoft guilty of? (Score:2)
It has to do with how MS is wielding there monopoly.
Re:So what exactly is Microsoft guilty of? (Score:4, Informative)
What Gateway is testifying to is that it's not fair for Microsoft to impose a blanket restriction upon them (via their OEM license agreement that allows them the ability to sell Microsoft products) which prevents them from selling other alternative operating systems at the same time that they are selling Windows. Such a tactic is an unfair leveraging on the behalf of a monopoly. It's legal for Coca-Cola to do it, for example, because there is a definite alternative - Pepsi. Neither are a monopoly. It isn't legal for Microsoft to do it (allegedly) because of (and due to) their monopoly status. Free choice would mean that an OEM could decide for itself how it wanted to sell its products. When a company MUST have a business model that limits that freedom ("don't sell linux systems or we'll effectively revoke your ability to compete in the current market, which we can do because of our monopolization of said market"), something is wrong.
Control of choke points ... (Score:2, Insightful)
It will be interesting to see how Intel attempts to wriggle more negotiating space with the alternatives of Linux, HP Unix coming on-line.
LL
Gateway's on the ropes (Score:2)
It happens all around you (Score:4, Insightful)
Re:It happens all around you (Score:4, Insightful)
Re:It happens all around you (Score:3, Insightful)
Whch isn't a replacement for an operating system. If they try to give you Linux or BeOS, that's a different story.
TheFrood
Chat transcript from Gateway - Jan 02, 2002 (Score:3, Informative)
Topic: Customizing A New Notebook
Me: Can I have Windows XP removed before shipping?
Carson: hi. welcome to gateway country. my name is carson, your esales advisor. may i please have your phone number in case this chat disconnects?
Me: xxx-xxx-xxxx
Carson: thanks. let me check
Carson: which laptop do you want to purchase? and which operating system do you want?
Me: I was considering the Solo 1400se. I'd prefer either Mandrake 8.1 or RedHat 7.2
Carson: i see. we cannot send a laptop w/o an operating system.
Me: Why is that?
Carson: licensing agreement.
Me: With who?
Carson: microsoft
Me: What are my options then - I take it Linux is not an option?
Carson: correct. we can load xp, win2000, or 98.
Carson: ok. you're welcome. thank you. bye.
Carson: | eSales Advisor | 1-800-846-2036 x55238
carson.kotay@gateway.com | 11410671:6051783
I knew the answer, but I wanted to see it in writing from a rep.
I've always wondered... (Score:3, Interesting)
Suppose that, OK, Gateway computers HAVE to have Windows, because Gateway must follow the Way of Gates. But what's to stop Gateway from spinning off a tiny company called "Freeway, a subsidiary of Gateway" or whatever, and have *that* company sell all the non-M$ OSes they want? So M$ strips Freeway of any license to bundle M$ software. Freeway thumbs its nose and says, "So what?" Meanwhile, Gateway mocks sympathy for M$ and says, "You know, I really do wish we could better control those rogues down at Freeway. But our organization just doesn't have that level of control over our subsidiaries."
Why couldn't this work?
Call Gateway and ask for a Linux PC (Score:3, Insightful)
Call Gateway Sales
Home or Home Office 800.846.4208
Para Información sobre
"Oficina en Casa" 888.299.7512
Any Size Business 800.846.5211
Education 800.211.4952
State/Local Government 800.211.4952
Federal Government 800.216.2940
International Sales 605.232.2191
Remanufactured PCs 800.846.3614
Add-On Sales 800.846.2080
Cut the Gordian Knot! (Score:4, Insightful)
OEMs would be free to sell machines with other operating systems, or none at all. Consumers would be required to buy Windows separately and install it themselves should they prefer that to whatever non-Microsoft OS the OEM preinstalled. This would also halt the other trend that MS and the OEMs are promoting - a lack of recovery disks.
I think you'd see the following happen: Apple would immediately release an Intel version of OSX, since the business suddenly becomes interesting to them. RedHat, Mandrake, Lindows, and other as-yet unformed companies could raise the capital to make consumer friendly versions of their offerings.
If you really want to get Draconian, use Microsoft's own arguments against them. They claimed that Netscape still had full access to the market via Internet downloads - so force them to offer Windows exclusively in the same manner.
Proof that the "settlement" isn't enough (Score:3, Insightful)
You can't refuse to sell black people food at publicly owned restaurants.
Why should MS be allowed to PENALIZE companies for selling other OS'? Or for not selling ridiculously high quantities of MS products.
This is just a method by which MS can unfairly maintain its monopoly, put itself ABOVE capitalistic competition.
I don't see why people defend MS so much. Whatever you think of their products, whatever you think of whether or not they got to their present position by merit or fraud...they're still a monopoly. Monopolies are inherently not good. They are everything capitalism opposes.
Even if MS were to play perfectly fair -- no crooked deals, no blackballing, no spurious lawsuit threats -- it still wouldn't be good enough. They would still hinder competition and deny consumers choice, if only by default.. Because they're so large, its impossible competing against them effectively; they can outspend you a million to one. Because they own so much of the desktop industry, few hardware or software developers offer software/driver versions for non-MS products.
Let me put it to you this way. Lets just assume Gates was a saint, freakin' mother teresa, a Stallman on wheels. That still doesn't mean we should tolerate his current power. No matter how good the man, you wouldn't want to have a person be dictator of the United States, would you?
Its the same thing with MS.
Power corrupts. Absolute power corrupts absolutely.
Re:OEM punishment for testifying? (Score:2, Funny)
If you testify against MS, their henchmen will cut your hair Bill Gates stylee.
Re:OEM punishment for testifying? (Score:4, Funny)
Re:OEM punishment for testifying? (Score:2)
That means that there computer would be at least 100 dollars more expensive then there competitor.
Thats enough to kill a computer company.
I have know about this for quite some time. I have always thought the major OEMS should get together, tell MS to shove it, and turn i into an AD campaign.
You see a bunch of CEOs from competitive companyies talking about how they want to give the consumer a choice and the only way to do that was to raise there prices because MS won't give deals to computer companies that allow the consumers to have a choice on how they spen there money."
The wouldn't run a week befor MS changed there ways.
Gateway buyout (Score:2, Funny)
billg: "Buy him out, Boys!"
[thugs trash Homer's house]
billg: "I didn't get to be the richest guy in the world by writing a bunch of checks!"
Re:It seems... (Score:4, Insightful)
Of course not. As a practical matter it's impossible for the big OEMs to survive without offering Windows, and Microsoft is taking advantage of that. Might that have something to do with the fact that Microsoft is a monopoly and they're using their monopoly power to illegally restrict the market for operating systems? I seem to remember that there was a lawsuit about that.
Re:Microsoft is not out of line.. (Score:3, Insightful)
Re:Microsoft is not out of line.. (Score:2)
I don't know, could you point to another company that does this, checking up to make sure they aren't buying other products and then penalize for it?
Soft drink manufacturers do a somewhat similar thing all the time. Restaurants, airlines, sports stadiums, you name it, they all get a better price on their Coke or Pepsi products if they sell only one brand.
In the soft drink world, that's not such a significant problem, though, because there is competition. Smaller companies like RC and Shasta may have some grounds to complain that the lock-in keeps them shut out completely, but consumers still come out relatively okay because the competition between the big boys keeps flavored sugar water innovation up and prices down.
Are you (Score:2)
Re:This is why... (Score:2)
Now, M$ never audited any of the mom-n-pops I dealt with, but the threat of an audit was more than enough to keep them in line.
sPh
Re:This is why... (Score:2)
I would think most screwdriver shops would do this...they're already using whatever processor, RAM, HD, etc. you specify, so the logical extension would be that you could specify the OS to be installed. I've bought parts for complete systems at PC Club [pcclub.com] and not had to pay the "MS tax" along with those parts. I've never had them assemble a system (I can do that myself), but I would think they'd build a "naked PC" if you asked.
Re: (Score:3, Funny)