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Microsoft The Almighty Buck

Annual Cost of Microsoft Monopoly: $10 Billion 713

Posted by CmdrTaco
from the that's-a-lotta-license dept.
An anonymous reader writes "Microsoft's deals with major PC vendors lock users out from alternative options, such as Linux. A recent whitepaper calculates that the cost to industry of this Microsoft monopoly is $10 billion per year."
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Annual Cost of Microsoft Monopoly: $10 Billion

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  • by argoff (142580) on Tuesday July 26, 2005 @01:09PM (#13166882)

    If you look at copyrights as a microregulatory controll on how people use information, and not a free market property right like mindless mob would have you believe. Then it becomes clear that the real harm comes from that poor belief system, and all the rest is just a natural consequence of it being brought to it's logical conclusion.
  • by chia_monkey (593501) on Tuesday July 26, 2005 @01:10PM (#13166893) Journal
    Sadly, you are very correct. I don't see an end to this monopoly anytime soon. Microsoft seems to be held to a completely different set of standards than other companies. It's either their market dominance that scares people, their deep pockets (which are filling other pockets), or a combination of these and more variables.

    The really sad part about it all is how Apple gets sued for the Tiger name or for "Apple" in cahoots with iTunes. Intel and AMD are going after each other. These are instances of competetition that is allowed to thrive and it's carrying over to the courts. Then you've got Microsoft getting pissy at Google and suing because Google is getting an ex-Microsoft employee (rumor has it, they're getting quite a few employees actually). And then you've got this monopoly business. This current administration in office doesn't care about Microsoft's anti-competitive practices. Microsoft has to get slapped pretty damn hard to stop...and I just don't think that will happen anytime soon.
  • MS Tax vs MS Profits (Score:3, Interesting)

    by Dracos (107777) on Tuesday July 26, 2005 @01:15PM (#13166973)

    MS profited $12B this year, and is expected to profit $15B next year. And they make $10B just from being a convicted criminal?

    If only duh-byah hadn't quashed the anti-trust suit.

  • by asscroft (610290) on Tuesday July 26, 2005 @01:17PM (#13167005)
    Not only does MS sell thier OS to OEMs, but you can put together parts and install MS and it will run just fine. Apple restricts their OS to machines they build, and they charge top dollar, and yet they're beloved on /. and MS is the great evil. What's even worse is we know Apple can run on PCs, and their proving that as we speak, and yet, when they switch over, they'll add an evil little chip to make sure your Mobo is one they sold you. How's that for a monopoly?
  • Re:Dropping... (Score:5, Interesting)

    by zxnos (813588) <zxnoss@gmail.com> on Tuesday July 26, 2005 @01:20PM (#13167044)
    or

    3. businesses are not upgrading from windows 2000.

    4. many people find their 8 year old computer working just fine for internet/email/word processing/spreadsheets/tax software.

    5. some other ancedotal excuse.

  • by October_30th (531777) on Tuesday July 26, 2005 @01:22PM (#13167072) Homepage Journal
    High volume (most people will buy the Windows version), smart negotiations and incentives to encourage Dell to keep the FreeDOS price up. Why don't you go and negotiate a better deal with Dell if you think that's unfair pricing.
  • by 99BottlesOfBeerInMyF (813746) on Tuesday July 26, 2005 @01:30PM (#13167184)

    It is called a loss leader.. while illegal in theory it hasn't ever been used to prosecute a business for non-competivite behavior.

    Are you drunk, stupid, or joking? A loss leader? You honestly think MS pays all the computer manufacturers to include Windows on their machines and then makes their revenue selling, office or services or something? It is completely untrue. They sell Windows, but have contracts insuring they get paid for every PC sold, not for every PC with Windows. The extra money is for the expense of putting FreeDoS on the machine. They manage to get this ridiculously favorable deal because as a monopoly they have the power to put any PC seller out of business at their whim. Get a clue.

  • by Boing (111813) on Tuesday July 26, 2005 @01:30PM (#13167186)
    I'm normally not one to point out examples of groupthink in this community. By and large, we have our biases same as every other discussion group that's ever existed.

    But: every time there's a new study on how "piracy costs the music industry N dollars", where N is the estimated number of piracy incidents times the average suggested retail price of the pirated materials, there is universal outrage. "That's fallacious," we cry, "it assumes that every incident of piracy would have otherwise been a retail purchase at full price!". And we are right to make that claim.

    However, here's a study that exercises a similar fallacy, and yet the outrage goes in the other direction. (and yes, I know this doesn't apply to everyone... I'm generalizing).

    We can't assume, if the major vendors decided to stop bundling Windows/Office tomorrow, that any significant number of people would happily explore alternative options and be just as satisfied.

    We can't assume, had Microsoft gone belly-up nine years ago, that people would have been perfectly content to start figuring out monitor sync rates and which filesystems with which to partition and format their hard drives.

    We can't assume that all the unwashed masses would've just gone to Apple; we can't assume they would've been able to afford it; we can't assume Apple's products would've advanced at the rate they have without the pressure of being the "underdog". And since the premise of this "study" (though I am loathe to call it that) is that of the cost of a monopoly, we can't assume Apple (or Linux, or whatever) "winning" the market would've been any better.

    Like it or not, Microsoft's presence and market dominance is an inextricable part of computing history. There is no way of even remotely predicting how the last twenty years would have panned out without it. And despite its grandiose claims, the authors of this article don't even seem to have bothered trying.

  • by BJZQ8 (644168) on Tuesday July 26, 2005 @01:32PM (#13167210) Homepage Journal
    "incentives to ecourage Dell to keep the FreeDOS price up" I believe that's exactly what Microsoft was supposed to be prohibited from doing under the terms of its anti-trust settlement...Then again, you might also say "a huge stick to beat Dell with unless it keeps the FreeDOS price up"
  • Re:Dropping... (Score:3, Interesting)

    by BewireNomali (618969) on Tuesday July 26, 2005 @01:36PM (#13167261)
    I tend to think that Microsoft's greatest advantage is that they don't manufacture hardware.

    Losing market share as a coercive monopoly (http://psychcentral.com/psypsych/Coercive_monopol y [psychcentral.com] ) is inevitable once leveling factors come into play. As there is little natural barrier to entry in the OS business, it's natural that more attractive price points would erode its position as a monopoly.
  • by Daniel_Staal (609844) <DStaal@usa.net> on Tuesday July 26, 2005 @01:39PM (#13167317)
    Probably true... But think about this: You're the IT person for a medium-sized company. You know that Linux is there, and know some stuff about it. You don't use it though.

    Now, Microsoft suddenly decides to make it more labor-intensive to keep your systems up to date: You have to verify the license. It's not much, but it would be enough to make you start looking at Linux a little harder, just after your next update round.

    Maybe you'll switch, maybe you won't, but you are thinking about it. If you do, you now will show every user in the company that Linux works. They had probably never heard of it. Maybe they'll like it. Maybe even take a look at it at home. Even if you don't, you may talk about it with your boss. Who make look at it, if you make a good enough case.

    No one cost in this is enough to force a switch. But every small cost is enough to make switching just that little bit more attractive. And any one switch is one more real-world example, making more switches more likely.

    This is how empires fall. Not all at once, but in pieces...
  • Re:Blame Game (Score:3, Interesting)

    by 99BottlesOfBeerInMyF (813746) on Tuesday July 26, 2005 @01:47PM (#13167413)

    But go ahead and keep blaming Microsoft's business practices... why stop now? It is easier than trying to actually compete for users.

    The article says MS is costing the industry X squandered dollars with their blatantly illegal business practices. The number is probably bunk, but could be in the right ballpark. How does Linux users believing that most people enjoy the experience of using Linux have anything to do with whether or not MS is engaging in illegal business practices?

    Ok Linux sucks, whatever. Even assuming I agree with you, what does your statement have to do with anything? Does it make MS's business practices any less unethical, illegal, or despicable? Does it address the article at all?

  • by cbreaker (561297) on Tuesday July 26, 2005 @01:56PM (#13167550) Journal
    "and is a major factor in why it is so widely pirated."

    I tend to disagree - I think the reason so much software is pirated is because of the retarded prices. $600 for a copy of Office 2003 Pro non-upgrade? $1000+ for the Adobe CS package, or hundreds and hundreds more for each individually? $300 for Windows XP?

    The only mainstream software out there that's resonably priced is games. Sure, $50 might seem like a lot for a single game, but for a game like Half Life 2 - it took those guys a long time and a crap load of development to get it shipped.

    I understand the the audience is different, but really, unless you pirate software you gotta be rich to own anything besides Works, the OS that came on your PC, and some browser.

    Just wait until Microsoft and Friends (TM) go and really lock down their software. It *can* be done fairly effectively if you're shitty about it, like how games are now a days (check out Steam, you'll frigging hate it.) Microsoft isn't going to get nicer, so it's going to happen. Wait 'til I tell my mom that the new printer she got only works with Windows whatever, and it costs $299 for the upgrade.. We'll see people seeking alternatives pretty furiously if and when it happens.

    But that's where "trusted computing" and DRM comes in. Microsoft knows it wants to lock the hell out of your computer, and they know when they do it, it's going to piss off a LOT of people. So, they're doing everything they can to lock free software out before it happens. I dunno, maybe I'm seeing conspiracies here that aren't, but it just seems too obvious to me to dismiss.

  • by Mad_Rain (674268) on Tuesday July 26, 2005 @01:57PM (#13167568) Journal
    Perhaps what you need to do is to review the definition of a monopoly [wikipedia.org].

    Your opinion about Apple controling both the hardware and the software of their computers may be valid (I'm not going to argue or agree with you). But calling them a monopoly shows a lack of understanding of the term. They (Apple) haven't prevented you from choosing a competing product through illegal methods or coercion.
  • by A beautiful mind (821714) on Tuesday July 26, 2005 @02:24PM (#13167952)
    Oh btw, (sorry for replying to my own post, but) the cost of Microsoft's monopoly has to DIRECTLY include the costs of all mass scale virus, spam, or any other security issues. That is simple maths.

    Let's say, in order a virus to spread, it needs an environment to live in, which is given by Microsoft because they are a monopoly, systems have the same code (windows).

    If a virus would manage to infect 10-15% of the systems worldwide and crash them down or make them otherwise impossible to use in a relatively short time, that would be an economical disaster, in the sense of closing the stock market and throwing the key into the ocean because it's useless in the future anyway.

    In order a virus to spread, it needs a platform: a vulnerable version of an operating system with a high enough marketshare. 90% is bad, so its anything between 40%-100%. However, if you manage to split the market into shares smaller than 40% each, you basically prevented the mass virus infections. They just can't spread effectively, so this means, if you have 10 INSECURE operating systems, it doesn't matter, the virus still won't spread effectively. This is the case, when one quite good OS would be worse than 10 BAD, but as we know we don't even have one good operating system with a high enough marketshare, although linux is gaining.

    The risk is there in today's world, waiting for a smart virus writer to write a good virus and that could collapse economies. We are ALMOST in that state, thanks to the monopoly.

    If we would have 10 different operating systems owning the OS market in around equal percentages, then it would mean we would be forced to use open standards in communicating between those systems, which is a good and certainly possible thing, so it's not quite true that by having a heterogenous system we cannot work together efficiently. It would only mean that the virus/malware risk is basically solved, and that would indirectly solve other problems caused by infected windows pcs.

    It costs us a heck of a lot money to have a monopoly, it is a bad thing in all cases. How long do you think humanity would have survived if we would be much more similar to each other? One illness would have wiped out our whole species already.
  • by be-fan (61476) on Tuesday July 26, 2005 @02:41PM (#13168162)
    Your #4 is incorrect, and has been for about 50 years now. The "unseen hand" is a useful analogy, but its not entirely consistent with modern economic theory. Read up on anything written in the last 50 years regarding monopolies, and you'll learn that they can exist naturally, and indeed the government, by virtue of its coercive ability, is often the only way to break them. The remainder of your post, derived from this flawed premise, should thus be disregarded.

    Oh, and FYI, professors are leftist because they actually study the world. I find it incredible that most people wouldn't ride in an airplane built by a layman, but are perfectly willing to listen to economic theory espoused by people unqualified to do so.
  • by dindi (78034) on Tuesday July 26, 2005 @03:01PM (#13168437) Homepage
    When I bought my toshiba laptop in Costa Rica they did not only refuse to sell me the laptop without Windows XP, they weren't even willing to give at least with an English version ....

    OK, so with PCs at least you get a normal version, but laptop versions do not install anywhere else other than the laptop ... so great I had to get a pirated version of XP for my desktop PC (do not even ask why I need it) because I refuse to pay again for the same thing I did not want to buy the first place, but if they at least gave me a normal English version not a Crippled only toshiba Spanish, I could have simply used the licence I ALREADY PAID FOR ....

    I hate microsoft for that crap, and hate all retailers who force me to buy a copy with every laptop I buy ...

    I do not need WINDOWS on my laptop please do not let me pay for it :(

    PCs I just build from pieces and not by OP system (Linux/BSD would be used anyway)

  • by phkamp (524380) on Tuesday July 26, 2005 @03:14PM (#13168596) Homepage
    Has it never struck you as a very obvious explanation that Microsoft could have people paid to spin their case on Slashdot ?

    With a marketing budget of their size, I'd be surprised if they didn't drip some greenbacks into hands that would spend time defending their reputation online.

    And no, I don't think Slashdot is the only place they have paid staff doing astroturf.

  • by herriojr (792305) on Tuesday July 26, 2005 @03:23PM (#13168695)
    This is my first post ever, so here it goes. I have a lot of friends who know very little about computers, yet have one (of course!). Probably the biggest issue is that when asked about operating systems, most really don't know about anything but Windows. A few of them are starting to find out about OS X, and they think it looks neat and actually debate on whether to buy it. Some decide against it because they find out the new game they want isn't made for OS X, others think it is too expensive (and that can be untrue). I still know lots of people who are making the switch or want to make the switch. Despite the growing number of switchers, Apple needs to work on correcting a lot of the misinformed people out there. Actually, just recently, someone I know told me he didn't like Macs because he tried it at his sister's and he said it sucked. Well, she was running OS 9. In my opinion (and probably a lot of others as well), OS 9 isn't anywhere near OS X. I showed him OS X and now he wants one. The reason people don't know about other operating systems is that they don't see it on TV or in magazines, etc, except for Macs maybe. Macs get placed all over the place in movies now, but a lot of people don't differentiate between computers people are using in movies. I'm assuming that their iPod is probably the biggest marketing tool for their computers. When people walk into Apple stores, they see that they also sell computers and are shown how the user interface is and are told the advantages, etc. In my opinion, Apple is going to be the biggest threat to Microsoft (in the home user market) because they are MARKETING their products. I've never seen a Linux commercial, so very few non-computer people even know about it. Maybe if people saw it on TV (basically if they are informed) and were told all the advantages (It's FREE! or pretty close to it if you buy the CDs), they would be more likely to buy it (and hopefully their install process works fine otherwise they will tell other people that they couldn't get it to work). Maybe if Linux were marketed (or better marketed if it already is marketed), it would stand a chance in the home user market. If people don't know their options, there are no options for them. I believe that is why Microsoft has held their monopoly for so long (along with many other factors of course). If you think people should switch to linux, stop telling all the other computer-knowledgeable people about it and start telling the general consumers. I tell a lot of people they should switch to the Mac, and I show them what it's like and let them see how EASY TO USE it is. They usually end up liking it a lot and then know that there EXIST other options besides Windows. Beyond this, I would like to say that Dell and other computer manufacturers should also be held accountable for knowingly contributing to Microsoft's monopoly. Other companies are so willing to help out wrongdoings if they can make a buck without any consequences. There are a lot of changes in the law and how government works that I would like to see changed that would effect such things, but this post is already long enough for my tastes. Anyways, I think that's enough writing. Hopefully some of you find this an interesting (and coherent) thought. I have a tendency to wander off-topic. -Jon
  • by Anonymous Coward on Tuesday July 26, 2005 @03:31PM (#13168824)
    yeah, it is good if you look it the alternatives:

    Windows: It works; easy to install, easy to use, easy to update

    Linux: It sometimes works; install is hell on some of them (gentoo?), it would be waaay to hard for non-technical people to use, installing extra hardware or software features often requires recompiling the kernel, not something an ordinary user wants to do, and the list just goes on...

    Mac: easy to use, expensive as hell

    Unix: see linux

    So yeah, i would buy it. for ordinary consumers, linux is crap...
  • Re:Of Course! (Score:2, Interesting)

    by Nossie (753694) * <IanHarvie@@@4Development...Net> on Tuesday July 26, 2005 @03:49PM (#13169036)
    I have to agree here.... screw those with their MCSEs ... they should have realised that before the government funded them (in the uk atleast)

    It would have been a different scenario if the students in question were actually of any competence. I know of people who have interviewed MCSEs graduates that weren't capable of formatting disks! never mind administering systems.

    In my walk of life... an MCSE can (almost) administer a Microsoft Windows system... a Linux or UNIX qualified admin can work *and script* both UNIX and windows and will still be doing so when the monopolist falls.

    I guess it's quite similar to those that were MCSE qualified in Windows NT. Without going the Microsoft upgrade path to 2k and 2003 those graduates are now obsolete. If said graduate had bothered to get qualified in a generic 'server environment' qualification like a BSe in systems administration 20 years ago that would not have been a problem.

    The same goes for RedHat and Cisco qualifications... although Cisco has became more of an industry standard as far protocols go.. than either RedHat or Microsoft will ever hope to be.

    The point is: defacto standards do not come about because a government or corporation says so.. they last in our industry because they are reliably time and time again deliver the goods in question and don't need patched every day or upgraded every month. If you honestly thought otherwise... you wouldn't have been posting AC.
  • by happyemoticon (543015) on Tuesday July 26, 2005 @03:54PM (#13169099) Homepage

    I agree about the technical support/warrenty: they're absolutely useless. Dell's tech support used to be quite good when I was talking to people in Texas and Florida, but the Indian tech support sucks bottom. I'm not just talking about accents, which are a hinderance; their phone connections are incredibly shitty, and apparently there was some gap in their English education, as they do not respond to the words, "I cannot hear you, you need to speak louder." That's with a modern cell phone turned up all the way - if I use that volume with most people, their voices distort from being amplified that much. However, I am slightly hard of hearing, and I have a tendency to get angry at people for muttering shit at me, rather than just break down and wear a hearing aid. Anyway, every retail guy I've ever known tells me that the warrenties make them money hand over fist: pure profit.

    Not all Dells are that poorly built. I bought a 2.6 GHz Dell about two years ago and was quite impressed at how expandable it was. The internals were good, full of fans. The clamshell design was nice. Installing a new hard drive was a snap. Of course, I have no doubt that your friend's was a piece of shit. The only PCs in my future are AMD-64s (homebuilt) and Apples.

  • by ch-chuck (9622) on Tuesday July 26, 2005 @04:03PM (#13169208) Homepage
    When I bought a Dell Inspiron 8600 last Dec for a project, intending to use Linux on it, there was no option for "no OS" so I had to buy Windows, which was immediatly wiped off the hard disk, didn't even activate it. That was some amount of payment to Msft for absolutely nothing, and I think should be viewed as a net loss to an economy as there is no product delivering any 'value' to anybody other than taking my $$$ and giving it to Msft. In fact, that represents money NOT spent on anything else, not at the grocery store, toward a new car, etc. As far as I'm concerned it may as well have been burned.

  • by be-fan (61476) on Tuesday July 26, 2005 @04:13PM (#13169324)
    THe OJ and Nicole example, or the Michael Jackson example involves things that may or may not have happened, and there is no way to know what really occurred. In contrast, whether Microsoft is a monopoly involves no such uncertainty. The courts get to decide who is and is not a monopoly. According to the courts, Microsoft is a monopoly. Now, you could say that this judgement is wrong, and that Microsoft's should not be labeled a monopoly, but that does not change the fact that, currently, as a result of previous court decisions, it is labeled a monopoly.
  • by arkanes (521690) <.arkanes. .at. .gmail.com.> on Tuesday July 26, 2005 @04:15PM (#13169348) Homepage
    I hear this reasoning a lot too, and I find it possible but extremely implausible. Dell creates and tests *lots* of OS images. They sell lots of (different) OS images. I find it difficult indeed to justify that a FreeDOS image is that different than any of the number of different Windows images they ship.
  • Re:Of Course! (Score:1, Interesting)

    by Anonymous Coward on Tuesday July 26, 2005 @05:14PM (#13170152)
    I run proprietary software under Linux without WINE. Believe it or not, you can buy proprietary software compiled for Linux too. Today.

    Now - I'll prefer Open Source software. So when I go with something proprietary, it should really shine. But then - isn't that a part of doing business in the marketplace?
  • by NatteringNabob (829042) on Tuesday July 26, 2005 @06:44PM (#13171120)
    >Which version of linux? if its RH Enterprise then the price is acceptable. It is the Linux installer kit, which is essentially no version of Linux. On re-reading the specs, I notice that these are actually single Opteron machines and the Linuc version offers 1GB more memory (cost, about $130) and an extran 80GB disk (cost, around $100). Tha makes up about $230 of the $300 differential, but the real question is 'why can't I buy the *exact same* HP workstation products w/o Windows?' If you look at IBM's website, they play the same games. And as somebody else pointed out, so does Dell. I have to figure that it costs these vendors more moeny to produce machines that have just slightly different configurations, but one configuration (the cheaper one) only comes with windows, and the other, moer expensive one, only comes with Linux. I'm guessing that somebody made it worth their while to go to that extra trouble, and it wasn't Red Hat.

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