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Linux Spurs MS Price Cuts 480

jimb writes "Yahoo! reports: 'What's happening is that Microsoft sales reps have been instructed to be on the lookout for any businesses that are migrating some of their machines to the Lindows OS,' Yankee Group analyst Laura DiDio told NewsFactor. 'If [the sales reps] think there's a real threat of some pretty large numbers of defections to open source, they can request authorization from Microsoft higher-ups to offer steeply discounted pricing."' I wonder how many businesses will now start pondering aloud the possibility ... I'm sure OS X is on MS's mind as well.
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Linux Spurs MS Price Cuts

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  • by newt ( 3978 ) on Wednesday November 27, 2002 @05:23PM (#4770372) Homepage
    Isn't selective discounting against the MS antitrust settlement?

    - mark
    • by Blindman ( 36862 ) on Wednesday November 27, 2002 @05:25PM (#4770405) Journal
      It couldn't possibly be. Microsoft never breaks the rules, so you must have heard wrong.

      • by AndroidCat ( 229562 ) on Wednesday November 27, 2002 @05:35PM (#4770509) Homepage
        DiDio said that in some cases, the discounts could be as high as 50 percent.

        The article has it wrong. Microsoft normally slaps a 100% gouging charge on top of the real price. For especially good customers, they sometimes remove it for no reason, resulting in a 50% reduction. This has nothing to do with Linux. Nothing to see. Move along...

    • <sarcasm>Obviously, they are looking for opportunities to offer steep discounts to everyone!</sarcasm>
    • It's probably a discount, or a rebate. You know, your site licence for 100 computers costs 240,000 dollars. Now, we have a special promotion that's 50% off. Or, you get a good customer discount. Or something.
    • I dunno, but I'm sure there'll be plenty of businesses out there throwing in a couple BS copies of Linux simply to spur some discounts ;)
      • by AndroidCat ( 229562 ) on Wednesday November 27, 2002 @05:48PM (#4770631) Homepage
        That could fun to eavesdrop on: The company suits trying to act like they're gungho for Linux, and the Microsoft Salesdrones trying to test for smoke and mirrors.

        "So, ah, (checks list) which booter are you using, Lilo?"
        "Ah sure, uh and Stich, of course."
        "Yes, version er 2.7 of course, very solid..."
        "Right ah umm.."

        That sort of Battle of the Titans could go on for hours.

      • You would be surprised at how much most CIO's are afraid of MS. Some of them actually hide the linux servers so that the MS reps won't see them. I really don't know what they are afraid of but they are definately afraid of MS.
    • I recall correctly (and I'm probably slightly off base here) they couldn't selectively charge different OEMs different rates (ie, they couldn't alter the 'MS tax' just to get them more OEM deals) .. but I'm not sure about end user software.
    • by Rareul ( 537940 ) <rareul@oldschool ... .com minus physi> on Wednesday November 27, 2002 @05:52PM (#4770687) Homepage
      From the Good ol' DOJ [usdoj.gov]

      B. Microsoft's provision of Windows Operating System Products to Covered OEMs shall be pursuant to uniform license agreements with uniform terms and conditions. Without limiting the foregoing, Microsoft shall charge each Covered OEM the applicable royalty for Windows Operating System Products as set forth on a schedule, to be established by Microsoft and published on a web site accessible to the Plaintiffs and all Covered OEMs, that provides for uniform royalties for Windows Operating System Products, except that:

      1. the schedule may specify different royalties for different language versions;

      2. the schedule may specify reasonable volume discounts based upon the actual volume of licenses of any Windows Operating System Product or any group of such products; and

      3. the schedule may include market development allowances, programs, or other discounts in connection with Windows Operating System Products, provided that:
        1. such discounts are offered and available uniformly to all Covered OEMs, except that Microsoft may establish one uniform discount schedule for the ten largest Covered OEMs and a second uniform discount schedule for the eleventh through twentieth largest Covered OEMs, where the size of the OEM is measured by volume of licenses;

        2. such discounts are based on objective, verifiable criteria that shall be applied and enforced on a uniform basis for all Covered OEMs; and

        3. such discounts or their award shall not be based on or impose any criterion or requirement that is otherwise inconsistent with any portion of this Final Judgment.
      • by r2ravens ( 22773 ) on Wednesday November 27, 2002 @07:25PM (#4771391)
        ...Microsoft shall charge each Covered OEM the applicable royalty for Windows Operating System Products as set forth on a schedule, to be established by Microsoft and published on a web site accessible to the Plaintiffs...

        The Plaintiffs were the USDOJ. I am a US citizen and they were acting on my behalf, therefore I am a plaintiff. I want to see the price schedule.

        Any lawyers out there looking for a challenge?

    • by spacefrog ( 313816 ) on Wednesday November 27, 2002 @05:55PM (#4770718)
      The selective pricing rules concern OEM's, not corporate licenses.
  • by Anonymous Coward on Wednesday November 27, 2002 @05:25PM (#4770401)
    Linux distributors announced today that prices for Linux would be 100% off, bringing the cost down from $0 to $0. "This is an amazing move in order to compete!" said one anonymous coward on Slashdot.org.
    • Wouldn't that be a 0% price cut? They do sell (and charge quite a bit for) pressed copies of Redhat, Suse, etc. I am on a modem currently, so if I needed a new version of Redhat for my linux box, I would be forced to go buy it (and pay quite a bit for free software).

      Wait, so all I have to do is tell my Microsoft sales rep that I am thinking about switching to Lindows, and I'll get a 50% price cut? Yay! Windows XP for $50. And Office XP for, umm, $250!!
      • Well, technically, %off = ABS[(old-new)/(old)]*100, so since the old price is zero, you have a NAN exception and the result is undefined, so in a sense you can define it to be whatever you want.

        However, the marketing department has an easier time with things if you use round numbers.
    • by Beliskner ( 566513 ) on Wednesday November 27, 2002 @05:46PM (#4770610) Homepage
      Inspired by Star Wars II : Attack of the Clones, and in true linux fashion, 26 different distros of Lindows have appeared in conjunction with 6 different Windows Managers:

      Vindows (Indian Versions)

      Rumours of AAindows and ABindows are surfacing. Windows anagers:

      KDE, Gnome, Insightful Troll, Redundant Insight, Informative Redundant, XX-Windows

  • This is NO surprise. (Score:5, Interesting)

    by smd4985 ( 203677 ) on Wednesday November 27, 2002 @05:26PM (#4770414) Homepage
    MS will do anything to maintain their monopoly on the desktop OS (as recent numbers have shown, it provides flexibility in OTHER markets), so you can be sure that they won't feel bad about cutting the price of Windows. In fact, as Linux becomes more attractive, there will be more pressure to drop the price to 0 (zero). Any other price and they stand to lose their monopoly, which is worth more than a few measly bucks per computer sold....
    • by MrEd ( 60684 ) <tonedogNO@SPAMhailmail.net> on Wednesday November 27, 2002 @05:29PM (#4770457)
      which is worth more than a few measly bucks per computer sold....

      Don't forget the MS balance sheet that was released a month or so ago - it showed their leading source of revenue was Windows, followed by Office. Everything else was negligible or lost money.

      A prime example of why their monopoly is so important, subsidising and providing a vehicle for all their other projects, but it also shows how important that revenue stream is! Making Windows free beer would leave them only Office to make their money. Investors no like.

      • Given the popularity of OpenOffice, and the up and coming KDE officeware project, where does microsoft stand to make any money? Giving windows away is not a solution for microsoft. They have to start making non-duplicable applications for windows if they want to continue making money off of it.
        • Given the popularity of OpenOffice, and the up and coming KDE officeware project, where does microsoft stand to make any money?

          By making a better office suite.

          Openoffice has a long way to go before I, or my employer, or my employer's organization, or anyone my employer deals with can seriously consider it.

          Given the right circumstnace, MS would "give windows away." Think about it: a 100% DRM media box, with a contractual deal that you pay $1 per file (or even $0.10 per file) that you add into the box...

          Yeah, I could see them giving windows away.
      • by rseuhs ( 322520 ) on Wednesday November 27, 2002 @06:23PM (#4770997)
        Actually I expect their MS Office revenue stream to dry up first.

        Nobody sees a reason to upgrade Office anymore and switching to OpenOffice is a lot easier than switching to Linux altogether.

    • Since many businesses shall be tempted to try to obtain a discount by playing like they're seriously considering Linux. In playing this, some of them might actually consider it the first time and even get charmed by the idea (discounts from MSFT or not).

      Also, the message that MSFT sends with this (now publicly known) policy is that they consider Linux to be an extremely dangerous competitor. This must put some companies to think.
  • My thinking (Score:5, Interesting)

    by greechneb ( 574646 ) on Wednesday November 27, 2002 @05:27PM (#4770421) Journal
    Since I recently heard that microsoft could sell windows for around $45 and make a profit (I think that's right), if they really want to make sure linux doesn't take over, knock the price of windows down. More people would be willing to buy windows xp if it was $50 rather than $200. I know they want to make a big profit, but I think if they got more sales (by discounts on prices) they would have more volume. But what do I know, I'm not a marketing analyst.
    • I still wouldn't buy XP even if it was only $1. DRM + product activation BS + all the undocumented insecurity bugs that I can only rely on them to patch and announce if they find it convenient... Nope, Windows isn't worth a dollar to me.
    • Re:My thinking (Score:5, Informative)

      by NineNine ( 235196 ) on Wednesday November 27, 2002 @06:19PM (#4770950)
      No, they wouldn't have any more volume. People want Windows. People really, really want Windows. There aren't any really, really good alternatives right now, other than OSX, which is overpriced when the proprietary hardware is taken into consideration. MS is charging as much as they can get because that's what businesses do. There's very little switching to alternatives right now, so MS would probably see a net loss in revenue by dropping prices (especially on the desktop pieces).
  • by ekrout ( 139379 ) on Wednesday November 27, 2002 @05:27PM (#4770430) Journal
    I've already converted three business over to a stricly Linux platform on the backend. I converted, in total, 120 servers over to Linux from Windows NT, saving the companies thousands and thousands of dollars in the process.

    No 20, 30, or even 50% discount could have changed the minds of the CTOs for whom I worked. Now, all the mail, Web, etc. servers are running Linux, and these companies are happier than ever.
    • Thank you all for making me the most-loved [slashdot.org] member of Slashdot (376 fans)!

      Uh, you appear to be the most-hated [slashdot.org] too.
    • by ahaning ( 108463 ) on Wednesday November 27, 2002 @10:20PM (#4772240) Homepage Journal
      Not to discount what you said, but I thought this article was about Microsoft trying to keep people from moving to *Lindows* which, AFAIK, is a DESKTOP setup. You patted yourself on the back for replacing Microsoft servers.

      Many people know that Free/opensource software can hack it on the server side, but many (myself included) need convincing that Free/opensource software can hack it BETTER than Windows on the desktop. (I would even say that, rather than just BETTER, it has to be much much better -- enough to make relearning many things worthwhile. Avoiding the occasional reboot is not worth it. Avoiding thousands of dollars of software licenses is not worth it. Avoiding the wrath of the BSA is not worth it. Getting your work done better and faster and making people say "Wow. That's awesome! How'd you do that?" will make it worthwhile.)

      Right now, Microsoft and the software that runs on Windows is hacking it better, thus Microsoft can afford and be expected to do whatever it can (including lowering its prices) to keep their position.
  • The sad thing is... (Score:5, Interesting)

    by 3ryon ( 415000 ) on Wednesday November 27, 2002 @05:28PM (#4770436)
    that business use this tactic all the time. I'm sure we all wonder if all these foreign governments are seriously considering Linux, or just trying to negotiate better prices from Microsoft.

    It's odd that Microsoft would admit to being willing to lower prices if someone happens to bring up the name, though. Maybe they're feeling bad about the "Licensing 6.0 won't raise the price you're paying" lie. Probably a lot of AP departments are now asking MS why they posted their biggest quarter ever once it was institued if it wasn't a net gain for MS.
  • hmm (Score:5, Funny)

    by Quasar1999 ( 520073 ) on Wednesday November 27, 2002 @05:28PM (#4770439) Journal
    I wonder if this works if you threaten to pirate their software? Seriously... I need Visual Studio .Net... I can't find an open source alternative that meets my needs... but if I threaten to pirate, will they give me a discount???
    • Re:hmm (Score:5, Interesting)

      by BSDevil ( 301159 ) on Wednesday November 27, 2002 @05:48PM (#4770639) Journal
      Isn't that what they do at most Universities? Take the kids who would pirate things like VS.net, give the full copies for free in academic non-commerical licences, and get them hooked so that if they ever wanna do something commercial with it they've gotta shell out for the full version (because it's all they know how to use)...
  • price cuts (Score:3, Interesting)

    by rppp01 ( 236599 ) on Wednesday November 27, 2002 @05:28PM (#4770446) Homepage
    I once heard, that if MS wanted to, they could cut the cost of Windows to free, and they would continue to generate large sums of income owing from the Office Suite, Server Suites (Exchange, SQL, etc). I think they were speaking of the desktop- home.

    That's pretty impressive to me. But it reminded me of the IE and Windows thing. Tie them down to the apps, and they are forced to the OS.
  • by g4dget ( 579145 ) on Wednesday November 27, 2002 @05:28PM (#4770447)
    Those discounts are, of course, temporary: Microsoft hopes to kill open source competition (like they killed everybody else), and then they'll go back to charging more.

    The other issue is that free software is not about getting the software itself for free, it's about the freedom to inspect, use, and improve the software as you like. That lowers TCO and reduces business risks; even if MIcrosoft gives away Windows for free, they can't compete with that.

    • The beautiful thing about open source is it's virtually impossible to kill. It's a grass roots movement. It's not so hard to kill a company that deals in open source software (i.e. Redhat, Suse, Mandrake, etc). Microsoft can squeeze just about anybody out of business, but with the GPL, the code never dies. There will always be someone out there that wants to see a particular app or distro survive. One one person or company falls, another comes along and picks up the gauntlet. It appears as an endless sea of open source programmers...

      When the "revolt" comes from the end users, it's virtually impossible to stop.

      Massive price discounts is the "worst" thing Microsoft can do (to Linux based companies), since -most- people could give a $%#@! about software freedom. It's the wallet that people mostly pay attention too.

      • I think Microsoft's efforts ultimately are futile. But, nevertheless, they are trying hard: Palladium, proprietary media formats, proprietary document formats, exclusive distribution agreements, non-PC hardware (X-box, Mira, TabletPC, PocketPC, etc.) are all attempts at excluding open source. Add to that some heavy political lobbying, PR, monopolistic practices, campaign contributions, and who knows what other sleazy efforts. With that, they have had some modest short term successes.
  • not surprising... (Score:3, Informative)

    by jone1941 ( 516270 ) <jone1941.gmail@com> on Wednesday November 27, 2002 @05:29PM (#4770458) Homepage
    Given that Microsoft can stand to make a little less profit [theregister.co.uk] on its sales of Windows. Is this really all that surprising?
  • Lindows? (Score:5, Interesting)

    by jaaron ( 551839 ) on Wednesday November 27, 2002 @05:30PM (#4770460) Homepage
    I've been following the Lindows product since it's first annoucement, but I haven't used it at all (I'm not willing to pay $99 for beta-open-source-software [especially considering the high quality of many other distros]). It surprises me that Lindows rather than RedHat or Mandrake or even Lycoris is causing all the fuss. My impression has been it's a distro [or I should say a CEO named Robertson] that makes a lot of noise but isn't necessarily the best out there. Some might argue that making noise is enough. Perhaps it's enough to get MS and the press to notice, but if the product's crap, then the businesses and users who switch will be return to MS's camp quickly. Anyone using Lindows willing to point out how great it is or isn't? Does it really have a chance?
    • Re:Lindows? (Score:3, Insightful)

      by Ryu2 ( 89645 )
      The analyst almost for certain meant Linux, since Lindows is primarily a desktop oriented distro, and most business Linux migration is on the server side.

      Don't be surprised, most "analysts" are marketroids with no technical background whatsoever, and really know little of what they cover, besides what they read in the press releases and company calls.
    • Re:Lindows? (Score:3, Interesting)

      by LostCluster ( 625375 )
      Lindows is the first Linux distro company with executives who know how to make noise.

      It takes a brash set of executives to pick a name that's sure to bait the MS laywers, then have the lawyers to win the resulting stare-down. They're willing to play MS at its own game.
    • by twitter ( 104583 ) on Wednesday November 27, 2002 @07:06PM (#4771288) Homepage Journal
      You said it yourself:

      I'm not willing to pay $99 for beta-open-source-software [especially considering the high quality of many other distros]

      M$ knew this would make a stir but did not want to advertise any of those other distros. How many people do you know who even know what a distro is, much less can name several. M$ is pointing toward what it gathers is the least attractive alternative as a making themselves look better. They would never point them toward Debian, Red Hat, Suse, Caldera, Mandrake, Net/Free/OpenBSD. What they are pointing them to is a "discount" distro sold at Walmart that's doing everything it can to look and act like windows.

      It does not matter. The cat's out of the bag and Microsoft is gonna get it. They really have pushed people too far and been, well, evil. They, not the government nor Slashdot nor the mass media, proved their nature with EULAs and pricing. Good riddiance M$.

  • Mac OS X (Score:4, Insightful)

    by Triv ( 181010 ) on Wednesday November 27, 2002 @05:30PM (#4770461) Journal
    ... I'm sure OS X is on MS's mind as well.

    Yeah, but prolly not to anywhere near the same extent - proprietary hardware, remember? Added to which, Mac OS X isn't offering windows application interoperability.

    On MS's mind, sure. In their sights...not nearly. :)

    • Added to which, Mac OS X isn't offering windows application interoperability.

      Oh? I am moving files back and forth between other people running Windows and my OS X machines all the time. I have built in Windows networking on OS X, and all the files I use are compatible between Windows and OS X. .doc .ppt .pdf .psd .tiff .pro .pix etc...etc...etc... What application interoperability are you talking about?

      • Re:Mac OS X (Score:3, Insightful)

        by RevAaron ( 125240 )
        Sure the poster could've stated it better, but isn't hard to figure out what he meant...

        What he meant to say was that Mac OS X cannot run Windows apps in the same way Linux+WINE can/could/will-be-able-to. Sure, you could install Virtual PC, but you'll still have to buy a copy of Windows, so it would be all the same to MS.

        Unless you were to install a Linux/x86 distro with good WINE integration into VPC, and run applications meant for Windows that way. But if you did that, Linux would be the thing enabling that, not Mac OS X or Virtual PC.
  • by Cap'n Canuck ( 622106 ) on Wednesday November 27, 2002 @05:30PM (#4770465)
    ...should go to M$ and see if M$ will "undercut the competitor's prices". That way, they'd get money from M$ to remain on Windows.

    Whether that's a true savings or not is left as an excercise for the reader...
  • by Yo Grark ( 465041 ) on Wednesday November 27, 2002 @05:30PM (#4770469)
    Can you imagine if companies started to discount their software when competitors were involved? What would our economy do? Wait....that would lead to COMPETITION and competition is bad, surely microsoft sales reps realize that their software is supreme and that ALL THE BASE BELONG TO THEM.

    Next thing you know, Office will be free to compete with OpenOffice and the like.

    I've said it before, and I'll say it again, Microsoft is heading back into a world of competition. The monopoly ride was good, but now they gotta get back to selling the shit on the grounds of quality and superiority in peoples mind, even if that means selling it for less.

    Yo Grark
    Canadian Bred with American Buttering.

    • I've said it before, and I'll say it again, Microsoft is heading back into a world of competition.
      Not quite. The haven't actually lowered their prices. That would be competition. What they are doing is price discrimination. Not as helpful for competition.
  • Do ya think? (Score:3, Interesting)

    by thatguywhoiam ( 524290 ) on Wednesday November 27, 2002 @05:31PM (#4770473)
    I'm sure OS X is on MS's mind as well.

    Really? Maybe. The Xserve has gotten some attention, sure, but I think WinXP has solved Microsoft's biggest problem with Mac OS X: both XP and OS X look Shiny now.

    I know, I know, Aqua is technically and aesthetically better, but most people don't know the difference. (Emphasis on most people, there.)

    When companies start to realize that they can deploy both Macs and Linux with basically minimal fuss between them, that's when things get interesting.

  • by dagg ( 153577 ) on Wednesday November 27, 2002 @05:31PM (#4770475) Journal
    Underbidding the competition is something that all companies do when they need to make the sale. The difference with Microsoft is that they always need to make the sale. They don't want any competitition.

    The sex of your friends? [tilegarden.com]
  • by kasperd ( 592156 ) on Wednesday November 27, 2002 @05:32PM (#4770481) Homepage Journal
    The headline says Linux, the article says Lindows all over. Is Lindows the only GNU/Linux distribution they care about?
  • I don't believe it (Score:3, Interesting)

    by Otter ( 3800 ) on Wednesday November 27, 2002 @05:32PM (#4770486) Journal
    (Disclaimer: I have no real information or experience to bring to bear on this question.)

    What's happening is that Microsoft sales reps have been instructed to be on the lookout for any businesses that are migrating some of their machines to the Lindows OS,' Yankee Group analyst Laura DiDio told NewsFactor.

    I don't believe it. Lindows has gotten a lot of hype, and even some positive reviews, but I have not gotten the impression it's made any impact yet. (OK, maybe I do have some information -- reading KDE bug reports, mailing lists and help channels, I've never seen a single person using the KDE-based Lindows.)

    Either the author confused "Linux" with "Lindows", it's another analyst shooting off her mouth about something she read a press release about or there's some financial connection to Lindows.

  • How can it be possible to undercut your competition if you have a monopoly like that? Sure one can hope that every living soul out there using Microsoft learns about this. That way they had to pay some. Still it sounds a bit to creapy to me.

    I mean comon, its not like Linux is that much of threat right now. To go to such an extreme to twart any sign of competition even in the earliest stage possible shows that they wont settle for anything but total domination. Thay still do anything possible to stop anybody from competing no matter how small they might be. That judge wouldnt get a clue with Cluestick 2000(tm) up her but powered by a nuclear powerplant.
    • Undercut?? Undercutting is when you sell something for below cost so that the competition cannot compete at that price.

      This is not undercutting by any stretch of the imagination since they're competing with free.

      MS can't win on Slashdot. If they raise their prices they get accused of being a monopoly and abusing it. If they lower their prices they get accused of "dumping" and undercutting the competition.
      • by sholden ( 12227 ) on Wednesday November 27, 2002 @06:52PM (#4771189) Homepage
        Undercut?? Undercutting is when you sell something for below cost so that the competition cannot compete at that price.

        I've never come across such a definition of undercut.

        The plain old dictionary (ie. the non-economic general definition) gives me:

        "To sell at a lower price than or to work for lower wages or fees than (a competitor)."

        In economic writing I've only ever heard the term undercut to mean, sell for less than your competitor is selling, nothing to do with cost.

        Dumping is the term I've seen for selling below your cost (predatory dumping if you are doing so to remove competition, but usually because government subsidies make it worthwhile for you), and you use that further down.

    • > I mean comon, its not like Linux is that much of threat right now.

      If you count the "might switch" headlines it looks like there has been a sudden upswing in Linux interest among companies and governments this year. Sure, it's still really minor in the big picture, but it's growing, and it appears to be growing faster. Someone at Micorsoft may have catastrophe theory on the mind.

      Indeed, this announcement could be catastrophic as far as Micorsoft's pricing is concerned. And in the new Can't Cook The Books Anymore climate, that might be bad news for some quarterly income reports.

      And since Micorsoft has always been more interested in share prices than in software, the catastrophe may be at hand.

  • by Big Toe ( 112240 ) on Wednesday November 27, 2002 @05:35PM (#4770510) Journal
    Just enter code, "thinkingaboutlinux" at the confirm order screen to show products at up to 50% off!
  • by BWJones ( 18351 )
    I'm sure OS X is on MS's mind as well.

    It has to be. When one of the companies that I consult for decided to move from Windows to OS X, the Microsoft rep was VERY concerned but could do nothing about the decision as they were absolutely sick of all the security snafu's from Microsoft. Personally, I also Switched [apple.com] my individual workstations from two Windows boxes and an SGI to a single OS X box saving me space, maintenance dollars and security and maintenance headaches.

  • OS X? (Score:3, Insightful)

    by Anonymous Coward on Wednesday November 27, 2002 @05:36PM (#4770514)
    ... I'm sure OS X is on MS's mind as well.

    What are they going to do? Offer to raise the price if someone is looking at buying a Mac?

    Yeah, you may call me troll if you like, but as long as Apple keep its pricing, it will be a niche OS, partly for those that wants to tell the world they can afford it.

    I'm sure it is a great computer, but even die hard Mac fans I know are buying PC's because they can not afford the computer they really want. Not to mention all non-Mac users.

    Ellen Feiss or no, people that actually do switch are really, really rare, even these days.
  • by ekrout ( 139379 ) on Wednesday November 27, 2002 @05:37PM (#4770523) Journal
    Back in high school, every computer in the entire building was running Windows 98. Of course, we had a Novell-backed network to do all the dirty work like user authentication and email, but from a desktop standpoint, it was Windows all the way.

    I found out about Gentoo from an Internet Web site and soon began investigating the feasibility of converting most of the existing machines over to Linux.

    Years later, I saved my old school probably $5,000+ and they're all running highly-optimized, natively-compiled Linux systems courtesy of the Gentoo creators. I initially considered Slackware and Debian since they're rock-solid, but I felt that Gentoo had a more active community and a quicker turn-over in the development cycle.

    Regardless, though, Linux was the right choice, and I urge potential Microsoft customers to seriously consider Open Source solutions. Do not let these meager price cuts deceive you!
  • by Znonymous Coward ( 615009 ) on Wednesday November 27, 2002 @05:37PM (#4770529) Journal
    Read this article for more info.

    http://www.lindows.com/lindows_michaelsminutes.p hp

  • So true! (Score:2, Interesting)

    by The Bungi ( 221687 )
    And they do this when customers are thinking of using IBM. And Oracle. And CA. And Sun. And Dell does the same thing wrt HP. And the other way around, and ad nauseaum.

    And those other companies? They do the same things when customers start getting evil thoughts of moving to Microsoft. Or one of the other companies, ad nauseam.

    It's called "business". But it's not "news".

  • I'm sure OS X is on MS's mind as well.

    Why would you be so sure ? AFAIK, there are no large movements under foot in corporations to move from Windows to OS X. And OS X suffers from many of the same undesirable qualities as Windows: for instance, it's not (completely) open and it requires hefty licensing fees. Moreover, the huge variety of apps availble under Windows are mostly NOT avaible under OS X. So why would MS deem OS X to be a threat ?
    • Re:Why OS X ? (Score:3, Insightful)

      by phillymjs ( 234426 )
      ...OS X suffers from many of the same undesirable qualities as Windows: for instance... ...it requires hefty licensing fees.

      The cheapest Xserve you can buy is $2999 and includes a copy of Mac OS X Server with an UNLIMITED concurrent-client access license. When I showed the specs on the Xserve to the Windows guys in my company, their jaws hit the floor when they saw that. How much does a comparable license cost for Windows 2000 Server? Last time my company bought a license like that for a Windows-based client, it was in the high four to low five figures, and didn't include the price of the server hardware. Right there, that's significant savings over using Microsoft stuff.

      I can't really comment on the workstation pricing as I am not familiar with Microsoft's pricing. However, Apple is selling 5-license "family" packs of OS X for $199, which works out to $40 per seat. I can't imagine the business volume-license pricing for OS X being much different from that.

      Moreover, the huge variety of apps availble under Windows are mostly NOT avaible under OS X.

      Uh huh. And that's an issue how, when probably 85% of people who use a computer as part of their office job only use Microsoft Office (which is available for the Mac), a browser, and an e-mail client?

  • by debest ( 471937 ) on Wednesday November 27, 2002 @05:44PM (#4770585)
    Is there really a company out there this stupid?

    I can see the points of sticking with Windows (software works OK, no retraining costs, licencing cost increase doesn't outweigh short-term pain of switch). I can see the points of switching to a *real* Linux distro (Red Hat, SuSE, et al) aiming at the business desktop (Free, secure, etc).

    But Lindows offers no advantage to a business. It is different enough from a user point of view that there would be big-time retraining. Most custom apps would not work (hell, most packaged Windows apps wouldn't either). They also play loose with the spirit of the GPL and it runs as root to open themselves up to viruses and hacks.

    Maybe Microsoft is targeting businesses that show interest in Lindows because, when it comes to customers contemplating a switch from Windows, you might as well go after the dumbest ones first!
  • Great! (Score:4, Funny)

    by mark_space2001 ( 570644 ) on Wednesday November 27, 2002 @05:45PM (#4770596)
    I'm thinking of migrating my desktop from Windows 2000 to Red Hat 8.0.

    Do you think Bill will give me a discount on Windows XP Pro? $80 instead of $299 would be great!

    (Laugh, it's funny :-)

  • by carlmenezes ( 204187 ) on Wednesday November 27, 2002 @05:46PM (#4770608) Homepage
    Microsoft is offering zero percent financing until early 2003...
    later, small fast voice in background says :
    Offer valid on select Licensing 6 programs geared toward small business customers.
  • by Anonymous Coward
    If there was no Linux to compete with Microsoft, there would be no discounts.

    I hope businesses see this as an opportunity to say no to Microsoft. Because if they all say yes, Microsoft will increase its market share and the discount will disappear right before their eyes.

    50% market share for Linux and other open source OSs would be perfect and would make Microsoft play nice with their customers.

    Linux: the best friend for Microsoft users.
  • by chriso11 ( 254041 ) on Wednesday November 27, 2002 @05:51PM (#4770671) Journal
    This economy and MS's actions have provided an awesome opportunity for Open Source, and put MS at a risk that they haven't seen for more than a decade.
    Yet open source advocates should keep focused. The software is almost where it needs to be, not quite. Why is this bad? Because there will potentially be a huge flood of new users, who will run crying back to MS if they encounter any significant issue (even if the issue is all in their mind). Basically, if open source loses this round of potential converts, we could be locked out for many many years.

    Remember "that which doesn't kill me only makes me stronger".
  • by porky_pig_jr ( 129948 ) on Wednesday November 27, 2002 @05:57PM (#4770742)
    This reminds me the situation with IBM and their main-frame competitors, Amdahl and Fujitsu. The simplest thing to get a steep discount from IBM was to have a meeting with IBM salesperson while having either Amdahl or Fujitsu brochure on your desk. Worked like a charm! Yet with this practice widespread, it has slowly downed to all IBM customers that they pay too much in a first place, and may be they should look for mainframe alternatives. That was about 10-15 years ago. I hope the same will happen with Microsoft customers.
  • MAKE MONEY FA$T!!! (Score:3, Insightful)

    by Black Parrot ( 19622 ) on Wednesday November 27, 2002 @06:03PM (#4770794)

    I bet there will be a sudden demand for Linux gurus next week. Not for conversions, but for "studies" of potential conversions, so the companies can reap the new "Linux discounts" from Microsoft.

    If you're idle, this might be a good time to set up a "switch to Linux" consulting business.

  • by dackroyd ( 468778 ) on Wednesday November 27, 2002 @06:06PM (#4770828) Homepage
    Monopolies raise prices, more details at nine !

    Surely this should be from the 'Economics 101' department.
  • by SensitiveMale ( 155605 ) on Wednesday November 27, 2002 @06:09PM (#4770862)
    Cost cutting measures are abound at ms!

    Can now only fund 3 world domination plans rather than 5.

    Balmer can only use anti-persperent at a 1/3 of the conventions rather than 1/2 of them.

    Ms can only afford to leak a document every other Halloween now.

    Will be forced to change the name to 'Window'.
  • A good thing? (Score:3, Interesting)

    by Restil ( 31903 ) on Wednesday November 27, 2002 @06:21PM (#4770976) Homepage
    If companies realize that the ticket to getting lower oem rates is to sell computers with lindows or any other linux distro preinstalled, there will be more retaillers doing exactly that, if only to take advantage of the price breaks. This means they'll be on the shelf and people might buy them.

    I've noticed lately that Fry's has started to sell a system with some distro of linux pre-installed, complete with free versions of every office based application imaginable, for a grand total of $199. With that low of a price, there might be some people who buy it just to find out what this whole linux thing is all about. Microsoft might be giving other retailers an excuse to do so as well. So let them shoot themselves in the foot if they want to.

  • by ehintz ( 10572 ) on Wednesday November 27, 2002 @06:23PM (#4770993) Homepage
    Last year MS sent me some happy-ass brouchure asking for info about what platforms we use so they could "better serve us". I replied that we use linux everywhere except the desktop and we're trying hard there too. Basically, told 'em to piss off and die, but politely. The very next day the sales rep called up and said they wanted to enforce the clause in our Office 2k site license that says they can audit us whenever they damn well please. Coincidence? Maybe. But I don't buy it. We're pretty good about keeping licenses up to date and all so it wasn't like the audit caught us with our pants down or anything, but it was a massive waste of time and effort. Lesson learned: when dealing with MS politely decline offers but don't mention why; do whatever is needed to avoid turning one's self into a target for the software cops. 'Tis far better to stay under their radar.
    • by Anonymous Coward on Wednesday November 27, 2002 @09:27PM (#4772001)
      I have not (yet) been targeted by the BSA folks, but if/when they call, here is my response:

      We have been quietly migrating most of our servers to Linux, and we are evaluating a Linux desktop as well. When our CFO gets wind of the cost of complying with your little "audit", he will hit the roof. When the friendly folks in the IT department offer OSS products and the CFO evaluates the savings, Microsoft in our company will be DOA. If you're serious about auditing us, do it quickly. Otherwise, there will be no M$ products to audit.

      If threatening to switch is what triggers the new M$ discounts, I figure it would be a suitable prescription for the BSA headache as well.
  • by nighthawk ( 6500 ) on Wednesday November 27, 2002 @06:30PM (#4771035)
    The net impact on MS's bottom line from a few sites holding out for discounts will be negligible. The precident this sets _could_ be monumental. Hidden in the pricing of any product is the message that the product is worth the price. Any time the seller fiddles with a price, they erode the value of the product. If 1% of the population gets the product at 50% off, and everyone else knows it, most of the population will see the product as overpriced for its value.

    One of the hidden messages in the Linux Meme is that the retail price of world class operating systems, and office suites is $0/copy. Imagine the price erosion on cars if there were free ones available.

    The existance of Linux/Lindows has pulled at a thread. MS's cash cows are OS's and Office Suites. (kinda funny how this is the area of recent attack by the Open Source Community:-).

    If MS's margin of profit on these two areas falls, then all their business plans are threatened. If these areas are only marginally profitable, the natural condition in a competative market, then there is little cash left over to preditate other areas. If cash is tight, them MS can't afford the current level of post sales support. That will hurt in the long run. If their cash reserves are depleted in the fight, then their stock price could fall. If the stock price falls, then the options which they pay their employees becone worthless /or employees, a ~40% fraction of their shareholders start dumping stock. All employees who don't dump fall back to the middle class. Big time employee dissatisfaction.

    Here's the Meme, the talking point: The fair market price of world class OS's, Office suites, web servers, Mail Servers, RDBMS;s etc is $0/copy.

    Find a loose thread, pull it.
  • by Melantha_Bacchae ( 232402 ) on Wednesday November 27, 2002 @06:41PM (#4771101)
    Did that get your attention? Good. We'll get to that (misleading) headline in a moment.

    There is no discount, people. ZDNet had the story under a similar headline (http://zdnet.com.com/2100-1104-975399.html) with the misleading headline of "Microsoft targets defectors with discounts". If you read that article, it becomes clear that Open Value is an extended payment plan for bad old Licensing 6. Aside from stretching your payments out (thereby "lowering" them), you pay the same money as Licensing 6 plus interest, and have all the wonderful disadvantages of Licensing 6. The only discount at all is a potential 0% financing you might get if you drag your feet and throw a screaming temper fit. Licensing 6 saves you money (only in Ballmer's head) while it costs you more (minimum 33% to 107%).

    The people they are targeting are the 66% of their customers smart enough not to fall for Licensing 6. Don't fall for this either, unless your only objection to Licensing 6 was the lack of a payment plan with an interest escape clause based on your temper throwing skills.

    As for Microsoft promoting Open Source, that was the subject of an article by Japan Today (http://www.japantoday.com/e/?content=news&cat=4&i d=240429) entitled "Microsoft to promote open-source software in Japan". This time, they are promoting their "Shared Source Initiative". Which we all know is *not* the same as open source.

    I don't know whether Microsoft is purposely sending out a lot of misleading press releases or we have had a really bad press day today, but that sure is a lot of misinformation being spread for just one day. Just goes to show, you can't believe everything you read, especially if it is based on an MS press release.

    Chief Tsujimori: "I won't let you get away. I will never let you escape."
    Godzilla elegantly lifts his tail skyward to give her the "finger", crashes it down on the water, and submerges.
    "Godzilla X Megagiras", 2000
  • Strange Rationale (Score:3, Interesting)

    by suwain_2 ( 260792 ) on Wednesday November 27, 2002 @07:08PM (#4771301) Journal
    I've never understood the desire to convert everyone and everything to using Linux. My computer runs Linux. I can run Windows under VMware [vmware.com] when the need arises, but my computer is first and foremost a Linux machine.

    However, my family uses Windows. Most of my friends use Windows. Have I mentioned Linux? Of course. Have I forcibly converted them? Absolutely not.

    Don't get me wrong -- Linux evangelization is a great thing. People should know that better software exists. But I simply don't understand the rationale of people who want to see Linux on everything. Frankly, I like Linux the way it is (was) -- almost an 'elite club' of computer geeks. I'm not implying that we shouldn't let people use Linux, or that we should keep it a closely guarded secret. I just don't see why we think that my grandma should run Linux -- yes, it can be very easy to use. But what does it matter if she runs Windows or Linux? Her box came with Windows, and it still runs Windows. Today, if it came with Linux, it might run Linux, but if it came with Windows, it would also run Windows.

    The point of this lunatic diatribe is this: I think we should 'evangelize' Linux to some extent, but we should really rethink the "Linux on everything!" approach -- do we really want millions of people using Linux? (Applogies if this sounds like a troll, or some sort of insane rant... But I'm trying to pose a serious question.)

  • Lindows? Come on. (Score:3, Interesting)

    by greygent ( 523713 ) on Wednesday November 27, 2002 @07:14PM (#4771338) Homepage
    I don't know of any large enterprise that is worth dealing with for Microsoft would actually use Lindows.

    When you care about your business, you don't buy a crescent wrench to use as a hammer. Any business in their right mind that relies on Microsoft software is going to run that software on Windows.

    I wonder if this article was written by an armchair Linux enthusiast with the ever infamous penguin tunnel vision. Linux is great for workgroups and closets, and it absolutely sucks in the enterprise. No decent distributed user store (OpenLDAP is NOT decent for production enterprise environments, nor is 'scp /etc/passwd remoteserver:/etc'), not enough clustering and fault tolerance support, poor choices for centralized management, etc.
  • by Anna Merikin ( 529843 ) on Wednesday November 27, 2002 @07:20PM (#4771365) Journal
    Well, let's see. Microsoft first drove Digital Research's superior DOS to near-oblivion by allowing IBM XT buyers to choose MS-DOS for free or to pay for DR DOS via a very low priced bundle deal (read nearly free) with IBM.

    When GeoWorks had a workable competitor to 16-bit Windows, MS had nearly-free DOS/Windows bundle deals with almost every OEM.

    When MS charged for IE, before Windows 95, and Netscape troubled them, they incorporated it into the OS, so it was free as in without extra cost.

    Intel is doing the same thing. When the heat was still on them just after their favorable anti-trust judgment, they allowed AMD to gain almost 5-per cent market share. Now that the heat from the Feds is off, and the heat from the investors is up, they are disallowing AMD market share by dropping prices so low AMD has to sell at a loss.

    Every monopolist does this.
    I have seen war. You will not like it.
  • by TheLastUser ( 550621 ) on Wednesday November 27, 2002 @07:23PM (#4771384)
    Why should I care if my OS costs $200 or $100 or $0. The price is small compared to the length of time that you use it.

    Its more about ease of use, if the OS is difficult to set up and maintain, why would I use it just to save a few $.

    That's why I use Linux, not because it saves me a $100, but because I find it annoys me less than windows.

    I am much more productive with Lunix, that's why I have all this free time to post meaningless stuff on /.
  • competition (Score:3, Insightful)

    by rawshark ( 603493 ) on Wednesday November 27, 2002 @08:04PM (#4771581)
    As one of my friends who groks economics puts it, the first benefit of being a monopoly is that you can charge monopolistic prices, q.v. the 700% profit margins on Windows and Office. The links for those articles have already been posted, and I will not repost them. I think that the fact that Microsoft has to lower prices in response to Linux is one more piece of evidence of Linux's legitimacy as a competitor to Microsoft.

    I am preaching to the choir, but so what.

    Maybe by the time Longhorn comes out it'll be sitting on the shelves at Fry's for $74.99. Of course, Linux will still be cheaper, and come with more software (the hypothetical Longhorn is not expected to come with Office, IIS, etc)
  • by dpbsmith ( 263124 ) on Wednesday November 27, 2002 @08:55PM (#4771859) Homepage
    A few decades ago, shrewd customers made sure there was always an Amdahl mug sitting somewhere in the room when IBM came to call.

    Seems as if there is, at the very least, an opportunity to sell some Linux Journal subscriptions and Tux merchandise to Microsoft shops, if for no other reason than to have strategically visible when Microsoft comes around to negotiate license terms.
  • by crovira ( 10242 ) on Wednesday November 27, 2002 @09:36PM (#4772043) Homepage
    Job isn't in their market and it doesn't interest him in the least.

    M$ is starting to see defection to Linux and resistence to their subscription schemes, flat or negative PC sales as good enough is good enough for users.

    It doesn't help sales that all of the bells and whisles M$ is bundling into the OS are things that businesses definitely don't want their employeer playing with at work and most PCs are owned by corporations.

    People are scared to upgrade even more than they are of getting viruses. As Linux gets more respect for security and M$ slowlky strangles users' machines with unused feature-itis the desertions will accelerate.

    Since M$ has always assumed that revenues would always grow and all of their financial planning is based on this fallacy. Meanwhile hardware sales are in replacement mode (flat) and upgrades are meeting solid walls (negative territory.)

    Revenue will crash at some point and M$ has no real assets compared to manufacturing companies. The X-Box is a money loser. Their partnerships are non-producing. The competition is getting tougher. Users are getting fed up. The economy sucks and price points are getting too tight to keep a resource hog like M$ in business. All things being equal, like admin costs... Linux is free acquisition.

    When the end comes, it will be stunningly quick.
  • by melonman ( 608440 ) on Thursday November 28, 2002 @07:11AM (#4774110) Journal

    Isn't dropping your prices a fairly normal way to deal with increased competition: supply and demand and all that? A couple of weeks ago we were complaining that MS's margins were too high. Now we're complaining that they are cutting their margins...

    Sure, they are doing it selectively, but, if they did it across the board, it would really be bad news : does anyone think that Corel or anyone else could compete with XP Office for $50? That's cheaper than Star Office 6 in a box. And this is exactly what will happen if open source ever starts to dent their desktop market share.

    Note in passing that breaking up MS would have made things worse in this respect, as the highly profitable OS and Office departments would not even had to carry the loss-making departments anymore, so they could slash prices even lower and still make a respectable profit.

    The postings about Linux for $0 are funny, but miss the point that no OS change is free for a company with existing staff and data. If you take discounted MS products and set them against free Linux products plus the number of man hours needed to reskill your staff, the figures are closer than we might like to admit.

Man is an animal that makes bargains: no other animal does this-- no dog exchanges bones with another. -- Adam Smith