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Microsoft

For Microsoft, Market Dominance Isn't Enough 699

chemstar writes "Last summer Orlando Ayala, then the top sales executive at Microsoft Corp., sent an e-mail titled 'Microsoft Confidential' to senior managers laying out a strategy to dissuade governments across the globe from choosing cheaper alternatives to the ubiquitous Windows operating system. Ayala's e-mail told executives that if a deal involving governments or large institutions looked doomed, they were authorized to draw from a special internal fund to offer software at a steep discount, or free, if necessary. Steve Ballmer, the Microsoft chief executive, was sent a copy of the e-mail. The memo, which focused on system software for desktop computers, specifically targeted Linux, a still small but emerging competitor. "Under NO circumstances lose against Linux," Ayala said." Perhaps that's because, as roomisigloomis writes, "Seems that MS' licensing practices are working against the company," pointing out this article which "suggests that open source, Linux and other software is actively being sought."
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For Microsoft, Market Dominance Isn't Enough

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  • by Anonymous Coward on Wednesday May 14, 2003 @02:41PM (#5957336)
    How can BSD [freebsd.org] be dying when it has a mascot [freebsd.org] like this?! Linux needs to get its act together if it's going to compete with the kind of hot chicks [hope-2000.org] and gorgeous babes [hope-2000.org] that BSD has to offer!

    You just can't take Linux [redhat.com] seriously when its fronted by losers [nylug.org] like these. You Linux groupies need to find some sexy girls like her [hope-2000.org]! I mean just look at this girl [madchat.org]! Doesn't she [madchat.org] make you hard? I know this little hottie [madchat.org] floats my boat! This guy looks like he is about to cream his pants standing next to such a fox [spilth.org]. As you can see, no man can resist this sexy [spilth.org] little cock teaser [spilth.org]. Even this old bearded Unix guru is apparently unable to take his eyes off her [spilth.org]!

    Join the campaign for more cute [madchat.org] open source babes [madchat.org] today!
  • by kipsate ( 314423 ) on Wednesday May 14, 2003 @02:42PM (#5957351)
    So, if you want to have Microsoft software for free, you know what to do!
    • Re:that's great (Score:5, Insightful)

      by tuffy ( 10202 ) on Wednesday May 14, 2003 @03:03PM (#5957590) Homepage Journal
      So, if you want to have Microsoft software for free, you know what to do!

      Ah, but Microsoft software is free only if your time is worthless.

      ;)

      • Re:that's great (Score:4, Insightful)

        by eXtro ( 258933 ) on Wednesday May 14, 2003 @03:16PM (#5957729) Homepage
        The same is true for any other software though, there's really nothing significant about the comment. Linux is free, but if I want to use it as the infrastructure for my company then I need to invest manhours into it, whether my own or somebody elses. Depending on which flavour of zealot you ask you'll get a different answer as to which is more expensive in terms of man hours required to implement that infrastructure.
    • by Loki_1929 ( 550940 ) on Wednesday May 14, 2003 @03:21PM (#5957776) Journal
      " So, if you want to have Microsoft software for free, you know what to do!"

      Download it from Kazaa?

      Oh, wait, I forgot to RTFA.

    • Re:that's great (Score:5, Insightful)

      by GreyyGuy ( 91753 ) on Wednesday May 14, 2003 @03:50PM (#5958037)
      Sure... you get it free this year. Then when you have everything installed and all the people trained, do you expect them to be as generous the next time?

      The OS and Office are their only cash sources. They can't afford to give them away forever.

      The first one is always free.
  • by Violet Null ( 452694 ) on Wednesday May 14, 2003 @02:43PM (#5957357)
    It's not the price, really. Corporations and governments are willing to pay the price of Windows to ensure that they have support and stability. But the licensing of Windows -- product activation and the like -- are what's really kicking Microsoft's teeth in. Consumers are willing to overlook a lot, but not things that actively make their life harder, for no personal gain for them.
    • Product activation isn't present in the corporate editions of microsoft software.
    • by JonnyElvis42 ( 609632 ) on Wednesday May 14, 2003 @02:55PM (#5957504)
      the licensing of Windows -- product activation and the like -- are what's really kicking Microsoft's teeth in

      Awww, why do licensing and product activation get to have all the fun?
    • Consumers are willing to overlook a lot, but not things that actively make their life harder, for no personal gain for them.

      Don't forget the forced upgrades hand in hand with the nullification of the economic value of your old software.

      z
    • by Karl Cocknozzle ( 514413 ) <kcocknozzle&hotmail,com> on Wednesday May 14, 2003 @03:16PM (#5957726) Homepage
      Corporations and governments are willing to pay the price of Windows to ensure that they have support and stability.

      What support? MS requires you to PAY for technical support. Their web-site is extremely user-unfriendly, a real PITA to get useful information out of. In the end, if you want support for Microsoft software, you pay for it in the form of a Full-time Employee who supports your network, or by buying "Per Incident" support from MS.

      What stability? There's a new "Security Patch" issued every two days that must be thoroughly tested to insure that it doesn't bring the entire office down in flames. (See story about Win 2k/XP patch from last month that made even the fastest machines crawl.)

      While OSS doesn't eliminate the need to hire an FTE to support your network, it does drastically reduce your licensing expenses. In our office we just build the cost of licenses for MS software in the price of any PC we buy because otherwise the departments would bitch a blue streak about how much "extra" all that "Included" software costs them. (I know this because we used to break it down for them, and three times annually some manager would pitch a bitch about how "IT Should Be Paying For My Licensing Costs".)
    • nice try. (Score:3, Interesting)

      by twitter ( 104583 )
      Wow, you said pirce, support, stability and Windows in the same sentenc as if Microsoft offered an advantage in any of these things. That's funny.

      On the licensing front, it's more like the mask is off. M$'s recent licensing was every bit as bad as the "zealots" and other free software advocates have said it would be all along. The Next Generation looks even worse than all but the most paranoid visions could predict [gnu.org]. There, bare faced, is the power hungry monster we all worried about. It's not easy to f

  • by Gortbusters.org ( 637314 ) on Wednesday May 14, 2003 @02:44PM (#5957375) Homepage Journal
    To want to beat out the competition.

    Many large corporations drive prices down to crush the little guy.
    • There is a huge difference between driving down prices (legal) and giving away your product for free (illegal). This legal rule captures the more general principal that price discrimination (charging different prices according to the purchasers ability or desire to pay) is highly economically inefficient and should be avoided.
      • by Jason Earl ( 1894 ) on Wednesday May 14, 2003 @03:14PM (#5957706) Homepage Journal

        Sun is willing to give OpenOffice away for free, and they even will happily give you the source code. What exactly is the difference between giving away OpenOffice and giving away Microsoft Office?

        Answer: there isn't any difference other than the fact that you probably like Sun, and you don't like Microsoft.

        The fact of the matter is that, despite what Microsoft says publicly, the cost of MS Office and Windows is definitely a factor. Competing with Free Software in the long run is going to require that Microsoft lower their prices substantially. This is especially true when you are talking about key accounts like governments and large institutions. Microsoft will do what it takes to maintain these accounts.

        The good news is that Microsoft can't really afford to lower the prices on their core products of Windows and MS Office. Sure, they have billions in the bank, but that doesn't mean that they want to become a charity. Microsoft currently has a price/earnings ratio of about 30. That means that Wall Street expects a very healthy amount of growth from Microsoft. As these discounts cut into Microsoft's profit margins and revenues then this trend will negatively effect MSFT's stock price. $43 billion is a lot of money for a business to have in the bank, but it is peanuts compared to the amount of wealth that Microsoft executives have tied up in their stock.

        When push comes to shove Microsoft execs will defend their stock price at all costs, and that means coercing more money out of their current customers, not less.

        • "Sun is willing to give OpenOffice away for free, and they even will happily give you the source code. What exactly is the difference between giving away OpenOffice and giving away Microsoft Office?"

          The power of monopoly. And the fact it is illegal to use the wealth and power from one monopoly to create another.

          Not that Ashcroft would care.
        • by hey! ( 33014 ) on Wednesday May 14, 2003 @04:20PM (#5958407) Homepage Journal
          Well...

          Looking at it the other way, there's no way to get people to use an alternative office package except by giving it away. This is certain proof that MS has a monopoloy in office suites.

          Let's stipulate for the time being that this monopoly was legally obtained. What's the differnce between Microsoft giving away its software and Sun giving aways Star Office? The difference is that in one case it will be done to stifle competition and the other case to preserve or increase competition.

          So while you can argue that "they are doing the same thing", the effect on the public interest is exactly opposite.
    • But ... (Score:3, Insightful)

      by zonix ( 592337 )

      But in this case the corporation in question has a monopoly - traditionally, they should be required to play by different rules than corporations which do not.

      z
    • Not only that, having a special fund for discounts is *very* common. When I was a sysadmin at a major university, if I wanted 50% off sun equiptment all I had to do was use the word "Dell" in a sentence. Curiously the products were still overpriced.

      Sun was/is so bent on destroying linux, when I discussed our setup with their sales engineers they were *throwing in* Cobalt Raq web servers to replace our linux web servers because they didnt want us running linux. They didnt see the irony :) (cobalt raq's run linux)

  • by hesiod ( 111176 ) on Wednesday May 14, 2003 @02:45PM (#5957381)
    I hate Microsoft as much as the next geek, but really, what do we expect from a company? Companies aim to make as much money as possible -- excluding not-for-profit & charitables -- so why should anyone be surprised that they do anything within their power to make their software as widespread as possible?

    It seems to me that every time there is a posting about something else MS does, it's the same old stuff: they want more market share, just like everyone else. That's it, it should be expected by now.

    Keep in mind that I am not excusing them for any unethical practices, just something that nags at me.
    • by Jason1729 ( 561790 ) on Wednesday May 14, 2003 @02:57PM (#5957524)
      Selling a product below cost or giving it away for free to make it difficult for competitors to get a foothold is called dumping, and it violates anti-trust laws.

      This is exactly why Standard Oil and AT&T were split up.

      When you say a company should do anything within their power to make their software as widespread as possible, do you include illegal things? Maybe a campaign of assassinating prominant open source developers until nobody is willing to work on Linux.

      Jason
      ProfQuotes [profquotes.com]
    • by burgburgburg ( 574866 ) <splisken06.email@com> on Wednesday May 14, 2003 @03:02PM (#5957573)
      Microsoft does not have the right to further it's monopoly and break US and EU laws just because they want more market share. They're not like everyone else. They are a civil judgement recognized monopoly. The rules are different when you're a monopoly.

      Also, most of us can easily imagine Microsoft salespeople approaching cash-poor, needy, developing nation government ministers with their "The first ones free" pitch, only to come back later when the government has set up some mission critical application and announcing "Time to pay the piper" .

    • Companies aim to make as much money as possible -- excluding not-for-profit & charitables -- so why should anyone be surprised that they do anything within their power to make their software as widespread as possible?

      Yes, but to do this for the long-term requires a modesty that Microsoft seems incapable of. Business is always give and take to make sure the customers willingly come back. Microsoft, on the other hand, is pretty much just take-take-take, where customers come back willing or not.
  • Dumping? (Score:5, Insightful)

    by Amazing Quantum Man ( 458715 ) on Wednesday May 14, 2003 @02:45PM (#5957383) Homepage
    Maybe the EU should look into dumping charges against MS, if they offer to give it away for "free"...
  • Handout! (Score:5, Funny)

    by w3weasel ( 656289 ) on Wednesday May 14, 2003 @02:45PM (#5957384) Homepage
    As the chair of my neighborhood gardenclub, we have been considering implementing a new server rack with either Win3k and MSSQL to track the movment and eating habits of chinch bugs. Given our modest budget, it currently looks as though we will have to forgo using MS products in favor of OSS/FS alternatives. Can I have my free software now?
  • Antitrust? (Score:5, Insightful)

    by 10Ghz ( 453478 ) on Wednesday May 14, 2003 @02:47PM (#5957396)
    Isn't this illegal? Here we have a convicted monopoly selling it's products at a loss to shut out a smaller competitor. Isn't that illegal?
  • by westfirst ( 222247 ) * on Wednesday May 14, 2003 @02:48PM (#5957416)

    1) Start up Linux replacement project.

    2) Show it to MS sales rep.

    3) Demand huge cutback in license fees.

    Repeat.
  • My own experience (Score:5, Insightful)

    by Hugonz ( 20064 ) <hugonz@gmaiBOYSENl.com minus berry> on Wednesday May 14, 2003 @02:49PM (#5957421) Homepage
    Well, it seems to be working. i worked hard here in Mexico for a company that I will not disclose. They were to offer a set-top box to an ISP, using the Geode procesor. They wanted the box with linux and they were actively encouraged by the ISP to do so.

    After a while, we discovered that we were only being used as a tool of negotiation to get lower prices for WinCE licensing... it seems that using Linux as a disuasve weapon was effective. It seemed that they would do anything not to lose to Linux

    • by Black Parrot ( 19622 ) on Wednesday May 14, 2003 @03:04PM (#5957606)


      > It seemed that they would do anything not to lose to Linux

      They're crapola software engineers, but they do understand the concept of a landslide. If cutting over to Linux ever becomes the 'in' thing to do - for whatever reason, good or bad - then Microsoft stock will share a spot in the bathroom beside SCO's. Unlike IBM, Microsoft can't adopt free software and live off hardware sales and technical services.

      This is raw survival for Microsoft. If it were almost anyone else I'd feel sorry for them.

      • Services (Score:3, Interesting)

        by truthsearch ( 249536 )
        I believe in the long run (the very long run) Microsoft will be forced to become purely a services company. Software will eventually only have "use value" and no longer fake "sale value" as Eric S. Raymond puts it. As a services company they may survive, but not without strong competition from even the little guys. They know that if they can no longer convince people to buy their software they will have to sell themselves out for services, which they know will bring a far lower revenue stream and inabili
  • by burgburgburg ( 574866 ) <splisken06.email@com> on Wednesday May 14, 2003 @02:49PM (#5957429)
    that Microsoft, our Microsoft, would use aggressive, monopolistic behavior to cement their market dominance, diminish the long-term prospects of competitors and violate European laws regarding the behavior of companies in a market-leading position? Or that it would the money in this special fund to target developing, needy, poor nations who would be in no position to question Microsoft's activities once they were locked in to a Microsoft solution?

    I'm shocked. Shocked!

  • A sign of maturity (Score:5, Interesting)

    by b.foster ( 543648 ) on Wednesday May 14, 2003 @02:50PM (#5957438)
    In the past, Microsoft has mainly concerned itself with positioning Windows NT based servers against the superior Linux-based products from Debian, Red Hat, and Caldera.

    This memo demonstrates an important shift in their strategy: they are now in a position where they are competing against Linux on thedesktop, having lost many key battles on the server side. This means that, despite religious crusades and many rifts in the Open Source community, the competition between such projects as KDE [kde.org], GNOME [gnome.org], and XFree86 [x11.org] has produced better products that are now able to compete on a level playing field with the Windows XP desktop. We know this only because Microsoft said so itself.

    Eight years ago when I first started running Linux, I knew it wasn't ready for the desktop. During the internet gold rush of the late 1990s I knew it still wasn't ready for the desktop. But today it is. There is no turning back now - unless Microsoft manages to lock us out of our PCs [tcpa.org] they will have no chance to reverse the tide, and Windows will lose in the end.

    • by IamTheRealMike ( 537420 ) on Wednesday May 14, 2003 @03:56PM (#5958105)
      In the past, Microsoft has mainly concerned itself with positioning Windows NT based servers against the superior Linux-based products from Debian, Red Hat, and Caldera.

      Windows NT is fading away. Win2003 is a good piece of work from what I've seen/heard - I wouldn't be so fast to declare Linux superior, not any more. If you think Microsoft are just going to sit still while Linux motors on, think again. They move fast too.

      This memo demonstrates an important shift in their strategy: they are now in a position where they are competing against Linux on thedesktop, having lost many key battles on the server side.

      I'm pretty sure Windows has a higher market share in the server side of things (still). Sure, Linux is growing quickly, and it's hurting Windows, but it's easy to forget amidst all the hype that Linux is still the little guy, even after all these years.

      The last bit of the rant I can't agree with either. Desktop Linux is not "ready", where by ready I mean I would be happy giving it to most reasonably intelligent computer users. We're not there yet, the software generally needs more spit and polish, and we need to get software installation really nailed. Too much stuff is just currently plain old broken (menus anybody?)

  • by TopShelf ( 92521 ) on Wednesday May 14, 2003 @02:51PM (#5957443) Homepage Journal
    Courtois also said Microsoft sometimes gave away software to "very low income countries." He cited a program where Microsoft donated software in South Africa and helped train teachers to use it.

    Of course, if MS had charged them full price, they'd be pilloried for contributing to the "digital divide."

  • Jeez. It's like Slashdot is doing everything in it's power to turn into a one-trick show. News Flash: Microsoft Still Doing Things That Piss Us Off!

    Random Businessman 1: "We're doomed! Only a miracle can save us now!"
    Hysterical Woman: "We need Linux! Tux, where are you?? Save us!"
    Random Businessman 2: "Look! Up there!"
    cut to shot of Tux, soaring above city. Tux looks down, smiles and waves
    Chorus of Schoolchildren: "Tux!!!!"

    Yes kids, tune in next week when Tux saves the world from the evil clutches of Microsoft yet again ...

  • Legal? (Score:5, Interesting)

    by quantaman ( 517394 ) on Wednesday May 14, 2003 @02:53PM (#5957469)
    If I recall correctly here in Canada at least it's illegal to sell your product below cost with the purpose of driving your competitors out of buisness. Now this is also traditionally very hard to prove expecially when you take annual licensing costs and support into the equation, and I guess the competitors would have to be some of the distro vendors (Redhat, Mandrake, etc.). Do other nations (US and European nations) have similar laws that might come into play here?
  • Fist o' Sand (Score:3, Insightful)

    It makes sense that the harder they push and the more aggresive they are, that the less business they will get. In case you hadn't noticed, most of the world isn't eactly singing the accolades of the US right now. Part of that can easily be attributed to the arrogant self righteousness of our foreign policy.

    So now one of the US's foremost companies is going to try and squeeze other countries to use their system? Other countries can do little about our government's arrogance, but they sure can do something about Microsoft's!

    Besides which, investing in open source allows them to grow their own in house experts to learn and take care of the software.

  • by Otter ( 3800 ) on Wednesday May 14, 2003 @02:53PM (#5957471) Journal
    Chris O'Rourke, a Microsoft employee, has described attending Linux World, a trade fair in California, where he "purported to be an independent computer consultant working with several K12 school districts," according to his e-mail, which was sent on Aug. 20 last year. K-12 schools include students from ages to 5 to 18.

    "Ha!" O'Rourke wrote in the e-mail to his colleagues, referring to his assumed identity. "In general, people bought this without question ... hook, line and sinker."

    O'Rourke said his goal was to glean intelligence about the competition. His guise, he said, "got folks to open up and talk." O'Rourke did not respond to a fax and voice-mail message seeking comment.

    While I still haven't figured out why I should be outraged that Microsoft's sales force, you know, sells stuff, that bit made me laugh. Like this guy is James Bond, successfully impersonating a consultant. I've worked the KDE booth at Linux conferences, alongside teenagers who know even less about the IT business than I do -- Steve Ballmer himself could walk up to the booth and unless he was sweating and screaming, "Developers! Developers!" no one would recognize him.

    I mean, do Microsoft sales people have horns and a tail? Why would anyone doubt him?

  • Market Neccessity (Score:5, Insightful)

    by DarkBlackFox ( 643814 ) on Wednesday May 14, 2003 @02:53PM (#5957474)
    Seems to me the business/government market has clung to MS for the sole purposes of familiarity and ease of support. Hire any MCSE off the street and you have qualified support personell. Have a problem, call up Redmund and tell them about it.

    Windows has kept essentially the same for the past few years, minus a few "enhancements" (a.k.a. extra features not many people need). This facilitates people turning their heads towards more customizeable software, where a kernel can be compiled for any given specific purpose, and only the required software runs.

    Aside from the incredibly cheap software itself, the unmatched compatibility-for-purpose, and customizability make Open Source a very viable solution for previously proprietary, overpriced, "as is out of box" software. And as potential support people and developers materialize out of the mould, it's getting more and more serious consideration.

    It's just plain sick of Microsoft that they would consider just giving their multi-thousand dollar software away simply to keep market share. Wonder how that would make me feel, if I were a business owner. Knowing I paid $2,500 for an enterprise server, when a friend of mine's business gets it free just so they remain a Microsoft customer. Really would make me consider the alternatives all the more, for fear of getting played like a fiddle by the monster of dominance.
  • by famazza ( 398147 ) <fabio@mazzarino.gmail@com> on Wednesday May 14, 2003 @02:57PM (#5957519) Homepage Journal

    And those are the steps of the passive resistence:

    • 1. ignore - they ignore the problem and doesn't even recognizes it as significant
      2. ridicularize - they ridicularize the resistence as if it would avoid more people to join the movement
      3. worry - they worry and notice that it is really a problem, but it could be easily avoided.
      4. fight - they fight against the resistence with all its power.
      5. lose - they lose the battle and assumes that they must live with the new reality.

    That's the way it has always worked, from Gandhi to Luther King. All we need to do is keep living our lives with Linux (and FreeSoftware).

  • So Obvious (Score:5, Insightful)

    by Jason Earl ( 1894 ) on Wednesday May 14, 2003 @03:00PM (#5957553) Homepage Journal

    The reason that Microsoft is concerned about governments is that they know that governments have the power to set de-facto standards. If a business partner sends me an unreadable document I can probably work something out with him or her. If the government demands that any electronic communication be in a particular format, that's the format that you use. What's more, nearly everyone has at least some business contact with the government. If a government switches to StarOffice/OpenOffice then you can bet that within a few years StarOffice formats will be the standard in that particular country for almost everything. It won't matter that it some ways OpenOffice isn't as good as MS Word, because it is definitely "good enough," the price is right, and it is the format that you need to use to communicate with the government.

    Large institutions are a similar deal. If your University demands that you turn in your assignments in Microsoft Office formats, then you don't use WordPerfect or OpenWriter (or if you do you make sure to double check the formatting with MS Office before actually turning the assignment in. Likewise, if you supply parts to Ford Motor Company and they require that documents you submit be in MS Word format, then you don't use something else.

    Microsoft can't afford to lose these big accounts. If they do their entire monopoly will start to unravel around them. It is far better business for Microsoft to give away software to these key accounts than to lose them to the competition.

  • by Anonymous Coward on Wednesday May 14, 2003 @03:02PM (#5957580)
    Looks like Microsoft has lost all fear of the anti-trust implications of their actions.

    I have to blame our dear president. I don't think he'd allow the Microsoft anti-trust case to go forward no matter how damning the evidence.

    I like some of Bush's decisions, but he really sold out when he told DOJ's trust-busters to dismiss the Microsoft case. It was such a strong case too...

    Bush has lost my 2004 vote over this alone.
  • by PhxBlue ( 562201 ) on Wednesday May 14, 2003 @03:06PM (#5957624) Homepage Journal

    You can't bid lower than zero! Even if Microsoft gives their software away for free, you still have to figure in the time and money you'll have to spend dealing with VBS bugs, SQL Server bugs, DRM bugs--oops, that's a feature--and so on.

    I don't think this strategy is anticompetitive, since Linux is free (beer); but I also don't think it will be all that helpful for Microsoft, even in the short term.

  • by Spyder ( 15137 ) on Wednesday May 14, 2003 @03:06PM (#5957629)
    As a goon in the network brute squad for an enormous and paranoid company, I'm gonna say: How come all of these high level memos get out? Ok granted they've been able to keep their source code contained, but executive memos like this should be at approximitly the same sensitivity level. I could, if I were petty, ask why we should trust security and operation processes from a company that seems either not know what they are, or at least how to follow them. The information in the memo is not a great suprise to any market observer, but it could be, as experessed in other comments, legally damning.

  • Ho-Hum (Score:5, Interesting)

    by 4of12 ( 97621 ) on Wednesday May 14, 2003 @03:07PM (#5957630) Homepage Journal

    So what's the surprise about this? Given the recent SEC filing, there's no surprise.

    A significant step will be if MS decides that Linux is enough of a presence in the low-end server market (the one they're desperately trying to enter so there is some genuine growth of the company) that they decide to forgo the double leveraging strategy of tying products like SQL server, Exchange, and perhaps some parts of .NET so tightly to Windows. You know, like come out with a Linux version of these products to gain market share for them? If Linux keeps growing, then this will happen some day.

    Secondly, the variable pricing strategy of Windows and affiliated software has already been in effect overseas: it's considered so damn expensive that illicit copies are endemic. Another way of viewing it is that people willing to pay zero dollars but pay the hidden cost of enduring the risk of running illicit MS software (what that risk really costs is a matter for insurance actuaries).

    Those warez users have already made their own decision, with MS out of the loop, about the discount they want and what they are willing to pay for.

    Furthermore, if MS clamps down tightly on "piracy" via more sophisticated technical measures, then they may end up losing this base of warez customer that just might possibly in the future begin sending money towards Redmond after they've become addicted to MS ware.

    It's all very strange.

  • These products are "free" like cocaine is "free". Free for the first buy. Free for the second buy. Free as long as it takes for you to be completely addicted and dependent -- then it's a leg and an arm.

    MS will not continue giving it's products away for zero cost to anyone. They will do so long enough to ensure dependency, then charge full price. If they kept on giving it away at zero cost, they'd go out of business, despite everyone using their products. That's obviously not what they want. Their plan is obviously to make governments and citizens dependent on MS software using mechanisms like the Word incompatability fiasco.

    At the very least, all government agencies should require that the formats in which they store information are completely OPEN and FREELY AVAILABLE for anyone to implement.
  • That figures (Score:3, Insightful)

    by matsmats ( 172084 ) on Wednesday May 14, 2003 @03:14PM (#5957713) Homepage
    The Norwegian government resigned last year from their deal with Microsoft for delivering software to the whole administration to look at alternatives. Linux was mentioned as one of the possible ways to go.

    Last week Steve Ballmer visited to have a meeting with the Minister of Administration. The most published result from the talk was that the government get disclosure of the source code. And probably, according to this, got an opportunity to renegotiate for a better deal.

    Just an example. But what it means is that Linux and Open Source gives (large) organizations a hand in negotiating price and conditions with Microsoft. I'm not sure if that means anything to the Open Source Movement at all.

    I'm not even sure if that's good for Open Source. Expensive and closed Microsoft is good for OSS, because that means Linux et al is where to go for open systems. If large corporations (in Norway, the government, military and one large corporation now has access to Microsofts source code) can get to the insides, that means a lot of resources that could go to the public good is kept locked up by MS anyway.

  • by Punk Walrus ( 582794 ) on Wednesday May 14, 2003 @03:16PM (#5957723) Journal
    I work for a very large company that uses thousands of MS machines, and when Microsoft said after Win2K, they would no longer let us site license, we started to look at alternatives. Microsoft said "there is no way to get Product activation disabled, you must account for every computer." They stood to make millions from us, they must have thought.

    So we started a policy that banned XP for "security reasons" and made a sweet deal with Red Hat. Unless you had a valid reason to use an XP product, you used Win2K or Linux. Linux meant that we could use older machines on our server farms and pay virtually nothing because, funny enough, Red Hat gave us a site license for support. Not that we use it (or need to) very much.

    Suddenly, Microsoft "produced" a disk with Product activation disabled (sort of, it's kind of complicated), but claimed all kinds of voodoo like it had a copy protection so complex, we couldn't burn a new one from the master... even sector-by-sector copying. Bollocks. You could use any XP disk, just as long as you followed the directions MS gave us for the "master CD." Now we have a lot of the CDs all over the place, with a site key (and no, I won't give it to you, use Linux and be free) and the "process" to make it work legally by our contract. It took them two years to backpedal that far.

    It's weird, because for so long, Windows was essentially "free" (although, not legally) because until WinXP, more than half the people I knew had "borrowed" an OS CD from "somewhere." Microsoft knew that (I mean, come on), and like a drug pusher, made sure the buyer was hooked before they started charging (my proof is how they made MSIE a dominant browser over Netscape). But it's not that easy anymore. Linux desktops are getting better and better, and while Windows is easier to use for the most part, it's lack of flexibility, anti-customer anticompetitive stance, and their brazen arrogance in the field is really dulling their blade.

    But in this case, I can't fault them for trying to give away freebies, I mean, trade shows do that all the time. But what we should really be wary of is when they get politics involved, and claim stuff like DeCSS is proof that Linux should be banned in the US or something equally as stupid to us techies, but is all greek to your average politician who could be $wayed by $ome other thing$...

    __________________________________________________
    www. [punkwalrus.com] - where else can you get blogged to death?

  • by NZheretic ( 23872 ) on Wednesday May 14, 2003 @03:18PM (#5957743) Homepage Journal
    From Thomas Fuller [iht.com]
    In the face of this competition, the Microsoft documents show the significant resources the company devotes to combat Linux, and the unconventional tactics it sometimes uses.

    Chris O'Rourke, a Microsoft employee, has described attending Linux World, a trade fair in California, where he "purported to be an independent computer consultant working with several K12 school districts," according to his e-mail, which was sent on Aug. 20 last year. K-12 schools include students from ages to 5 to 18.

    "Ha!" O'Rourke wrote in the e-mail to his colleagues, referring to his assumed identity. "In general, people bought this without question ... hook, line and sinker."

    O'Rourke said his goal was to glean intelligence about the competition. His guise, he said, "got folks to open up and talk." O'Rourke did not respond to a fax and voice-mail message seeking comment.

    Another employee, Todd Brix, said he attended a Linux conference in June 2001 in San Jose, California, pretending to be an "ambivalent OEM." Original equipment manufacturers, or OEMs, are companies such as Hewlett-Packard Co. and Dell Computer Corp. that buy Windows software licenses.

    Reached at his office Tuesday, Brix said that when attending such a show, "you don't broadcast that you're a Microsoft person."

    "You don't disguise that fact," he said. "You just don't lead with your chin."

    What O'Rourke and Brix describe is not just "disguising" their association with Microsoft, but is in reality an outright unethical fraud.
  • by gillbates ( 106458 ) on Wednesday May 14, 2003 @03:19PM (#5957750) Homepage Journal
    I hate Microsoft.

    Disclaimer: I'm an IT consultant for a small business using Access as its only DB.

    I've currently got a project that is easily 2 months overdue because of stupid bugs in Access. The worst is this one: if one of the databases becomes corrupted, all of the databases which synchronize with that DB will become corrupted as well. I've actually witnessed databases losing records during a synchronize because some stupid jerk of a programmer at MS thought that the good thing to do would be to delete records to make the tables match. So instead of the good copy filling in missing records in the bad copy, just the opposite happens - good records get deleted from the good copy, and now both copies are bad.

    At this point, it simply doesn't matter if Microsoft gives its software away - consultants like myself are going to charge you so much for working with their bit-trash that you won't be reaping any savings. Honestly, there's a reason why I charge more for MS support, and it's not because I'm greedy, but rather, because I recognize the headaches that it presents to the average developer.

    Quite frankly, I'm getting sick and tired of explaining to my customers that the reason why they're losing thousands of dollars a day in downtime and lost data is precisely because they chose to use Microsoft software. Get clue! - Microsoft does not care what happens to your data; they've already got your money, stupid! .

  • by FyRE666 ( 263011 ) on Wednesday May 14, 2003 @03:21PM (#5957773) Homepage
    ... if you're in a position to help increase Linux' piece of the market, use it! I recently started a new job at a company running virtually all MS kit, but soon realised they were far from happy about the cost of renewing licenses and keeping tag of all their paperwork to prove they'd bought everything.

    There was a glimmer of hope though, a couple of rack-mount linux boxes sitting idle. It was obvious that someone had attempted to set up some services at some point, but given up I presume so they were mostly badly configured or just plain broken. So I set to work in my (brief periods of) spare time. Samba, named, squid, apache, dhcpd, PHP, MySQL, iptables and some other bits and bobs later and just about everyone was impressed at how well they intgrated with the rest of the network. They actually make it much easier to manage the hundreds of Win98/2K PCs in use around the place! In fact, all server replacements/upgrades and additions will now be Linux boxes (currently changing all printing servers over too). I'm no hairy-chinned guru; so if I can manage this, I'm sure plenty of others (especially here) could take some time out to do some good ;-)

    The only hurdle is Exchange, although I'm sure the management would be thrilled to find a "Free" replacement without the quota limits (the version in use has a limit on the amount of disk space that can be used for mail storage, apparently you can pay more for a version with the FILESIZE_LIMIT=xxx constant set to -1 ;-) I've never tried the Linux exchange alternatives, but I'd be interested to hear of anyone who's done this...

    Can't see the desktops changing over to KDE or Gnome, since the software just isn't available for our needs, but in the server room, MS is simply an innefficient and unnecessary expense.
  • by hazman ( 642790 ) on Wednesday May 14, 2003 @03:25PM (#5957812)
    At first glance, this looks like an egregious violation of most anti-trust laws. But digging a little deeper, one must consider that 'Linux', although a competitor of sorts', is not monetarily infringed by Microsoft's actions. 'Linux' doesn't lose revenue by Microsoft taking 'Linux' marketshare. IANAL, but I think anti-trust infringement requires either competitors or customers harmed, generally monetarily for an valid infraction to noted.

    Now if RedHat, a competitor who could be monetarily harmed, were to complain, Microsoft could be held in violation of anti-trust laws
  • by chrysrobyn ( 106763 ) * on Wednesday May 14, 2003 @03:26PM (#5957822)

    Some say this is dumping -- selling their product below cost just to push out a smaller competitor. Sure, it fits that definition, but Microsoft is lowering its price to that of a competitor who is also selling below cost. Alan Cox's labor alone probably ads up to more than a penny on the two debian machines I have right now which would be two more pennies than I spent on their software. (Aside, if each of us sent Alan a penny for each of our servers, how much money would he have?)

    Some are calling this just another unfair tactic, losing money to maintain marketshare. Well, maybe it is, but isn't that what M$ is doing with the XBox? Rumor has it that Sony did it with the PS2 at least when it came out. Numerous other business models do this as well. Maybe Microsoft is turning to a business model where the software is free (under certain circumstances) and they earn their money on the support calls and Must Consult Someone Else certifications? Isn't that the business model all the free software people advocate?

    I don't like Microsoft's history or how they do business, but I'm racking my brains here to find a way that they're evil and my favorite business OS, Linux, is good. All I'm coming up with is either ways to kill Linux accidently or ways that this is a legit thing to do.

    Perhaps there's something to do with how the prices are different? Can it be proven discriminatory, or is it along the same lines as airline seat price differences?

    The best I have is that foreign governments can prohibit or tariff Microsoft OS imports that are under priced because they're being dumped-- when and only when they have local developers working on Linux and consider that flavor to be domestic. Much like the US is doing (illegally due to WTO agreements) with steel.

    Microsoft was evil, in my opinion, when they released IE for free against Netscape's paid-for product. Why is free as in beer Linux good when it's apparently forcing Microsoft to give their OS away for free? Aside from brand hatred of Microsoft, why do I want Linux to succeed? Simply because I can and have modified the source code (but that gets back to it being Free as in libre which I think should stay out of this argument).

    If it's reasonable to cast licensing paranoia aside for a moment, Microsoft appears to be offering those who cannot afford their software the ability to get upgrades for free without having to pay for migrating proprietary code to the Linux platform. If I replaced "Microsoft" with another business name, that would be A Good Thing.

    Can we write a law that refers to the Microsoft business entity specifically and prohibits them from "selling" their product at a loss as punishment for prior practices?

    • by RealAlaskan ( 576404 ) on Wednesday May 14, 2003 @04:58PM (#5958805) Homepage Journal
      If it's reasonable to cast licensing paranoia aside for a moment, ...

      I don't know that it is reasonable to cast aside worries about MS's licensing schemes.

      ... Microsoft appears to be offering those who cannot afford their software the ability to get upgrades for free without having to pay for migrating proprietary code to the Linux platform.

      I'm sure that they would like nothing better than to have it appear thataway.

      If I replaced "Microsoft" with another business name, that would be A Good Thing.

      That would be a deeply insightful comment, EXCEPT: if we were talking about another company, we wouldn't be talking about a company which had been convicted of abusing its monopoly power. Then, we might believe that the object of the exercise was charity, and it would be A Good Thing.

      Unfortunately, we are talking about MS, the convicted monopolist. The MS with a history of rude, rapacious behavior towards customers and competitors alike. The MS which has used all means possible to extend and maintain their monopoly, including `` ... offering those who cannot afford their software the ability to get upgrades for free ... ''. Thus, many of us don't see this as A Good Thing. In fact, we see it as more rude, rapacious behavior.

      The situation is different when it's MS instead of, say, RedHat, because MS is different than RedHat. At some point, automatic suspicion becomes reasonable rather than paranoid. I think that MS and Charles Manson have past that point at least once. So did IBM, before most slashdotters were born, but IBM has come back to the ``safe'' side of that point since MS lead them down an alley and molested them.

      By the way, the postage meter industry is just messy as the desk-top OS industry, except rougher. And except for the fact that anti-trust law worked there, sort of.

    • by GlassHeart ( 579618 ) on Wednesday May 14, 2003 @05:22PM (#5959021) Journal
      Sure, it fits that definition, but Microsoft is lowering its price to that of a competitor who is also selling below cost.

      There's a very big difference. Microsoft is a monopoly in the OS market as determined by a US court, and possibly would be in office suite market as well. This means there are actions that are legal for other companies that are illegal for them.

      In particular, lowering prices below cost is easily used to destroy smaller competitors, because it's essentially a cash burning exercise. The problem is, after the competitor is destroyed, prices will rise back far beyond previous levels to recoup the "investment". The consumers will only get cheaper products for a limited time, and no competition among vendors in the long run. This is a Bad Thing for the consumers, which is why there are laws against competing this way.

      Try to understand that the law is not primarily intended to protect the smaller competitor, but to protect the consumer.

  • by Newer Guy ( 520108 ) on Wednesday May 14, 2003 @03:30PM (#5957855)
    They're protecting their market position in the face of a potential competitor. I wonder how many Vacuum Tube manufacturers scoffed at the transistor when it first came out. Where are they now? Micro$oft is correctly seeing Linux as a threat to their long term OS dominance. Their product may not be too great, but neither was VHS compared to Beta and where is Beta these days? M$ knows how to market...and maybe the OS/Linux community needs to learn how to also!
  • by puppetman ( 131489 ) on Wednesday May 14, 2003 @03:37PM (#5957915) Homepage
    We're in the middle of a nasty registered-mail war with them about licencing of software.

    As a result, more and more of us are moving to Linux (developers can run whatever they want on their machines, so long as they get the job done). No licencing hassles, and no software-asset-management hassles.
  • by Anonymous Coward on Wednesday May 14, 2003 @04:48PM (#5958717)
    Look: as a Linux user and open source developer, I like to bash Microsoft just as much as anyone. Their business practices are at best unethical, and at worst, flagrantly illegal. Over the past few years I have come to rely (in part) on Slashdot for its irreverant and challenging views on the Microsoft Monopoly. Say what you will about Slashdot's editors (poor spelling and grammar, blatant editorializing on a so-called news site, etc), but I really have come to believe that Slashdot represents an important and much-needed voice among today's corporate hype-driven media.

    Until now, that is. While helping my 16-year-old son (also an avid Slashdot reader) do research for a term paper on technology and journalism, I stumbled across some information that made me change my views about Slashdot completely. In a nutshell: Slashdot, and more accurately, its parent company VA Software, has deep and mutually influential ties to the Microsoft Corporation. In fact, Slashdot's own editors are paid (albeit indirectly) out of the coffers of Microsoft.

    Yes. It's hard to believe. At first I couldn't believe it. But a few simple Google searches and 45 minutes' research on Lexis-Nexis (as well as a couple of phone calls to a friend of mine at the SEC) revealed the following:

    • Three of the eight directors [vasoftware.com] at VA Software also sit on the board of a privately-held company called Murberry-Slocomb, which as far as I can tell is some kind of stealth incubator/VC firm. Murberry Slocomb was founded in 1996 by none other than Paul Allen, and is a subsidiary of Allen's company Vulcan Ventures [paulallen.com].
    • Most (>80%) of Murberry's funding, including compensation for its directors, comes directly from Microsoft Corporation.
    • In 1998, VA Software (parent company of OSDN, which is the parent company of Slashdot) receieved an investement of $3.8M from Murberry-Slocomb.
    • The 1998 annual report for VA Software actually mentions this, and goes on in detail about how this infusion of capital has helpled them maintain and operate OSDN.


    At first I was more amused than shocked; I mean, the technology industry is notoriously incestuous and its leaders, even those who are in competition, often sit on the same boards and are members of the same organizations. So what if a few board members of Slashdot's parent company are also directors of a company funded by Microsoft? Well, it gets more interesting.

    As it turns out, in May of 1999, VA Software submitted to the SEC Form 5506-D, Application for Direct Non-Ownership Subsidization. [sec.gov] This is the form that a corporation will submit to the SEC when it wants to directly fund a subsidiary from its own parent corporation. (It's basically a tax shelter for companies with a lot of subsidiaries) The application was approved in July 1999. The applicant name? OSDN. In other words, Form 5506-D basically eliminated the middleman between OSDN and Murberry-Slocomb. Following the money, I now saw that OSDN was being funded directly from an infusion of captal that Murberry-Slocomb has receved from Microsoft!

    Weird. I know. But what does this all mean? Honestly I have no idea. I'm not the custodian of any privileged information. A look at VA Software's web site and a Google search is all anyone needs to find the same information that I found. Are Slashdot's staff being paid through Microsoft? I sincerely hope not. But the facts are there and it sure looks like it. More importantly, what does this mean for the future of Slashdot? Can any grain of objectivity or journalistic ethics be preserved? What happens when the company you are bashing, nay, the very company that you preach the loudest against, Microsoft, is the same company that signs your paycheck? Could there be a deeper link still? Who knows. As far as I'm concerned, I'll never look at Slashdot the same way, ever again.
  • by MarkRH ( 629597 ) on Wednesday May 14, 2003 @05:28PM (#5959075) Homepage
    Lost amongst all of the discussion about Microsoft's tactics is a realization that this kind of story may vanish in six to nine months, when Microsoft's Rights Management Server begins selling (and is used by Microsoft itself, no doubt).

    Microsoft's RMS, in conjunction with Outlook, would prevent emails from being forwarded or printed by individuals who had not been preapproved by the sender. (And methods like "Print Screen" don't work, either.) Obviously, this becaomes even harder to crack once Palladium/NGSCB takes effect in 2005.

    It was interesting listening to the NGSCB presentations at WinHEC. All I heard were MS employees describing how NGSCB would prevent company secrets from being leaked. Given the context of this story, is that a good or bad thing?

"What if" is a trademark of Hewlett Packard, so stop using it in your sentences without permission, or risk being sued.

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