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Microsoft's Software Philanthropy: The Goodwill Ploy 602

bethanie writes "The New York Times has printed a story concerning Microsoft's plans to 'significantly increase its donation of software to the nation's nonprofit organizations, to a level that may approach $1 billion annually in the next three to four years. ...But the increase has also drawn objections from developers of 'open source' programs (programs for which the source code is freely distributed). Those critics say they believe Microsoft is using a giveaway strategy to undercut the so-called free software movement in the potentially promising nonprofit market.' What do you think? Is it true philanthropy or just another tactic to assimilate everyone into the MS collective?"
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Microsoft's Software Philanthropy: The Goodwill Ploy

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  • Both (Score:3, Insightful)

    by konichiwa ( 216809 ) on Monday May 26, 2003 @07:52PM (#6042883)
    When you're one of the richest companies on the planet, "philanthropy" always has an aim.
    • More than both (Score:5, Insightful)

      by That_Dan_Guy ( 589967 ) on Monday May 26, 2003 @08:08PM (#6043010)
      More than Both. If they can get:

      1. Tax credit
      2. Press (preferably good press)
      3. Good will of the charities.
      4. Make themselves feel like good giving citizens
      5. AND keep Open Source from gaining mindshare

      They win all the way around, and without costing them a dime. I mean really. Charities can't afford 200 dollar Operating Systems and 3 or 400 dollar Office Suites, let alone the people who know how to maintain it.

      Which brings a potential 6th benefit for MS:
      What if it crashes and these charites don't know how to reactivate it? Uh-oh, they might end up having to go out and BUY a new copy! Meaning more profit for Microsoft.
    • Re:Both (Score:2, Insightful)

      it doesn't matter here at slashdot... MS can't do a thing without getting bashed. If they do something good, you'll say "well it's just an attempt to do this and that".

      i wonder what'll happen if/when MS becomes open source. /. will say 'oh, it's another attempt to monopolize the industry"
    • Re:Both (Score:4, Insightful)

      by Bunji X ( 444592 ) on Monday May 26, 2003 @08:32PM (#6043155)

      And it isn't like they are giving away $1 billion in cash. They are giving away the worth of the costs of CDs enough to store software worth $1 billion.

      The second thought that pops into my head - will the upgrades be given away too?
    • Who Cares? (Score:5, Insightful)

      by mnelson ( 17017 ) on Monday May 26, 2003 @10:11PM (#6043830)
      I think the question should really be "Does it matter?" I can't speak for anyone else who uses Free/Open Source Software, but I did not start using it just to "kill Microsoft."

      Now, I'm no big fan of MS, but even if they give everything they make away for free for the next 10 years (which I believe they have the cash on hand to do...), I will not trade in my Linux box. I believe the Bazaar model will win, in time, not because it is cheaper, or trendy, but because it simply makes more sense.

      But I'm not on a mission to force FS/OSS down everyone's throat, either. Face it, many of these non-profit groups don't have a geek on hand, and the "gift," strings attached or not, will help them do good for the community they support.

      If you don't want to see your favorite charity using MS software, get active! Volunteer at their center to install and support their software. Don't sit on /. and complain that the Big Bad Evil Empire(tm) is being sneaky.

      And if, by some miracle, MS suddenly starts giving away all of their software for free, opens their file formats for all to use, cleans up their security, kills off their bugs, becomes a responsible member of society, and everybody's best friend in the software world, didn't we win after all?
  • In other words.... (Score:5, Insightful)

    by Anonymous Coward on Monday May 26, 2003 @07:53PM (#6042894)
    "What do you think? Is it true philanthropy or just another tactic to assimilate everyone into the MS collective?"
    • What do you think ... is it a newsworthy slashdot story, or is it just another opportunity for the Slashdot community to bash their favorite whipping child.

    • Or yet another cheerleader comment opportunity to favourably impress the MS job interviewer? GAWD, the astroturfing /. is getting from Redmond is unbelievable!
    • by jc42 ( 318812 ) on Monday May 26, 2003 @08:31PM (#6043154) Homepage Journal
      Last October, /. had an article [slashdot.org] on the topic. This described a fairly blatant case of "donating" a lot of software that couldn't run on the schools' computers unless the schools paid for expensive upgrades. The cost of the upgraded would have been much more than the claimed (i.e., retail) "value" of the donated software.

      This is an old ruse. Before Microsoft, IBM used similar "gifts" to both tie schools into IBM hardware and make them pay for upgrades that the schools wouldn't have bought otherwise.

      It's called "marketing".

      Keeping the competition out is just part of it. Giving away freebies that require the mark to then buy something even more expensive is an old technique that long predates the existence of computers. When you buy a cheap laser or bubble-jet printer that then requires expensive ink cartridges every month, you are falling for the same tactic.

  • by Michael's a Jerk! ( 668185 ) on Monday May 26, 2003 @07:53PM (#6042895) Homepage Journal
    A good read is here [dslreports.com]
  • by NeoSkandranon ( 515696 ) on Monday May 26, 2003 @07:54PM (#6042902)
    "The first one's free"
  • by Faust7 ( 314817 ) on Monday May 26, 2003 @07:56PM (#6042912) Homepage
    ...how "free" undercuts "free"?

    When both prices are nil, what's left to compare but individual merit and the availability of technical support?
    • by ottothecow ( 600101 ) on Monday May 26, 2003 @08:01PM (#6042952) Homepage
      Open source alternatives are not necessarily free.

      A price could still be charged for the software (albiet less than microsoft) and the company could offer enhanced support at an added cost. Microsoft giving away its software means it is cheaper than even the open source alternatives and if it is available, orginizations may not even begin to research alternatives.

      Its not free vs free, its free(but used to be expensive) vs free (in concept, but lower in cost), that is why microsoft would be undercutting the open source alternatives

    • by Otter ( 3800 ) on Monday May 26, 2003 @08:24PM (#6043117) Journal
      ...how "free" undercuts "free"?

      Because at $0, a familiar OS and applications readily that doesn't require Unix expertise might beat having to figure out why devfs isn't finding my fucking IDE Zip drive, while at $1200 for Windows, Office and utilities, cursing devfsd.conf seems more cost-effective.

      I suppose technically that might not be "undercutting" but that's getting into hairsplitting.

    • by mosch ( 204 ) *
      Well, it undercuts it because it leverages a monopoly.

      But I don't think that's the game here anyway. I think there are two games being played.

      Game one: The tax write-off. Give away a billion dollars of software, reduce your corporate tax liability by 390 million or so.

      Game two: The support calls. When the free software breaks, start charging the famous Microsoft $300/incident fees.

  • Deductions, baby! (Score:5, Insightful)

    by vegetablespork ( 575101 ) <vegetablespork@gmail.com> on Monday May 26, 2003 @07:56PM (#6042913) Homepage
    Can MS donate a copy of Windows, that cost marginally a few cents to produce, and take a deduction against its corporate income for the full retail value?

    Of course, if the scuttlebutt is that MS uses other loopholes to dodge all its taxes are true, then it's a moot point.

    • by mijok ( 603178 )
      Simple answer from an MBA student: No.
      What you pay taxes for is: revenue - all costs
      And retail value isn't a cost at all (the only thing that is, is the cost of the physical media). To "optimize" your taxation (ie. so that your shareholders's wealth after taxes grows as much as possible) you pay suitable amounts of dividends (cost of capital you know...) before taxes. What else you're allowed to deduct in taxation varies in different countries - iirc. at least in some states in the US you're allowed to d
      • Re:Deductions, baby! (Score:5, Informative)

        by tekunokurato ( 531385 ) <jackphelps@gmail.com> on Monday May 26, 2003 @08:19PM (#6043072) Homepage
        Simpler answer from a business undergrad-

        There are federal standards associated with tax writoffs of good donations to nonprofit firms that dictate that relatively small amounts, on a revenue basis, are tax deductible. Microsoft will be able to write off revenue from some, but not a very significant portion.

        More importantly, I responded because dividends are NOT pre-tax, they are paid from after-tax retained earnings. This is a very basic accounting rule and is important in many financial issues, from capital structure to the potential elimination of US dividend taxation.

    • Education baby! (Score:5, Informative)

      by tshak ( 173364 ) on Monday May 26, 2003 @11:32PM (#6044419) Homepage
      I know most people don't study or have a clue about business on /., so let me challenge your conspiracy theory with, "No, MS can not get a tax writeoff for a $1000 Windows Server License", simply because a tax writeoff has to do with cost, not potential revenue.
      • yes, but... (Score:4, Informative)

        by g4dget ( 579145 ) on Tuesday May 27, 2003 @02:53AM (#6045396)
        A lot of these Microsoft "donations" are not pure software donations. Rather, Microsoft donates money but imposes obligations that effectively require the recipient to buy a lot of Microsoft products in the market. That kind of "donation" may end up being tax deductible.

        Hey, there is a long tradition of that. The US does something similar with foreign aid, "giving away" billions of dollars but requiring purchases of US goods and services.
  • But to be honest if Microsoft didn't give away the money, people would be crying and moaning about that.

    As much as we all hate the evil empire, for them it's damned if they do, and damned if they don't.

    Look at it this way, the money is going to worthwhile causes, be happy it's doing someone other than a rich investor, or evil Bill himself, some good.

    • "ut to be honest if Microsoft didn't give away the money, people would be crying and moaning about that."


      The story is not about M$ giving away money, it's about M$ giving away software. The tax deduction that M$ gets is quite a bit greater that the cost to M$, so M$ (as usual) makes out like bandits. If M$ had been giving away cash it would be a different story.
      • just to be upfront, I'm going to say the same thing twice.

        but it's a billion dollars that those companies didn't have to spend to buy software. therefore they are able to use the money for more urgent and important things.

        and before anyone uses the excuse, "but they could of had it free all along", the learning curve (and training) between open source OSes and MS OSes is obviously night and day.

        why retrain someone to use new software, when they may already be familiar with the software they have at home
    • by theCoder ( 23772 ) on Monday May 26, 2003 @08:23PM (#6043109) Homepage Journal
      That'd be nice if they were actually giving money. They aren't. They're printing "money" in the form of CDs and giving that away. Then they say that they gave millions or billions to non-profit organizations when in reality they maybe spent a couple thousand. But they can claim millions in tax deductions.

      In reality, they're hurting the non-profits more than helping them. by accepting the 5 copies of XP (or whatever), the NPO is opening itself up to more liability (BSA thugs). In addition, by getting the NPO's hooked on the particular product, they will be more likely to purchase more products from MS in the future (not that other companies don't do that, it's just not entirely altruistic).

      But what really upsets me is that the donations of software (all proprietary software, not just MS) to NPOs is like delivering a big can of trash to them. I don't say this because I'm biased against proprietary software, I say this because the software has no resale value for the NPO. If I donate something physical to a NPO and they have no use for it, they can at least sell it to someone else and get some money to help their cause. But they can't do that with donated software (or at least it's really hard). So if an NPO gets 5 copies of Windows XP, but doesn't have any use for them (maybe all their computers are too old), they now have 5 coasters, and MS can take $1000 in tax deductions.

      If MS wants to give billions in cash to NPOs, that's great. A true example of good corporate citizenship. But if their donations are software that they can donate with very little cost, that's pretty deceptive. They should really claim their donations in resale value, not the manufacturer's suggested retail price.

      • Let me tell how it really is -- I'm the Director of I.T. for an NYC-based non-profit, high-end, very prominent. Your comments about MS hurting me more are pretty offensive, and wofeully uninformed. By the way, I'm a UNIX guy, I've been an admin, an engineer, all the way since 0.99pl4 so you're preaching to the choir about open source. But reality is different.

        In the non-profit world, budgets are so slim as to be non-existent. You're working on yesterday's technology (for the most part), you cobble together
    • by WIAKywbfatw ( 307557 ) on Monday May 26, 2003 @08:24PM (#6043113) Journal
      Microsoft isn't giving away money, it's giving these charities a limited number of free licenses for its software.

      No doubt, this donated software has strings attached, just as similar Microsoft donation have had in the past. Only last year, on this very website, I remember reading about the company "donating" copies of Office to a charity in a poverty-ridden African nation on the condition that the same number of copies of Windows were bought to run it on.* And I can recall other examples before that one too.

      Almost without exception, Microsoft's donations are targetted to meet Microsoft's long-term goals. A few licenses here, a few there buys Microsoft lots of positive PR ("hey, look at how nice we are to the little kiddies") but anyone who thinks that the company's motives are purely philanthropic is living in cloud-cockoo land.

      Microsoft is a company that has billions in the bank. The amount of good it could do with even a fraction of that wealth is unimaginable. Calling the giving away of its own software charity is a joke. Using some of its significant cash reserves to wipe out a large chunk of Third-World debt - now that would be real charity.

      (*It seemed to be oblivious to the relevant marketing/public affairs people at Microsoft that a cash-strapped charity in a Third-World country didn't have the kind of resources to afford one copy of Windows to install on the recycled machines that it had luckily procured, let alone ten or twenty. Sometimes, people who think nothing of paying $2 for a cup of coffee seem to be really thick when it comes to visualising how the other half lives.)
  • by Phizzy ( 56929 ) on Monday May 26, 2003 @07:56PM (#6042917)
    They're going after markets that don't have much money in the first place. They realize internally, though would never admit, that giving away software to people who wouldn't buy it otherwise doesn't cost them money. Externally, they'll say how they're doing such good things, and say how "We gave away a billion dollars in software last year.", but that wasn't a billion dollars that they could have had otherwise.

    This is basically the same as the RIAA giving me a bunch of MP3 files of music I wouldn't have bought anyhow and claiming they gave me a thousand dollars of music.

    Or like me saying I have a baseball card that's worth $100,000. It's only worth that if someone will buy it. If no one will buy it, then it's a piece of cardboard with a picture on it.

    The moral of the story is that they're giving away something that costs them nothing to a market group that wouldn't have bought their stuff otherwise, and keeping Free software out.
    • The moral of the story is that they're giving away something that costs them nothing to a market group that wouldn't have bought their stuff otherwise, and keeping Free software out.

      How would they be doing that, unless they threw in a condition that forbade that group to use Free Software? I see nothing like that mentioned in the NY Times story.
    • I work for one of these non profit (missionary) organizations, and I think I can safely say that if Microsoft didn't do this for us, we wouldn't be able to do much of anything at all.

      I'm writing code for a program that is targetted at computer illiterate users, often with machines that were donated to them and these machines are almost exclusively Windows machines.

      The simple fact of the matter is, end users who lack technical know-how would be simply throwing their hands up in despair if they had to work
      • I'm writing code for a program that is targetted at computer illiterate users, often with machines that were donated to them and these machines are almost exclusively Windows machines.

        The simple fact of the matter is, end users who lack technical know-how would be simply throwing their hands up in despair if they had to work on linux machines. And "tech support" is on the other side of the world and would require a satellite phone call.

        And yet, these totally and completely computer illiterate people w
    • JOHN MARKOFF's [takedown.com] article was dissapointing. He applied lots of critical thinking to free software advocate's fears but his research was shallow and he missed the bigger picture of dump, entrap, extort and how this might apply to the tiny "charity" market. The main points made were (all direct quotes):
      • Everyone needs Microsoft tools.
      • Microsoft is the standard
      • {Microsoft] software has more features than open-source software
      • Maybe this is paranoia
      • this is a case of no good deed going unpunished

      Any user of a

  • If the organizations they are giving the software to are allowed under license to resell them, then I'd have to say I'm impressed with Microsoft's generosity. Otherwise... yeah, it's probably just a ploy as the value of anything decreases with its diminishing level of scarcity.

    Since there is no such thing as scarcity of Microsoft software, the value is obviously low. Other factors acting on the value of Microsoft software, of course, is demand... the problem is people are demanding software fixes and are
  • by I Am The Owl ( 531076 ) on Monday May 26, 2003 @07:58PM (#6042931) Homepage Journal
    "Those critics say they believe Microsoft is using a giveaway strategy to undercut the so-called free software movement in the potentially promising nonprofit market."

    Did somebody forget to proofread this article before posting? That makes no sense - how in the fuck can you undercut a free product? How is such a market "promising" if no sales are made? How is there even what could be called a "market" for something that is free? Doesn't one have to buy or sell in a market?

    I think the Free Software people are just jealous because Microsoft, too, figured out that giving away their software for free is a good idea. God, it's like you people want to see non-profits be deprived of choices or special benefits in the market. Truly the mark of a zealot - you people were probably the same people who wanted to see Skylarov kept in prison so he could be the test case for your DMCA challange.

    • I think the point that the author is trying to make is that Microsoft isn't trying to win OS market share in this move, instead they are looking to build a larger user base for other product (read: MS Office et al.)
      I personally don't see how them giving it away for free is beneficial in any other way. However, as it is being given for free, the issue becomes how does an already free OS compete with the FUD that Microsoft offers when price is no longer a debate? Security comes to mind, but security has al
    • by Black Parrot ( 19622 ) on Monday May 26, 2003 @08:14PM (#6043048)

      > Did somebody forget to proofread this article before posting? That makes no sense - how in the fuck can you undercut a free product?

      The point is that Microsoft can only maintain its monopoly in the for-pay sector if it maintains the illusion that it's the standard. This "offer" is exactly like the 90% discount for Munich: if word ever gets out that the free stuff is good enough for organizations, Microsoft is fuxored.

      They aren't any more worried about loss of revenue in this market than they are about loss of revenues from Munich. They're worried about a paradigm shift in the way the world acquires its software.

    • It's because Microsoft isn't giving away software. It's giving away limited (mostly time-limited) licenses to software. There's no certainty that they'll extend the license next time.

      An organisation makes a substantial investment into IT above and beyond the cost of purchasing software. People get skilled up, you go and get other software to interact with the software you were given (especially if the software you were given was an OS), and you generally build up an infrastructure, which makes you dependan
    • How is such a market "promising" if no sales are made?

      People normally mix up market share and installed user base, primarily because installed user bases of software tend to do things like upgrade on a semi-regular basis. So, if Linux has a 5% installed use base, then those people will continue to "buy" Linux until they move to something else (on average).

      How is there even what could be called a "market" for something that is free? Doesn't one have to buy or sell in a market?

      You're thinking too narr

  • Does Seeding Work? (Score:5, Insightful)

    by Davak ( 526912 ) on Monday May 26, 2003 @08:00PM (#6042950) Homepage
    I have always wondered if seeding an OS out in the world really helps business all that much. I agree that it makes common sense; however, I have never seen the proof.

    For example, Apple flooded the school systems 15 years ago with pretty good little systems. They were used to teach typing, accounting, and basic computer skills... What did all that effort earn Apple?

    Not much in my opinion. Maybe it always works... maybe the Apple episode is the exception.

    Risking Karma here... I am predominately a windows user; however, I cheer for linux as much as humanly possible. I think the competition is wonderful for the consumer and the market.

    • by PCM2 ( 4486 ) on Monday May 26, 2003 @08:21PM (#6043089) Homepage
      For example, Apple flooded the school systems 15 years ago with pretty good little systems. They were used to teach typing, accounting, and basic computer skills... What did all that effort earn Apple?
      Well, in any article that mentions Apple's key markets, education is always foremost. I'd have to imagine that Apple's outreach programs to the education market have something to do with that.

      I agree with the other posters, though -- unless Microsoft tries to use some kind of licensing muscle that tells the nonprofits they can't use free software at the same time, then there's no harm done here. It's just tax write-offs and some good PR for Microsoft.

  • by westfirst ( 222247 ) * on Monday May 26, 2003 @08:01PM (#6042953)

    Chapter 12 of Free for All [wayner.org] analyzes the differences between Microsoft's version of charity and the open source's version. It sort of anticipated this debate by a few years and it also asks the very interesting question about tax deductions. Just how much did M$ write off for these deductions? The full cost of the software? The list price? Or just the amortized cost of development? Or perhaps the most honorable, nothing at all. That's how much the FSF takes off their taxes.
  • Tax writeoff. (Score:5, Insightful)

    by rusty0101 ( 565565 ) on Monday May 26, 2003 @08:03PM (#6042967) Homepage Journal
    While at some level it is possible that Microsoft will be donating "value" to the organizations involved, the value has nothing to do with the actual cost of the software.

    As far as the packaged software is concerned, a copy of Windows (any version) Office (any version) or any other piece of software Microsoft donates to charity, the cost is the raw material involved in the package, and the cost of duplication for the content. Also by donating copies of software packages to charity, they bring down the total cost of production per unit.

    The 1 Billion dollar value, per year, is far more likely to be related to the MSRP price Microsoft puts on the product, than on the material cost.

    While I am sure that a part of this has to do with Microsoft doing just about anything in it's power to undercut it's competition, (which does include Open Source Software these days) it is also potentially valuable to them in that so far the company has been able to escape taxes in a number of ways. This provides another way for them to write off proffits that they would otherwise have to claim when it came time to file State and Federal taxes.

    Perhaps of more concern is the fact that by using these applications, charities are going to be locking themselves into a proprietary set of file formats that they may not later be able to extract information from without Microsoft's blessings.

    Then again, that's just my opinion. I have been wrong before, it will probably happen again.

    • Re:Tax writeoff. (Score:3, Interesting)

      by dirk ( 87083 )
      As far as the packaged software is concerned, a copy of Windows (any version) Office (any version) or any other piece of software Microsoft donates to charity, the cost is the raw material involved in the package, and the cost of duplication for the content. Also by donating copies of software packages to charity, they bring down the total cost of production per unit.

      Why would this be the case? When other companies donate material to charity, they are donated the cost is figured at the market cost (i.e.
  • Its all for TAXES!!! (Score:3, Informative)

    by Admiral Llama ( 2826 ) on Monday May 26, 2003 @08:04PM (#6042971)
    Donations are tax deductable. Theoretically, if they donate enough, they'll eventually wipe out all their taxable income.

    "Sure Mr. Elementary School Principal, every one of your students needs XP Super Advanced Enterpri$e on their desktops. Let me just fire up the printing presses!"
  • by jest3r ( 458429 ) on Monday May 26, 2003 @08:04PM (#6042979)
    lets face it .. the vast majority of these organizations are probably using pirated copies of office .. or whatever else they could not afford .. so if faced with the choice piracy vs. donations i think donations is a pretty good option.

    the question we should be asking is what is making linux so inacessable to all of the masses that are running a pirated copy of winxp and office xp on their build your own box ...
  • Tax deduction (Score:3, Insightful)

    by bloosqr ( 33593 ) on Monday May 26, 2003 @08:05PM (#6042982) Homepage
    The part that worries me about this is the tax deduction they get from doing this. My understanding of this is that traditionally (or otherwise) companies get the full value tax deducted off of their expenses. That is the "1 Billion $" of virtual licenses "given" away to people who would otherwise not buy your software provides a huge tax writeoff. As software isn't made of "tangible assets" in the same way that hardware is a tangible asset, this would be an easy scam for many software companies to pull to avoid paying any taxes. (Though MS doesn't pay any tax for other reasons)

  • Of course its true philanthropy. I can picture Gates and Ballmer reading the software news, misty-eyed, about school-children being forced to write homework assignments in EMACS, to do their math in octave, navigating an archaic command-line system, disoriented and trembling in their confusion, while the rival school-kids, using Windows, with their talking paper-clips to help them, are already finished with their schoolwork and playing polo out in the schoolyard with their chums.

    Gates and Ballmer cannot bu

  • What's the catch? (Score:2, Interesting)

    by thirdrock ( 460992 )
    What is Microsoft's definition of 'give away'?
    Do they mean -
    - A charity/NPO can obtain a master CD which they can install on as many PC's as they like, forever more?
    - A charity/NPO will be able to download the latest updates, the latest operating system and the latest features at no cost into the forseeable future (say 100 years)?
    - A charity/NPO will be granted total exemption from licence tracking and auditing into the forseeable future?

    No? Perhaps they mean.

    - We will give away our software and do whatev
  • by jpellino ( 202698 ) on Monday May 26, 2003 @08:07PM (#6043007)
    i need to keep 2 dozen PCs at school up to date - they're all donations, they have whatever OS the giver had, I need them all to be on a par so kids can go from one to another without a brain freeze, and though a part of me wishes they'd play fair on a lot of other things, this seems like it's more needed than evil.

    apple has been known to give the OS at a significant discount to teachers, i'm surprised they made a stink.

    plus how long would i be working there if i told the boss 'we can get this for free, but on principle i'll just run down to staples and pick up 24 of them at the sell thru price...'
  • free... it's the 2nd one (upgrades, in this case) that will really cost ya...
  • by lingqi ( 577227 ) on Monday May 26, 2003 @08:09PM (#6043017) Journal
    I worked for a non-profit organization once.

    For an organization of about 100 (maybe more) people, there was exactly ONE IT admin, plus one intern like myself.

    Sad thing is, though, neither MS nor OSS, to me, provides the best solution - because non-profits are usually so cash strapped - which turns to be people-strapped, time-strapped, etc.

    I remember back then we tried to set up a whole slew of services (this was before MS BackDoor erm BackOffice) came out - and tried to put almost the entire line of MS servers onto one NT4 machine. needless to say, the thing would crap out just sitting there idle. (and these were donated software. sorry to say but MS has been donating to non-profits for a loooong time, for good or bad)

    With that kind of instability (and we can't afford shiny new dells, so we get all the systems either custom build very cheaply, or get donated used ones), MS servers won't do. Maybe now it's better, but with the kind of system requirements, I seriously doubt we can run XP / 2k Servers.

    However, i don't really think linux would really do either - because user-support is the rest of the spent time when the IT group (the 1.5 person - one admin and the part-time intern) isn't fiddling with junk. And I just can't see any possibility in training 75 year old gradma's (seriously - some of them really were!) to do any new computing technology within any kind of resonable timeframe. I am sorry to say, guys, KDE and GNOME is not the easiest to figure out, and certainly not the easiest to teach. The UI design does not follow a strict standards across OSS software (okay, to me anyway), so that causes a lot of problems.

    I personally think that if Apple gave us a huge slew of over-stocked iMacs, we'd been all set. I think macs tend to last a lot longer than PCs (average life span, anyway - maybe it's due to the higher per-unit cost?), but doesn't degrade into pitifulness nearly as fast; even right now the first-gen iMacs, I think, are still usable. And yes, Macs are more intuitive UI-wise.

    But that never happened, so when I left, the lone IT admin was still holding back the fire, in the most endless, swamped way...

    Okay, I am sure that was related somehow, though not sure HOW exactly.
  • by djupedal ( 584558 ) on Monday May 26, 2003 @08:10PM (#6043019)
    And when BG does it, it's not philanthropic....not by a long shot. It is self-serving...and not in a karmic kind of way, either.

    Philanthropy: The practice of helping people in need. Nothing there about it being a business practice!

    When there are strings attached (and w/MS there are always strings), it's called 'manipulation'. Some may recall when one of the suggested penalties after MS was convicted, was for them to give away software? Hardly a penalty, and everyone knew that, including MS.

    Remember, investing in MS is risking having your own resources used against you.
  • by DreadSpoon ( 653424 ) on Monday May 26, 2003 @08:10PM (#6043022) Journal
    They'll be forced into an upgrade cycle. They'll be forced to buy all the little extras it takes to bring MS systems up to level with other systems. And so on. A big donation looks nice and free to the clueless, but once you get into what else you need to actually get work done, the price of the OS and basic software (heck, even just Office) isn't even close to your total cost.
  • Microsoft is the beneficiary of this. The software will be given away, and then MS will take a tax deduction (they MUST take it, or face a shareholder action).

    It doesn't cost much to "make" the software, so MS will be laughing to the bank. Which is a good thing (speaking as a MS shareholder).

    As far as philanthropy goes... it's really nothing. I have to admire Open Source developers, who give away time. And don't get a tax break for it. I WISH I could get tax back for time contributions to worthy projects.
  • ...eventually you pay the price. Free software is always free, but microsoft software is only free when they say it is, and never thereafter. I doubt that they are giving away their tech support, for example. It's like giving away 1,000 free tickets to Disneyland, but you still charge for everything once inside.
  • OSS gives away billions of dollars worth of software every day! They give it to schools, universities, small businesses, large corps, non-profits, people (like me), governments, etc. Most of this is commercial grade software such as; gcc, Linux, Apache, etc. Now that is Philanthropy!
  • Sigh ... (Score:3, Insightful)

    by Rosco P. Coltrane ( 209368 ) on Monday May 26, 2003 @08:14PM (#6043046)
    assimilate everyone into the MS collective ?

    You post your story on Slashdot, so why do you have to ask ?

    Yes, everybody knows Microsoft is evil, wants to take over the world, and that Bill Gates wants to stick fireants in Linus' and RMS' underwears.

    Yes, everybody hates Microsoft, that Windows users are all stupid, that Linuxers have discovered the Virtuous Path.

    Yes we know that Microsoft pulls the SCO puppet strings, that they make evil deals with the MPAA and RIAA.

    Yes, we know all that by now, Slashdot crew. Can we move along now ? why do we have to read the same Microsoft articles with world-domination overtones over and over again ?
  • by defile ( 1059 ) on Monday May 26, 2003 @08:14PM (#6043047) Homepage Journal

    NEW YORK, Monday -- Responding to Microsoft's announcement to donate $1 Billion in software to non-profits, Netgraft Corp [netgraft.com] aims to one up Microsoft by announcing a $20 TRILLION software giveaway.

    Microsoft's move has been criticised by many in the free software community as an attempt to stifle [free software] adoption. "They're using their influence and might to suppress what is clearly better software. Well, as a company that earns its bread and butter promoting free software, we felt it would only be right to give our free software away as well", said Michael Bacarella, the company's founder and Chief Technology Officer.

    Effective immediately, the company will make its award winning TCP connection forwarder, tcpfwd, which normally retails for $5,000,000 per copy, freely available from its web site at http://netgraft.com/tcpfwd.c under the terms of the GNU General Public License.

    "No one has ever attempted this before", he continues, "but my hope is that in doing so, we can show the world that free software can beat proprietary software vendors, no matter what stunts they try to pull."

    Netgraft Corp will end the giveaway program for tcpfwd once it surpasses 4,000,000 downloads, which would retail for $50 trillion.

    "And it's not just for non-profits. tcpfwd is available to all, for-profits, students, and so on. Share and enjoy." concludes Mr. Bacarella.

    Microsoft did not immediately return comment requests.

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

    by Sanity ( 1431 ) * on Monday May 26, 2003 @08:19PM (#6043071) Homepage Journal
    ...Free/Open Source software advocates have been claiming for years that Open Software is superior to Microsoft's offerings in more ways than just price - yet now you want to complain when Microsoft tests that assertion?

    As for wondering whether Microsoft is doing this for philanthropic reasons - the simple answer is "of course not". If I was a Microsoft shareholder, I would want to sack any Microsoft board of directors that used the company's resources for anything other than increasing the bottom-line.

  • by Demerara ( 256642 ) on Monday May 26, 2003 @08:20PM (#6043083) Homepage
    Bill (and Missus) Gates received and deserved praise for their significant contribution [gatesfoundation.org] to the eradication of malaria.

    At face value, the donation of expensive software to not-for-profit organisations is a good thing.

    On reflection, however, this is how they destroyed Netscape - they gave away Internet Explorer free, as in beer (okay, TCO budgets aside).

    Verdict? Too soon to say. Applaud the effort, monitor the effects.
  • Poor bastards (Score:3, Interesting)

    by Lurgen ( 563428 ) on Monday May 26, 2003 @08:21PM (#6043088) Journal
    These guys just can't win. They get slagged off in the media for not contributing to schools (for not allowing the transfer of licenses, not offering free licenses to charities, etc).

    Now they give in, do the right thing, and give the stuff away and they get in trouble for that!

    If Microsoft stuff is free, and OSS stuff is free, surely the better product will win in that market sector? Sounds to me like OSS supporters are all-too-aware that their software has a way to go before anybody would choose it over Microsoft if it were free (other than the Germans perhaps...)
  • Get over yourselves. (Score:3, Interesting)

    by grue23 ( 158136 ) on Monday May 26, 2003 @08:24PM (#6043116)
    Disclaimer: I am primarily a Mac OS X and FreeBSD user. I don't tend to like or advocate the use of Microsoft software.

    A decade or so back, Bill Gates and Microsoft got a lot of flak about being in the newer generation of wealthy that wasn't nearly as philanthropic as the old weathly.

    After that, he made statements about shifting his focus to philanthropy after he retired (I think he said at age 50, at the time). Then after he got married, his wife has been extremely active in charitable donation [gatesfoundation.org] (most notably with grants to urban schools and to youth in third world countries with disease problems).

    One of the easiest ways for Microsoft itself to be philanthropic is to donate their products, rather than to donate cash. So it seems to make perfect sense for them, if they are trying to contribute to society in a charitable fashion, to donate their products to nonprofits and other needy organizations.

    Yes, they may be helping improve their market share with these donations. But you people can't have your cake and eat it too -- if bitch about them not giving to charity, and then you can't turn around and bitch about them doing it, regardless of how they do it (unless they're giving all their money to the KK or something). This would be like bitching about Ford trying to increase their market share if they donated trucks to organizations that brought meals to the elderly that couldn't get out of the house. This is a totally ridiculous topic, the text describing the article itself is basically flamebait.

  • It's NOT for Taxes (Score:3, Informative)

    by Siobhan Hansas ( 519632 ) on Monday May 26, 2003 @08:30PM (#6043136)
    Microsoft can't claim a tax deduction for the retail price of the software, only for the cost of providing the CD etc. to the nonprofits.

    Since it all comes out of pre-tax income they don't get a return. They just get to say it is a legitimate business expense, so they don't have to pay tax on the money they actually spent administering the program.

    Money or other gifts from an organization have to have a legitimate purose or they become taxable income as though they were actually profit (presumable this is to stop them giving gifts to share holders instead of paying tax on their profit before dispersing it).

    The Billion dollar figure is just for public relations.
  • by Steven Blanchley ( 655585 ) on Monday May 26, 2003 @08:32PM (#6043157)
    Every time a story like this comes out, there are always a few morons whining about how we're always critical of Microsoft, and we speak badly of them no matter what they do, blah blah blah. Some of them are even venturing to say that it's because we all know free software is inferior and can't match Microsoft products in quality.

    So we don't like poor old Microsoft. No matter what they do, it has an evil motive. Where do you suppose we got that idea? Did we wake up one day and say to ourselves, "Let's find a company and try to make them look as bad as we can. Hmm, Microsoft sounds like a good choice"?

    No! The reason we think Microsoft is always planning something evil is because history shows that Microsoft is always planning something evil! Well, that's certainly a funny reason to doubt their motives!

    Those of you who keep coming to Microsoft's defense, who keep telling us to leave the innocent, misunderstood corporation alone, do you really think they've never done anything wrong? Do you truly believe in your hearts that Microsoft is doing something like this out of pure generosity?

    And to those of you who keep calling it silly for Microsoft to compete with "free" software, what on earth don't you understand about "free speech, not free beer"?
  • by Skald ( 140034 ) on Monday May 26, 2003 @08:53PM (#6043299)
    Sure, Microsoft is doing this because they think it's in their best interests to do so. They're giving software to corporations which aren't a big source of revenue for them anyway. Though the article doesn't mention it, yes, they're probably writing it off on their taxes. They're also keeping a bunch of people on Windows who might otherwise move to a free OS, which helps keep their user base under them. And they look good.

    Do I doubt the motives of their largesse? Not really... they're pretty clear. But what are we trying to accomplish, here? In criticizing this, the (free|open source) software world simply looks bad.

    Generally, society tends to be happy enough when charitable contributions are made; scrutinizing the donors for their motives is just puritannical. If non-profits benefit, according to their own definition of 'benefit', that's good. Complaining about it allows writers to lead articles with lines like "Even when the Microsoft Corporation attempts to do good, its critics distrust its motives," and discount open source people as too partisan to be taken seriously. "Michelle Murrain, a member of the Nonprofit Open Source Initiative in Amherst, Mass., says that if Microsoft gives away Windows for a few years, nonprofit groups may be less likely to use free, open-source software." Great. We're complaining about charity because it doesn't benefit us.

    On top of which, none of the arguments put forth are particularly convincing. Murrain says, "Microsoft could throw in all this software for the next two years and then just stop and people will be hooked." Hooked. Okay. As if none of these people had used Windows before. Or as if companies with tight budgets will, in two years' time, be willing to cough up more than they are now, because they've become hopeless Microsoft junkies in the interim.

    And Michael Gilbert says, "As a monopoly, Microsoft's below-market-price distribution of software might very well be a form of illegal competition for a particular market." Presumably he's indulging in a bit of theoretical speculation, and doesn't really lack the sense to foresee such a legal claim promptly going down in a ball of flames.

    Sometimes it seems that open source people aren't satisfied with the prospect of beating Microsoft... they're offended that Microsoft isn't willing to simply roll over and die. Or at least to provide a stationary target. Better to pick our battles, and keep the focus on all the good software being developed except when there's really something to complain about.

    • And Michael Gilbert says, "As a monopoly, Microsoft's below-market-price distribution of software might very well be a form of illegal competition for a particular market." Presumably he's indulging in a bit of theoretical speculation, and doesn't really lack the sense to foresee such a legal claim promptly going down in a ball of flames.

      I can't tell if you're being synical or just naive. Companies are successfully sued for underselling products all the time. Anti-trust is based on the idea that you c
  • by RonenKauffman ( 533207 ) on Monday May 26, 2003 @08:54PM (#6043313) Homepage
    I work for a non-profit org that was, in its startup, bankrolled by Microsoft (and some others) in a very, very big way. What I can tell you is that our relationship with Microsoft is currently fluid (as they are nearing the end of their promised obligation to us). So the org I work for is a non-profit that deal specifically with technology in the non-profit sector. I am in a unique position, I get to see many intertesting interactions. But the one that impacts me the most is that, in many cases, the free software that orgs get from Microsoft and other corporate donors is often the only software they can get, and in many cases, the best for their needs. The main need here, which the technology community and most slashdotters don't consider, is that non-profits are not only on the ropes in terms of the technology they have, but supporting and maintaining that technology is a huge problem too. If you want to see a better presence for open source in the non profit community, you need to support nonprofdits with free or extremely cheap support and training on open source solutions. non-profit professionals, like most non-techs, dont want to be technology experts. they are busy feeding people, helping them get off of drugs, and rebuilding the faces of little kids with deformities. take it from me, this is what i do for a living
  • Why not? (Score:5, Informative)

    by drgroove ( 631550 ) on Monday May 26, 2003 @08:55PM (#6043320)
    I work for a NPO. We already use Microsoft products - Windows 2000, Office 2000, and Exchange would be the major apps. Due to budgetary constraints, we've decided not to upgrade until the Windows/Office version after the Longhorn release in 2005 (whatever that release may be... ); we started setting aside money for that upgrade in 2001. Budget is the #1 thing on the minds of every executive/manager at an NPO.

    FWIW, at an NPO, any $ used comes out of a donation from a charitable person, institution, or corporation, who probably envisioned their donated $ going toward the benefit of whatever community the NPO services; I doubt seriously that most people envision their dontations going straight to Bill Gates & Co. when they sign their names on the check, be it for AIDS research, building homes for the homeless, etc. If MS is willing to provide NPO's with or reduced cost software, the end benefit is that the NPO will have more funds available to help their constituencies.
  • by ChaoticCoyote ( 195677 ) on Monday May 26, 2003 @08:55PM (#6043321) Homepage

    Oddly enough, I was involved in a discussion of this very topic today!

    My mother is an office manager for a "Safety Council"; my wife is an administrator in the American Red Cross. I also worked for a compnay the designed a SQL Server-based databank for the Red Cross.

    Both organizations are tied tightly to Microsoft, in part because of the freebies, and in part because of corporate culture. They'd be silly to turn down millions in free software, especially hwne it is the same software they already use.

    Do I take the free (as in beer) software that I know, or the free (as in leberty) software that I'll need to retool and retrain my staff for? Add in data conversion and other factors to see why the non-profits drink the Microsoft beer.

    I'd rather the Red Cross take free software from Microsoft than have them lay off disaster personnel so they can retrain and retool for "free" software. People don't give a flip about Linux-vs.-Microsoft when their house is spread across three counties.

    As for non-profits being "lucrative" -- no organization that relies on donations is lucrative; non-profit means limited budgets.

    That's not to say that Microsoft doesn't recognize the benefits of "giving." Perhaps someone at Microsoft gets a warm fuzzy feeling from donating software, and I'm certain that their accountants like the associated tax write-off. But I'm sure it hasn't been lost on Microsoft that giving software to non-profits is both good advertising and good training.

    Is Microsoft being Machiavellian? Yes. Does it matter? Probably not.

    • by Hero Zzyzzx ( 525153 ) <{moc.gnisirpukeeg} {ta} {nad}> on Monday May 26, 2003 @10:18PM (#6043895) Homepage

      FWIW, I've been working with non-profits, mostly in a technical capacity, for nearly a decade.

      I agree with the parent, however, a couple of thoughts:

      Some of the largest organizations are non-profits: Hospitals and universities. Not all non-profits are scrabbling for cash. I personally draw a mental distinction between "establishment" non-profits and "scrappy" ones that are membership- or donation-driven. I've worked with the scrappy ones.

      I have a full-time job (and consult independently) doing web programming, linux networking and various and sundry linux projects, almost exclusively for non-profits. I don't really have too much trouble getting clients willing to go with OSS (after all, they are interested in results, not the way you get there), but I have heard from some consultancies that the reason they are Microsoft-only for servers and networks is that "Microsoft gives this stuff out for next to nothing to non-profits, so why shouldn't we use it?"

      I think it's a shame- small non-profits generally don't have the technical capacity to manage windows servers securely, and the linux boxes and applications I install just run and run. Not that they don't need management, but a couple of minutes a month is usually all that's needed.

      Non-profits are full of folks that are willing to "go against the flow" and use OSS, but in some situations I'm definitely seeing folks go with Microsoft just because they're giving their stuff away. If you want to see how cheap, go here [techsoup.org].

  • by Breakerofthings ( 321914 ) on Monday May 26, 2003 @08:58PM (#6043345)
    Corporations are designed to do one thing, and one thing only: to increase the value of its stock. Only the naive believe that corporations are designed or operate to turn a profit, contribute anything useful to any community, "philanthropize", or anything else. These are solely a means to an end.

    The value of a corporation's stock is determined by the demand for that stock (classic supply/demand relationship). This is accomplished by convincing investors that the stock has value (the perception of value is value). This is done by increasing net assets (i.e. improving the balance sheet), paying dividends, etc. etc. One way of doing it is to create the impresion that there is an intangible value in the company; i.e. provide a "return" to the community that some investors might consider valueable and worthy of their support. This explains how corporations can be philanthropic and still be acting in the best interests of the shareholders. (Ignoring the effects of good PR on sales, possible gov't regulation, and other market/operating environment considerations)

    Absolutely everything that a corporation does is designed to increase the value of its stock. Anything else would be in violation of the duty of the officers of the company to its shareholders.

    It is an error to think about corporations with the same "mental template" that you use to thing about people; they do not "think" in the same way; rather, corporations "think" more like simpler forms of life; almost like a program (really, like a program with the introduced factor of human error). A corporation being philanthropic is less like a person being philanthropic, more like those ants that keep and feed aphids for food.

    Bottom line: Corporations give gifts, not out of concience, or goodwill, but from a perception of self benefit of some sort.

    Some companies operate entirely to maximize the implicit derived from philanthropy, such as charities that are organized as corps, etc.

    This is why corporations act without conscience. You think that environmentally friendly companies are so because they care about the environment? Yeah, right. They act that way for legal, PR, or other reasons (but they will sure as hell claim to care, for the very same reasons).

    Granted, my attitude about corps is very, um, clinical (?); and granted, this holds true less for smaller companies, or, more correctly, companies that are controlled more by their own stockholders (i.e. the mom and pop shop where the shareholders are, in fact, the officers of the company), because in this situation, their duties are to themselves, so they can operate in a fashion that they deem to have the most value.

    But I think you will find that the stark portrayal of companies is more accurate than most would like to believe when describing large, especially publicly traded companies.

    My point is, given a proper understanding of how corporations operate; the question of "Are company A's actions philanthropy, or self-promoting" is really a question without meaning; It's like asking if the ocean is full of water, or is it full of dihydrogen oxide?"; the question arises from a misunderstanding of the definition of "philanthropy" in the context of corporate operations.
    • Bottom line: Corporations give gifts, not out of concience, or goodwill, but from a perception of self benefit of some sort.

      Perhaps, however self-interest can be a pretty broad proposition that includes benefitting people other than the corporation in addition to the corporation itself. Examples include funding scholarships at universities that provide well-educated employees, hospitals in areas that the company operates which make that area more attractive to employees, and so on.

    • Corporations are designed to do one thing, and one thing only: to increase the value of its stock.

      Yes, but this viewpoint is oversimplified and rather... academic. It's true that corporations are all about increasing shareholder value, but what's not clear is exactly what actions do and do not further this aim. Some clearly do and some clearly don't, but there are huge gray areas, and this is where corporate culture comes into play.

      A corporation's culture shapes all the decisions of its management and plays a particularly important role in making decisions in which benefit is less that perfectly clear, or in which the benefit is clear, but hard to measure and weigh against cost. For example, some companies have as a part of their culture the notion that it is important and, in the long run, valuable to be a "good corporate citizen." The idea is plain enough: By acting in a variety of ways to strengthen and support the society of which the corporation is a part, the corporation benefits, both in terms of goodwill directed towards it in particular and in terms of how the success of the society will reflect back on the corporations which inhabits it.

      The example nearest to me is my current employer: IBM. Now, IBM is by no means a paragon of virtue, but it had this ideal of corporate citizenship placed into its culture by the elder Watson. As a result, IBM has and has always had charitable programs whose benefit to the company is less than perfectly clear. One example I've had personal involvement in was the program to donate IBM computer hardware to non-profits. There are some clear benefits to IBM:

      • Public relations.
      • Potential future sales of similar hardware (this is a weak one, particularly since the donated machines are PCs, and the non-profits can get cheaper boxes that are completely compatible from many suppliers).
      • Employee loyalty. Because this particular program only donates to charities at the request of an IBM employee who donates a significant amount of his or her *personal* time/money to them, it has the effect of making employees feel like *both* organizations are recognizing their value and contribution.

      What's not so clear at all is whether these benefits are valuable enough to justify the cost. After all, unlike Microsoft, who is out nothing more than the cost of pressing some CDs and, perhaps, printing some manuals, IBM's donation has a significant per-unit manufacturing cost.

      Another example is IBM's habit of making sure that the board of directors of every major charitable institution in a city where IBM has a significant presence contains an IBM employee (generally a high-ranking executive). While these "extra-curricular" activities are not technically part of the job description, it's well-understood that execs are expected to participate in the "good citizenship" and it's reasonable to think that such "personal" choices will have an effect on future promotions. In addition, it is expected that these activities will occasionally take time during and away from business. Further, it's clear that any time spent on charitable work is time *not* spent on increasing IBM's bottom line (well, sort of, there's the fact that lots of other corps do the same thing, so board meetings are also a chance to hobnob with potention vendors/customers).

      The point here is that there are lots of corporations, particularly "old-school" corporations, that have this sort of culture, and it leads to decisions about what "increases shareholder value" which are not, in fact, wholly based on dollar-based cost-benefit analyses.

      I'm not really qualified to comment on what Microsoft's culture is like, on whether it's the sort of company that really considers such intangible benefits as "goodwill" and "betterment of society" but, since this *is* slashdot, I will anyway.

      My perception is that Microsoft's culture is one of maximum competitiveness at all cost, without any regard for quaint notions of "citizensh

  • by Daniel Phillips ( 238627 ) on Monday May 26, 2003 @10:01PM (#6043776)
    $1 billion annually

    Would that be at full retail price? And what would be the level of the tax benefit claimed, considering that the cost to Microsoft is roughly $0.00 per piece, if you round it down.

    And for the charities: what price pain?
  • by Gavitron_zero ( 544106 ) on Monday May 26, 2003 @10:17PM (#6043884)
    Linux is free, now MS is giving away it's stuff for free. What's the problem? It sounds like people are getting lots of free software to me.
  • Would this be legal? (Score:3, Interesting)

    by michael_cain ( 66650 ) on Monday May 26, 2003 @10:28PM (#6043987) Journal
    IANAL, nor have I ever portrayed one on television, but is this legal for a court-certified monopolist? Achieving a monopoly is often legal, but then there are a lot of restrictions on how you have to behave. Would this obviously violate any of the terms of their settlement with the US DOJ, say those regarding uniform pricing? Giving away a billion dollars worth of "the product" would certainly seem to undermine any conditions aimed at restoring a competitive market for desktop OSs.

    I'm not attempting to pass judgement on whether such a donation would be good or bad, just asking the question of whether it's legal in light of MS's current conviction.

  • Question (Score:3, Insightful)

    by UserAlreadyExists ( 575130 ) <adrian AT bacterium DOT ods DOT org> on Monday May 26, 2003 @10:34PM (#6044023)
    When they say $1 Billion, do they mean what the software would sell for in retail? Or do they mean what it actually costs to manufacture it? At a few cents per CD, that's probably enough to cover the planet in Windoze install disks. (Take *that*, AOL!)
  • so, tell me again... (Score:3, Interesting)

    by CaptainFrito ( 599630 ) on Tuesday May 27, 2003 @12:32AM (#6044673)
    why do school kids get their first bit of dope for free?

1 Angstrom: measure of computer anxiety = 1000 nail-bytes