“Last summer, Orlando Ayala, then in charge of worldwide sales at Microsoft, sent an e-mail message titled ‘Microsoft Confidential’ to senior managers laying out a company strategy to dissuade governments across the globe from choosing cheaper alternatives to the ubiquitous Windows software systems.Mr. Ayala’s message told executives that if a deal involving governments or large institutions looked doomed, they were authorized to draw from a special fund to offer the software at a steep discount or even free if necessary.” Read the rest at NYTimes (free reg. required).
Two more related stories: “Gartner: How Microsoft will handle the Linux threat” and “Report: Microsoft discounts against Linux“.
Makes solid business sense to me.
Yeah, except for one thing, ANTI-TRUST!
EU’s gonna investigate, thankfully (imagine we had to leave everything up to the US DoJ!!)
L.
…it’s just great being a European. I had high hopes for the DoJ trial in the United States but I have more faith in the EU to come to a fair decision.
That is probabely why the US DoJ let them off they handed them a stack of cash. Or they are a bunch of MS lovers at the DoJ.
its great being a capitalist. If you’re a rich criminal you get the best treatment and the option to buy your way out of trouble.
Does this suggest MS demoted him or something (I’m waay to lazy to search MS’s corporate hierachy to find if he still works there) because of this order?
Equally, won’t doing this lower peoples opinion of MS because if people were going to choose Linux over Windows price isn’t the only factor (albeit the most important in most cases) they would have been taking into account. It kind of suggests (to me anyway) the MS see their product as unable to compete..?
i _think_ that Ayala is a felame name (at least in Hebrew).
Geeeee, i wonder if the EU will have trouble with an AMERICAN company who happens to own a huge chunk of the market. And oh, for all you “antitrust” whiners out there, consider this.. There is no such thing as a monopoly on an intangible good, such as intellectual property. Of ALL PEOPLE you should know this!!! Monopolyies only exist where a tangible good has been monopolized. ie, the episode when the gold was stockpiled by an individual to drive up prices. Also, things like phone service can be monopolized because it is IMPOSSIBLE read as impossible, not hard, to compete when only one company has authorization to string up PHYSICAL telecomunication networks. Software on the other hand cannot be monopolized. It is merely information… it is intellectual property. The mere fact alone that MS had to resort to this memo is evidence that the free market itself is taking its toll on MS’s sales. The competition they are facing is scaring them. They will be forced to innovate or lower prices. This is standard ecenomics people. The US is not a socialist state as so many of you European countries are. We exist on a free market. That is what has given birth to our Technological innovation, and that same free market will prevent provoke MS to reconsider their pricing and innovation stragies. Geez, you EU whiners drive me up the wall.
And oh, for all you “antitrust” whiners out there, consider this.. There is no such thing as a monopoly on an intangible good, such as intellectual property.
Funny, the Departmen of Justice doesn’t think so.
As if the EU doesn’t like cash! I personally wouldn’t put too much trust on politicians and their justice departments. I would just hope that other pieces of the linux fall in place sooner than later. It would be nice if MS would also start offering Office for free!
Software can be monopolized. Remember when Dell was putting Linux on their desktops ? M$ got furious and upped the price of Windows for them (and only them) until they stopped selling machines with Linux installed. No matter which way you look at it, that is a monopoly.
It’s not EU whiners in particular, it’s just whiners and as such the exist everywhere. I don’t think these measures will help though because unless MS is ready to offer this at every upgrade and possibly source code for their products it will make little difference. Add to the fact that it will probably be European or even national companies that will receive these Linux contracts the governments would be more than willing to go for the Linux solution since they will get the tax money on any profit and as such won’t be “funding” the US government.
Remember when Dell was putting Linux on their desktops ? M$ got furious and upped the price of Windows for them (and only them) until they stopped selling machines with Linux installed.
http://www.dell.com/us/en/biz/topics/linux_000_products.htm
Funny, but it seems Dell still sells Linux. They don’t make it available on all of their computers, but it’s definitely an option (and one of the first choices you make when you order a system that has it available).
Funny, the Departmen of Justice doesn’t think so.
Obviously they dont beleive it very much, or they would have acted on the stint verdict that was reached so long ago.
<p>
Remember, the DOJ first embraced the idea that information can be monopolized as a physical good right around the same time they adoped the idea that information access should be treated the same as physical access. ie. limited (think DMCA) The point is, the idea of being against information monopoly and beleiveing in free information cannot go hand in hand. By definition, it creates a contradiction. In the effort to remove the physicality of information, inadvertently the idea of its physicality is restored when you claim that a monopoly could exist on said information.
Try ordering Red Hat from Dell on a consumer laptop. They will not sell it to you. Trust me, I have tried.
@avih
Ayala is a male. Not that this matters much.
And he continue to work at microsoft.
me: I don’t know where you got that definition of monopoly, but you’re wrong.
http://dictionary.reference.com/search?q=monopoly
Microsoft does have a monopoly on desktop operating systems and office software.
The mere fact alone that MS had to resort to this memo is evidence that the free market itself is taking its toll on MS’s sales
Baloney. It’s not the free market that’s hurting MS, it’s open source. No for-profit company can compete against MS, as has been proven again and again. MS will either buy them or take away their revenue stream by rolling a similar product into the OS, or modify Windows to make their product flakey.
What comes around goes around and now MS is getting it in spades. Linux and OpenOffice are now taking away Microsoft’s revenue stream. Investors should see the folley of this new MS strategy. They can’t keep giving their software away, but Free Software will be Free forever*.
* Unless MS can buy enough congressmen to legislate it as a terrorist tool, or somehow succeed with Palladium, effectively excluding Linux from the playground.
(Hi Eugenia 😉
What is important to remember here is that Ballmer claimer in a company memo that is still available at Microsoft that they had “learned” from their mistakes and that they were going to become fair players.
Microsoft’s hostile culture towards its competitors has not changed and anybody who reads the artice and the many instances of this behavior that it provides can hardly come to any other conclusion.
An positive reading of all of this is that this type of behavior can only be borne outof desperation, which I think is exactly what is going on.
Microsoft customers and users should realize that a better, law-abiding Microsoft is a good thing for everyone. It forces Microsoft to compete on technological merit. The two most important things that I would do if I were one of the EU commissioners is:
*Require open and documented file protocols that can be read and written by any application’s competitor.
*Require open and documented APIs
your msft stocks still killing you eh?
What’s wrong with this? Ayala said, “It is important that we have a way to address large PC purchases that involve low-cost/no-cost competitors….”
Now, how else is one supposed to compete against low-cost/no-cost competitors, except by discounting? Zero cost will kill your pricing, no matter who you are.
I don’t want to talk about MSFT’s other practices, since I don’t agree with all of them, but I’m talking about this case.
>Geez, you EU whiners drive me up the wall.
-Such an approprite place to be!
So you must be feeling very comfortable…
What’s wrong with this? Ayala said, “It is important that we have a way to address large PC purchases that involve low-cost/no-cost competitors….”
For one, MS claims they are still the low cost competitor when TCO is involved. If they want to drag this pathetic argument all over the place (but primarily the press, events, etc.), why can’t they make the same argument with their customers.
For another, just because another product has a more effective strategy doesn’t mean you can break the law just to out do them. MS is more than welcome to offer rebates or discounts to everyone or on some other consistent basis: i.e factoring volume or services, etc… But they cannot say, “You are chosing Linux? Okay, instead of $500,000 for licesning, we’ll only charge $10,000 and throw in some services too.” And then go to the next customer who is considering other commercial options and stick them with the $500,000 price tag just because they weren’t considering Linux. If you don’t call that predation, what do you call it?
THe point is Linux is available for free, a package cost, or free with service fees. The model and strategy is difficult enough to convince customers of… (According to MS, they aren’t cheaper, can’t provide a stable quality product because it’s free, etc…) So MS gets to double talk, have the advantage of having most of their customers paying out the @ss, AND they get to give it away too? Baloney.
I love when the MS goon says they NEED to do this to be “Competitive” and “relevent.” Are they saying that otherwise they aren’t? Does anyone actually believe that if MS didn’t have a slush fund to undercut Linux that they wouldn’t be “competitive”, and they’d be “irrelevent?”
Come on, this is bullsh!t. Not only should the EU slam them, but I would venture there is another U.S. antitrust case here as well. Of course, our corporate government won’t touch it.
> We exist on a free market. That is what has given birth to our Technological innovation, and that same free market will prevent provoke MS to reconsider their pricing and innovation stragies.
You mean… like when the airlines compete so hard with each other to give the customer the best possible service and lower their prices on daily basis ?
warded.. past tense.
Good luck Microsoft. You’re gonna need it!
Hahaha.. <- laughing all the way to the bank
The actions of Microsoft is not that of a capitalist but of a company hell bent of perverting the freemarket and corrupting the justice system so that they have complete control over the market place. Anyone who has read Wealth of Nations would see parallels between the actions of a monopolists and their negative side affects (as outline by the book) and the actions of Microsoft over the last 15years.
For example, exclusive contracts ALONE are a barrier to entry to the marketplace, thus, even that alone should have been a trigger for the anti-competitive watch dogs to pounce on Microsoft.
Microsoft is a monopolist and uses its power to block the entry of new competitors to the marketplace. Microsoft does this through its size in the market and the growing influence it has politically.
Judge Jackson was right, and as for his “off the cuff” remarks, I say it is about time Bill Gates and Balmer grew some balls and stopped acting like 8 year olds. Bill DOES have a nepoleonic complex, whether he likes it or not. The decision should have been made, Microsoft sentence and today we would have seen 3 seperate companies.
A few years ago, the EU could reasonably sit back and watch the DOJ do its thing, and that was appropriate. The DOJ was under a different administration then, and had views much closer to the europeans than the current administration does. As soon as Bush was in power, the DOJ enetered into negotiations with Microsoft, *despite* having the advantage in the court case. They gave away the store.
I hope that the EU can start/finish what we did not. It is advantageous to all.
I do find it ironic; I tend to be a little conservative at time, and am pro-capitalist, but nothing bothers me more than large companies taking advantage of their position in the market, their employees, etc. The Clinton DOJ was taking action that would help competition in the market place, and in the long run, the economy as well.
What I want to know is this: how will governments and schools react now that this is common knowledge? I know that if I were in charge of tech for any government agency and was needing to cut cost I would fake switching to linux even if I didn’t really plan on it. I would go the whole nine-yards and get every piece of the plan in place. Let MS see what I was planning, and find out how much I could get out of them. If their offer wasn’t good enough, I could always make the switch. Then again, if they offer all the licenses for Windows and oFfice for free I would go ahead and take them. Either way you can cut your bottom line and impress your supervisors.
Yes you could try and “fake” switching to Linux just to get cheap/free M$ products/services but there is a flipside to that. When one of those mandatory M$ upgrades come along you will be in the M$ Death Grip and you will have to shell out some serious $$$ for the next gen. OS that they are shoving down your throat. I work on Wall St. and A LOT of financial companies still use NT 4.0 as their desktop OS for their staff. They pretty much figured it out how to make them as stable as they get, have automated an unsupervised installation process of this OS to a perfection but now they are forced to upgrade. It’s either A) in their contact that they have to switch after X number of years to a more current OS or not get support or B) since M$ decided that NT 4.0 is an old OS they are not providing support for it they will, again, loose any support for the product (not that M$ support is such a great thing). The majority of these big companies scramble to upgrade to W2K only to discover that that OS will become not supported by M$ in the near future or to Windows XP which has its own slew of problems. Of course breaking the contact is not an option because that costs money too. Once you go M$ you’re pretty much in their death grip and there is very little to do about getting out without performing a drastic change (like a complete overhaul to *NIX). Sorry to be cliche but its like dealing dope; here, the first couple of hits are on us and when you get hooked thats when they bleed you dry.
“Me” wrote:
EU whiners
By me (IP: 206.158.164.—) – Posted on 2003-05-15 19:30:28
…There is no such thing as a monopoly on an intangible good, such as intellectual property…Monopolyies only exist where a tangible good has been monopolized….Software on the other hand cannot be monopolized. It is merely information… it is intellectual property.
Me, you is a moron. Intellectual property is a term made up in the 1960s by American lawyers to cover copyrights, trademarks, patents and other forms of government-granted monopolies on expression. Think you have freedom of speech? Not if someone else wrote the words. Or the software. The government grants a monopoly to the author for the duration of his/her life plus nearly a century. Trademarks? Government granted monopolies on logos or phrases used to identify commercial products. Patents? Government granted temporary monopolies on the ideas expressed as products or processes.
Since you are thick, I’ll repeat this as simply as I can: intellectual property=government-granted monopolies on expression.
Try ordering Red Hat from Dell on a consumer laptop. They will not sell it to you. Trust me, I have tried.
Like I said, they don’t sell it on all of their computers, but that doesn’t mean they don’t sell it (you can easily get it on a workstation or server). ‘They dont sell it on laptops’ is a far cry from ‘they dont sell it at all’.
I trid to order a Dell computer a while back with NO operating, I was told to go fly a kite. Why should I pay an extra $30 for a pile of “free software” I neither require nor want. Heck, I even said that they don’t even need to give me a refund, I don’t want the software, they still demanded that I take it. So no, Dell does demand that the desktop you buy has a “Microsoft package” pre-installed.
I trid to order a Dell computer a while back with NO operating, I was told to go fly a kite.
I imagine they would, since they’re not in the business of selling bare-bones computers last I checked. I usually buy my computers in parts from hardware shops that would gladly sell me a computer without an OS installed.
Why should I pay an extra $30 for a pile of “free software” I neither require nor want. Heck, I even said that they don’t even need to give me a refund, I don’t want the software, they still demanded that I take it. So no, Dell does demand that the desktop you buy has a “Microsoft package” pre-installed.
They require an OS pre-installed. Depending on which computer you buy from them, you either have a choice of a couple of Microsoft Operating Systems or a choice of those or Red Hat Linux. In those cases where they offer Linux you certainly don’t have to buy any Microsoft software, but then those systems are usually their higher end stuff (at least as far as a desktop computer is concerned).
My point was simply that Dell certainly does sell Linux pre-installed. I’m not going to argue about why Dell doesn’t sell systems without an operating system installed, because I frankly don’t care and wouldn’t even buy a system from Dell in the first place (we have Dells here at work, that’s a corporate thing, I’ve never owned a Dell personally, though). Dell may be the biggest of the major PC OEMs, but local businesses, when combined, make up a larger percentage of x86 PCs, and most of those will sell you whatever you want, as long as you can afford it and they can get it.