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Some of Microsoft's tactics against Linux

  • Subject: Some of Microsoft's tactics against Linux
  • From: "Rex Ballard" <rex.ballard@xxxxxxxxx>
  • Date: 27 Jan 2007 20:40:12 -0800
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After all of these years of people telling me that I'm nuts
for thinking that Microsoft was targeting Linux, here are
some excerpts from the OHIO vs Microsoft exhibits.

>From  http://www.iowaconsumercase.org/011607/9000/PX09685.pdf
<quote>
EDGI is a customer-focused program that is for circumstances
(like the one you reference) where an education and/or government 
customer
 is going to puchase naked PC's or PC's w/Linux. IF we do everything 
possible
and it still comes down to price differential between the Windows PC's 
and Linux PC's,
then we can invest some/all of the royalty revenue from the deal back 
to the customer
in the form of training, services, or even rebates.
</quote>

Which was a response to
<quote>
Okay I have a strange request...There is a situation in Indonesia 
where one of our OEMs is
planning to ship Linux into the channel on some desktops.
 Do you know about the EDGI program (I think that's how you spell it) 
and if
an initiative like this one (likely to be government and education 
accounts receiving the offer)?
Sorry if this is totally random but we've got an urgency at the 
executive level within the company
about pulling together a Windows marketing program offer
</quote>


More about EDGI
>From  http://www.iowaconsumercase.org/011607/9000/PX09683.pdf
<quote>
A cross-group team has been working for the last two weeks on a 
proposal
to have a more planned response process to defend against Linux
and other low-cost/no-cost competitors in large education/government 
deals
in both developed and developing subs.
Input has been provided by the Windows group, OEM, WWLP, LCA, EdSG, 
SLG,
the international RVP's and AlainC
</quote>

Basically everybody but God (I mean Bill) knew that Microsoft was 
willing to go to any
lengths to win out against Linux?  With that many divisions involved, 
you really believe
Bill and Steve didn't know?

More about EDGI
<quote>
Executive Summary:
In order to more effectively win in the large education/government 
deals where we
compete against low/no-cost offerings, Microsoft will introduce a 
predictable and
replicable process to engage in and win these deals. A common current 
scenario is one
where a government wants to provide for a common technology platform 
across all
schools in the country/province/state. They are either seriously 
considering open source
due to cost and political pressures or are using Linux and StarOffice 
as levers to negotiate
price with Microsoft. This scenario is closely tied to, but not 
limited to, the challenges
seen in developing countries where economic pressures ot~en force 
governments to seek
low-cost/no-cost solutions (see Appendix for recent example)
</quote>

More simply put.  "If they are not seriously considering Linux, we'll 
gouge the hell out of them,
but if there is a chance that they might actually USE Linux, we'll 
give away the farm
to keep Linux locked out".

<quote>
Goals
There are two major goals of the Education and Government Incentive 
program:
- Ensure government and education customers can experience the value
  of Windows, Office and other Microsoft products.
- Address affordability, application compatibility, teacher training 
and
  curriculum, additional software needs
</quote>

In other words, the only way to assure that customers experience the 
"Value"
of Windows, is to make sure they DON'T experience the value of Linux.

Even if we have to give away the farm, keeping the teachers loyal 
means
that the kids don't get exposed to the value of Linux, meaning they 
will
only experience the "value" of Windows, Office, and Microsoft 
products.

<quote>
It is important to note that there are two major issues that need to 
be solved.
1. How to best help developing countries jumpstart the establishment 
of an effective
educational infrastructure that can leverage the benefits of 
technology
2. How to effectively win against the no-cost/low-cost competitor in 
large
government deals (i.e. "Don't lose to Linux").
</quote>

It's ironic that many of these countries already had established Linux
oriented programs.  When Microsoft had no interested in "no budget"
situations.  But when these organizations and institutions suddenly
started singing the praises of Linux to publications read by US 
readers,
they decided they had to have a policy of "Don't lose to Linux".

<quote>
This proposal is squarely aimed at the second issue, although there is 
considerable
overlap between the two. There are deals (primarily large government 
deals in developed
countries) that fall outside of the first issue but are still included 
in the second.
</quote>

WOW!  All a government agency has to do to get FREE WINDOWS and 
OFFICE,
is to establish a formal program to adopt LINUX!  Boy, wouldn't it 
have been great
if they had made this public BEFORE all those government institutions 
spend
$billions on Microsoft Software!!  It's nice to know my tax money was 
so well spent.

<quote>
However, the majority of instances where Microsoft finds itself 
addressing the first issue,
 it will be addressing the second at the same time. Consequently, 
providing assistance to
developing subs is a ,subset of the larger problem of responding to 
the large deals:
</quote>


According to Microsoft, "A completely 'free' model is not 
desirable..."
<quote>
- Approx. $1B annual revenue stream currently being
  realized through sales to academic institutions
</quote>

But even Microsoft had some limits on what it was willing to do.
<quote>
Customer concessions cannot impact OEM royalties or rely on an OEM
delivering '~naked" PCs without an OS (i.e. no reduced price full OS 
offering or in
academic space)
</quote>

In other words "The OEMs still have to pay for the licenses, 
regardless".
A bit weird, isn't it?  Microsoft wants the customer to buy OEM 
licensed machines.
But THEN they want to offer "Free" versions of Windows in exchange for 
"Discount coupons"
in order to get them to pay for Office and other Microsoft products 
and services.

Such a deal!!

And some wins/losses

<quote  - table was horribly mangled>
Linux Account Wins/Threats/Losses
Account 	Country		Date 	No of PCs 	Industry Linux Dnvers 		    
Reasons: Win/Loss
Wins
															Proven better TCO vs
															current environment
Vassa Finland Gov't Finland 11/1/2001 ? 	Pubhc Sector TCO, 
Standardization 	  and Linu×.
															Proven better TCO vs
Lappeenranta Finland current enwronment
Gov't Finland 11/1/2001 ? Public Sector TCO, Standardization and Linux

Losses
Account Name Country Customer No. of PCs Industry Reasons for Loss 
Other reasons for
Segment Loss
Corporate Express Australia MORG 400 Services Cost
DNoerptth eorf nE Tdeurcraittoioryn - Australia Academic 10,000 Pubhc 
Sector Cost
Beijing Local Govt. China Major 2,000 Pubhc Sector Govt Endorsement
CCuesnttoraml sExcise & India Major 900 Public Sector Cost
Tata Institute of
Fundamental Research India Academic 300 Education Anti-MS
GProovceurrnemmeenntt Agency Korea Corporate 1,000 Public Sector Govt 
Endorsement
Department of General
Education Thailand MORG 1,500 Pubhc Sector Cost
University Systems Thailand Major 1,000 Public Sector Performance
Department of Local
Administration Thailand MORG 3,000 Public Sector Govt Endorsement
Columbia Sportswear US MORG 182 Public Sector Cost
MS-CC-Sun 000001130311
HIGHLY CONFIDENTIAL
</quote>


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