Home Messages Index
[Date Prev][Date Next][Thread Prev][Thread Next]
Author IndexDate IndexThread Index

Re: Microsoft's Claimed Financial Gains Attributed to Piracy Crackdowns

On Nov 26, 10:48 am, "DFS" <nospam@xxxxxxxx> wrote:
> Rex Ballard wrote:
> > It seems these corporate customers didn't understand that
> > under the support plans, they were only "renting" the licenses, not
> > paying for them outright.
> Yes, only you and 3 other cola maniacs really understand how anything works.

And of course, the 27 Attorney's General understood every aspect of
the DOJ settlement and knew exactly how Microsoft was going to nullify
the whole process.

If Microsoft can confuse a highly trained top attorney for each of 27
states, what makes you think that manager of smaller companies, many
of whom don't check with the lawyers often enough would understand all
of the subtleties of the Corporate licensing agreement.

I remember when NT 3.1 and NT 3.5 first came out.  Microsoft offered
NT server with 10 client access licenses, and the ability to purchase
additional licenses for $60 per client.  A very well educated, very
competent, and very intelligent Vice President was absolutely
convinced that these "Client Licenses" were for the right to copy
Windows NT into the client machines.  I reviewed the license and
explained that, based on my reading of the license, the Client Access
licenses were only for the permission to access the server, that you
still had to pay for each of the workstation licenses.  The VP figured
I was wrong, after all, it didn't make sense that Microsoft would
charge so much for Windows, especially if you didn't need the media to
install Windows onto the client machines.  I suggested that he have
the lawyers review it as well.  The lawyers were a bit confused as
well. Rather than calling Microsoft for clarification, they just went
with the Vice President's assumption.  Soon about 250 workstations
were running Windows NT.  About 2 months later, Microsoft approached
them about a project, and offered a couple of consultants to help do
the work.  The consultants figured out the mistake, told Microsoft,
and Microsoft suddenly sent a bill for 250 NT workstation licenses, at
$350 each.  Furthermore, since they were connecting each of these
users to multiple servers, they didn't have enough Client Access
Licenses either.  What was originally assumed to be $15,000 worth of
software turned into a bill for $150,000 in CALs, and $87,000 in
Workstation licenses.  All of the machines had been purchased with
Windows 3.1 pre-installed.   Very quickly about 200 of the
workstations were "rolled back" to Windows 3.1, most of the NT servers
were disabled, and the 50 PCs that had to be NT were licensed to NT
servers, for a total of $6,000 in CALs, and $17,500 in workstation
licenses.  The cost of the whole fiasco had to be funded by cutting
staff from the support team.

> > Some companies, such as IBM have opted to just purchase downgradable
> > XP licenses, allowing their employees to continue running either XP or
> > Windows 2000.
> When oh when will IBM eat its own dog food and mandate Linux/OSS only for
> internal use?

Sam Palmisano had originally announced, about 2 years ago, that
everyone at IBM would be using Linux as their primary operating system
in 2007.  There is a moratorium on Vista and new licenses for XP and
Windows 2000.  One of the biggest problems was that the travel agency
still required IE.  To accomodate FireFox and Linux users, these users
are now permitted to book flights and hotels directly or through other
internet providers.  A FireFox/Linux version is supposed to be
available by the end of the year.

Most of the Windows users also have cygwin, and IBM offers VMWare
Player images for developers and customers who want to develop for
DB2, WebSphere, and other high-end IBM middleware products.

> > Microsoft on the other hand, is above the law, and only needs to put
> > the illegal consent into the contracts to make it valid.
> Yet there you are, day after day, hawking proprietary IBM products, some of
> which run only on Windows?  Why help them so much?

Most of the new products run on Windows or Linux or AIX or Solaris.
Most of the "Windows Only" products are the old legacy versions of
software like MQSI, which is still supported but has been upgraded to
support Linux clients as well as Windows clients.  Most of the GUI
interfaces are now done in Eclipse, most of the back-ends are done in
platform independent Java.  These days, our customers are telling us
that they want Linux.  Often, they would rather have a rack of Linux
blades that are virtualized or can run multiple servers than a bunch
of dedicated redundant Windows single-purpose boxes.

> > That doesn't mean that such actions are without consequences.  The
> > harder Microsoft pushes, the more receptive corporations are to covert
> > changes that will enable them to transition to Linux.
> The only hope for Linux?  MS makes everyone quit using Windows.

Not the only hope, but Microsoft has burned a lot of customer good-
will in the last 10 years, and they have burned their bridges with
most of the major software development

> > Microsoft maintains it's monopoly market control by being
> > "indespensible".  OEMs can't sell Linux because they can't risk the
> > certain retaliation of having Microsoft revoke their Windows licenses
> > for one or more of their PC lines.
> OEMs can - and always have been able to - do exactly what they want to.

They always have a choice, but the consequences of a choice Microsoft
doesn't like are apparently quite severe.  Remember, when Compaq did
little more than "rearrange the furniture" moving the IE icon to the
application menu and replacing it's desktop Icon with the Netscape
Icon and shortcut, Microsoft revoked ALL of the licenses for that
entire line of computers.  This was one of the most popular lines
Compaq sold.  Eventually, Microsoft's retaliations made Compaq an easy
take-over target for HP, and even then, Microsoft backed investors
were fighting the merger along with the family of the founders.

IBM's testimony and exhibits showed that Microsoft had no qualms about
refusing to grant IBM ANY licenses for Windows 95 unless IBM agreed to
stop installing OS/2 on ALL of their PCs.

Just curious, did Microsoft make similar threats when Dell decided to
offer Linux on their desktops and laptops?  Did they make similar
threats to HP when HP announced the availability of AMD-64 powered
Desktop and Laptop systems with SUSE Linux preinstalled?  Could that
be why the offer "disappeared" three days later?  And what might have
made Toshiba make their offer to ship Laptops with Linux pre-installed
disappear within less than 24 hours?  Could it be that Microsoft "made
them an offer they can't refuse".

> > Corporations can't switch to Linux
> > publicly because they can't risk the retaliation of Microsoft shutting
> > down all of their Windows PCs for several days while an audit is being
> > conducted.

> Not to worry.  I'm sure the CIOs and CTOs made this part of the "Linux
> contingency plans" they all have.

Probably so.  It's all a matter of timing.  Most corporations are more
covertly converting to hybrid Windows/Linux systems.  In fact, one of
the reasons they are rejecting Vista is because they are preparing to
transition to Linux-only systems if Microsoft pushes too hard.  They
might not convert EVERY PC to Linux-only, but it would be quite
possible for a major corporation like Prudential, Met-Life, Bank of
America, SunTrust, or most other Fortune 500 corporatios as well as
S&P Mid-cap corporations, to convert as many as 70% of their PCs to

The question is whether these corporations can make such changes
without losing the licenses they have already purchased.

[Date Prev][Date Next][Thread Prev][Thread Next]
Author IndexDate IndexThread Index