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Re: ASUS Loses by Surrendering to Microsoft Pressure

  • Subject: Re: ASUS Loses by Surrendering to Microsoft Pressure
  • From: Rex Ballard <rex.ballard@xxxxxxxxx>
  • Date: Mon, 28 Jul 2008 12:20:36 -0700 (PDT)
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On Jul 28, 10:02 pm, Roy Schestowitz <newsgro...@xxxxxxxxxxxxxxx>
wrote:
> -----BEGIN PGP SIGNED MESSAGE-----
> Hash: SHA1
>
> More evidence of Microsoft "tying up" the Asus EeePC
>
> ,----[ Quote ]
> | Then, one of the makers of Netbooks will release a fantastic product using
> | the paid Ubuntu/Netbook Remix, which will make us all forget about the EeePC
> | — or, maybe we’ll remember it as one of the makers which used GNU/Linux in
> | order to launch a product, and then gave in to Microsoft’s pressure.

Actually, Microsoft's pressure back-fired.  When Microsoft first tried
to get XP Home edition for the EEE to store shelves, they expected 60%
of the sales to be Windows versions, and 40% to be Vista versions.

Instead, even with the ability to freely download Windows as an
"upgrade", the Linux version was outselling the Windows version 6 to
4, and many people were downloading the Linux ISO image because the
Windows version was so limited and disfunctional.

> | The real question is: will the next maker manage to resist Microsoft’s
> | pressure? Or will everybody end up closely tied up with Microsoft?
> `----

Actually, the success of the Linux powered Mini-Notebook has prompted
HP to offer a similar device, and that one is also doing extremely
well.  Even though the machine can be configured to run Vista, the
configuration required to give you a functional system costs almost 3
times the price of the basic Linux version.

Microsoft's attempts to claim that people will install Pirated copies
of Vista on these machines is completely bogus, because the Linux
configured machine couldn't even BOOT Vista.  Never mind trying to run
Office 2007 and other Vista "hot applications".

The big problem for Microsoft is that these "Mini-Notebooks" are
getting lots of Linux machines into a lot of people's hands.
Undersized keyboards aside, they can see pretty easily that these are
some pretty hefty boxes, and Linux gives them a lot of "Bang for the
Buck".

> http://www.freesoftwaremagazine.com/columns/more_evidence_microsoft_t...

> Better wait for better (Linux-based) options:

Now Microsoft is feeling pressure from both ends of the market.  At
the High end, Apple iMacs are selling very well at at least triple the
profit margins of similar Vista systems, and people are more than
willing to pay the price.  At the low end, Mini-Laptops are
introducing Linux to budget minded users, many of whom are looking for
a second notebook that has more functionality than a PDA, but is light
and easy to carry.  With a USB-Modem, you can even use it as a "cell
phone" (skype).

> ,----[ Quote ]
> | Dell E and E Slim revealed, taking on Eee and Air in one fell swoop
> `-
> http://www.engadget.com/2008/06/12/dell-e-and-e-slim-revealed-taking-...http://tinyurl.com/6sb9bj

Good news for Dell, more bad news for Microsoft.  Again, they are
offering the Linux flavor, and it's a good solid version of Linux
(Ubuntu) with some good applications.  If these machines start showing
up on retailer shelves, Linux could be the "hot item" on everybody's
Christmas list this year, not to mention "Back to School".

The trend may be for people to hang on to their XP laptop or desktop
for another year or two, and make the new box a Linux box, that they
can carry around and not have to worry about shredding the hard drive
or cracking the case.

> Recent:


> Microsoft worried over Linux ULPCs
> ,----[ Quote
> | An un-named Microsoft official quoted in the original article claims that
> | manufacturers currently offering Linux on their low-cost devices “have made
> | some good inroads with open-source, and Microsoft wants to put a stop to it.”
> `----
> http://www.bit-tech.net/news/2008/05/12/microsoft-worried-over-linux-...

>From the horse's mouth so to speak.  My guess is that Linux is a hot
topic with all of the OEMs during this year's round of License
Negotiations.  The OEMs may even be buying the licenses, but shipping
the machines with Linux.  With Apple getting huge increases and huge
margins, the OEMs want to be able to offer something equal or better,
by being able to offer Linux AND Windows on the same machine, or being
able to put Linux on the retailer shelves with the option of upgrading
later.


> Feeling the heat at Microsoft
> ,----[ Quote ]
> | If I ask you who is Microsoft's biggest competitor now, who would it be?
> |
> | Ballmer: Open...Linux. I don't want to say open source. Linux, certainly have
> | to go with that.
> `----
> http://www.news.com/Feeling-the-heat-at-Microsoft/2008-1012_3-6232458...

You've posted this one before.  Ballmer has to be careful now.  If he
fights Open Source too aggressively, he could lose the whole market to
Linux.  At the same time, he is watching drops in revenue for Office
upgrades and support, revenue he was banking on to help him through
the slow times until the next vaporware version can be shown in
"Alpha" versions.

> Otellini: 'MID revolution will be centred round Linux'
>
> ,----[ Quote ]
> | Intel CEO says Microsoft's insistence on pushing Vista will hand market to
> | open source rival
> |
> | Intel's CEO has said that he sees the revolution that is about to happen
> | around mobile internet devices (MID) such as the Eee PC and other Atom-based
> | sub-notebooks will be "centred round Linux", in an interview with Associated
> | Press.
> `----
> http://www.pcretailmag.com/news/29939/Otellini-MID-revolution-will-be...

This is probably Microsoft's worst nightmare.  Hundreds of millions of
itty-bitty computers running Linux, with Microsoft unable to compete
in the market because they wasted so much memory, disk, and CPU.
Perhaps they will refurbish Windows 2000 to come out with a "Vista
Lite".  The problem is that even with Vista Lite, Works, and stripped
down multimedia, it still won't fit in 1/2 gig of RAM and 4 gig of
Flash.  Extra RAM and hard drive mean shorter battery life, or bigger
batteries, which means more weight.  It also makes the device more
vulnerable to drops, and the extra weight increases the chance of
breaking the LCD display.

> Acer bets big on Linux
> ,----[ Quote ]
> | Acer has stated that it will be pushing Linux aggressively on its laptops and
> | netbooks.
> `----
> http://www.vnunet.com/vnunet/news/2218172/acer-pushes-linux-hard

Acer has been a huge Linux player for years.  If I recall correctly,
EVERY PC that Acer makes is "Linux Ready" out of the box.  They ship
the machine with a Windows license, but I think they even included
installation media so that you could install dual-boot, VMWare, and
XEN configuration with no trouble at all.

ASUS has been in the motherboard business for at least two decades,
and they are also well known for their "Linux Ready" motherboards and
components.  ASUS even offered boards with "Real Modems" instead of
"WinModems" back when Linux didn't have the WinModem DSP driver
software.

Lenovo is famous for getting the IBM Thinkpad line, but again, Lenovo
was well-known for it's "Linux Ready" hardware, especially in eastern
Asia, where Linux is much more popular (as high as 40% of the market
in China and Japan at one point).

> Microsoft sees slide in profits
> http://news.bbc.co.uk/1/hi/business/7366106.stm

People focus on the last quarter, but I find the numbers from the
previous release (XP) far more interesting.  When XP was released,
Microsoft's margins were 85%, today they are down to 45%.  New
licenses will go into effect, and OEMs are paying slightly more per
license for a more flexible licensing plan, including the ability to
control the configuration and boot sequence.  This will allow them to
sell machines which boot Linux and start Windows as a VM client
(VMWare or Xen) automatically.

Now that Linux has the hypervisor support built into the kernel, it
can run virtualized Windows even faster than it did before, which
means it will be that much faster than "Native" mode.

Microsoft is facing a new market starting in August.  HP, and Dell are
looking at Apple and want to do whatever it takes to keep Apple from
moving to 2nd or 1st place.  Acer and Lenovo have already been knocked
into 4th and 5th place, with Apple in 3rd, so Microsoft's "All Vista"
solution is clearly not working for them.

Bottom line is that since Microsoft can't generate the needed PC
sales, the OEMs are much more open to a solution that features BOTH
Linux and Windows on the same machine.

In addition, the "mini-laptop" market seems to be a "Linux only"
affair, and Microsoft really doesn't have anything to compete in that
market.  The Linux version can be carried like a day-timer, can be
dropped without causing severe damage, and can run for a few hours on
light-weight batteries.  The Windows version will be heavier, more
fragile, and won't even last an hour on the smaller batteries.

Even though Microsoft doesn't want to admit it, much of the sales last
year was companies and individuals trying to order machines with XP
while XP was still available as an option.  Now that Microsoft has
taken XP off the table, Vista will actually slow the market down.  Any
OEM who tries to stick to the "All Microsoft" solution will probably
end up following in the steps of Gateway, with stocks falling to $1/
share because they are losing money on every machine they sell, and
have to try and maintain volume to maintain revenue or risk going
bankrupt.

Individuals are looking at $100 for a tank-full of gas, and won't get
all that excited about another box with (Ho-Hum) Windows/Vista.
They've seen it.  They didn't like it that much the first year, they
liked it even less in the last 18 months, and most would "rather have
a Mac".

CEOs aren't going to be terribly keen on cutting 20% of their staff to
pay for yet another 10 years of the Microsoft Monopoly-ware, being
shoved down their gullets every time Microsoft thinks they need a
little "revenue boost".  For most, this is a critical turning point,
especially for the CIO.  This might be one of those times when they
WILL get fired for choosing Microsoft.  Much the way CIOs of 1991-1993
were often fired for choosing IBM "monopoly-ware" (OS/2 2.0, MVS 4.0,
OS/400, LU 6.2/APPC...) over Oracle, Unix (Sun, HP) and TCP/IP.

This year, Sam Palmisano sent a very clear message.  He sold of Lenovo
stock, he doubled-up on Linux and OSS plays, and improved the cohesion
between IBM's proprietary strategic projects and the OSS technology to
get higher levels of productivity through improved collaboration.

Many of the lab and stationary desktops have been switched to Linux,
and if you want to "upgrade" from XP, you can get Linux with Notes 8.0
and Symphony (as well as security management and audit software).

The BCS organization is being encouraged to use Notes 8.0, Symphony,
and if customers don't like the MS-Office formats, IBM will let them
download free copies of Symphony so they can see exactly what was
intended.  They can also use OpenOffice as well.  Clients who want to
use Office 2007 have to pay for it, and IBM bills them full retail
price, to be sure that it is a valid legal license.  The last thing
IBM wants is a bunch of consultants running around with pirated copies
of Vista and Office 2007.


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