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What if Microsoft gave Vista away for free?

 
 
Waylon Kenning
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Posts: n/a
 
      10-08-2005
An article describing Vista as being a loss-leader

http://www.osnews.com/story.php?news_id=11913

Here's the second part:

If Vista were a free product, hordes of us would upgrade immediately.
It would take a load off of Microsoft with respect to activation and
piracy. It would open the door to charge for support and updates in a
subscription based fashion, it would blow all TCO arguments out of the
water, it would make a financial dent in many competitors charging for
their products, and it would accomplish the biggest goal of all: it
would set up the vast majority with a Windows platform on which they
could then deploy Office and all the new goodies and initiatives -
those mentioned above and new ones, like Microsoft Accounting,
Microsoft CRM, and more. And most of all, with its ability to
integrate so well with Microsoft Active Directory, it would be a real
driving factor to buy Windows Server. Of course, Vista could only be
free for the home desktop, the server counterpart would still run
about 800 bucks, which is "chump change" to most companies. In fact,
as a variation of that, the license could vary: free for home use, but
a cost for commercial use. Or maybe free for home use, 50 Vista
desktop CALs with each server license. The terms could vary, but once
the desktop cost is out of the equation, the customer base exists.

At this point, Microsoft could be a little creative and maybe optimize
Vista to run newer applications. Hey, if you could HAVE Vista but had
to spend a few hundred bucks for Office 12 to get real whiz-bang
performance, that seems like a good value, right? "It's certainly
cheaper than training your employees to use Linux and OpenOffice.org,
and it really doesn't cost much when amortized over a few years. In
fact, monthly, my profit & loss statement shows virtually nothing - a
few dollars. And boy, Office 12 runs so much faster than Office XP, I
really should upgrade the rest of the workstations." Never mind the
eventual upgrade costs to Office, this is a "right now" solution.

Though most of these tech sites have lots of very vocally pro-Linux
and pro-Apple visitors, statistics reveal that the vast majority are
still running Windows, even if just from work. How many would upgrade
to Vista if it were available as a free download? If you could
download an ISO of Vista "Home Basic," wouldn't you? Maybe that would
even drive you to upgrade to Vista "Home Premium." Or maybe they give
away "Home Premium," but it requires a subscription to keep the
additional features active. There are a hundred ways to spin this into
"a great deal for everyone."

Most importantly, a free Vista would go a long way towards repairing
the image of Microsoft as an evil empire. Their campaign to be more
"open" is everywhere - their file formats have gone from binary to
XML, they have begun releasing open-source code (even to
Sourceforge!), and they have committed to supporting new features in
IE7[2], such as additional PNG support, extended CSS2 support, and
RSS. Microsoft is very concerned about their image, and their attempts
to alter the way they are perceived have been met with varying levels
of success. This, I think, is a home run.

I recognize that the likelihood of a free Vista is pretty much nil -
stockholders would never stand for a missed revenue stream, even if it
meant a much better position in the long run, and Gates and Ballmer
are not likely to let 5 years of development walk out the door with no
profit. But it seems to me as though there's a lot to be gained. As a
strategic company, they ought to be thinking that what we lose today,
we make up for tomorrow by building a greater persistent user base, an
even greater presence, and incidentally, a much greater fan base. I
find myself thinking that it's not terrible to sacrifice some
temporary flux the present to cement a more pervasive future; it
probably extends the Microsoft dominance for some time. All empires
may eventually crumble, but if the empire morphed itself into a new
entity, it might extend its life indefinitely in new ways. And hey,
Microsoft, if you're listening, $100 million in marketing can't buy
the press that the announcement would get you.

[2] Many believe that Microsoft's support for CSS is still
insufficient, beyond not supporting the ACID2 test. However, you can't
take away the fact that additional support is still very welcome and
will make the web a better place for developers.
--
Cheers,

Waylon Kenning.
 
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news.xtra.co.nz
Guest
Posts: n/a
 
      10-08-2005

"Waylon Kenning" <(E-Mail Removed)> wrote in message
news:(E-Mail Removed)...
> An article describing Vista as being a loss-leader
>
> http://www.osnews.com/story.php?news_id=11913
>
> Here's the second part:
>
> If Vista were a free product, hordes of us would upgrade immediately.
> It would take a load off of Microsoft with respect to activation and
> piracy. It would open the door to charge for support and updates in a
> subscription based fashion, it would blow all TCO arguments out of the
> water, it would make a financial dent in many competitors charging for
> their products, and it would accomplish the biggest goal of all: it
> would set up the vast majority with a Windows platform on which they
> could then deploy Office and all the new goodies and initiatives -
> those mentioned above and new ones, like Microsoft Accounting,
> Microsoft CRM, and more. And most of all, with its ability to
> integrate so well with Microsoft Active Directory, it would be a real
> driving factor to buy Windows Server. Of course, Vista could only be
> free for the home desktop, the server counterpart would still run
> about 800 bucks, which is "chump change" to most companies. In fact,
> as a variation of that, the license could vary: free for home use, but
> a cost for commercial use. Or maybe free for home use, 50 Vista
> desktop CALs with each server license. The terms could vary, but once
> the desktop cost is out of the equation, the customer base exists.
>
> At this point, Microsoft could be a little creative and maybe optimize
> Vista to run newer applications. Hey, if you could HAVE Vista but had
> to spend a few hundred bucks for Office 12 to get real whiz-bang
> performance, that seems like a good value, right? "It's certainly
> cheaper than training your employees to use Linux and OpenOffice.org,
> and it really doesn't cost much when amortized over a few years. In
> fact, monthly, my profit & loss statement shows virtually nothing - a
> few dollars. And boy, Office 12 runs so much faster than Office XP, I
> really should upgrade the rest of the workstations." Never mind the
> eventual upgrade costs to Office, this is a "right now" solution.
>
> Though most of these tech sites have lots of very vocally pro-Linux
> and pro-Apple visitors, statistics reveal that the vast majority are
> still running Windows, even if just from work. How many would upgrade
> to Vista if it were available as a free download? If you could
> download an ISO of Vista "Home Basic," wouldn't you? Maybe that would
> even drive you to upgrade to Vista "Home Premium." Or maybe they give
> away "Home Premium," but it requires a subscription to keep the
> additional features active. There are a hundred ways to spin this into
> "a great deal for everyone."
>
> Most importantly, a free Vista would go a long way towards repairing
> the image of Microsoft as an evil empire. Their campaign to be more
> "open" is everywhere - their file formats have gone from binary to
> XML, they have begun releasing open-source code (even to
> Sourceforge!), and they have committed to supporting new features in
> IE7[2], such as additional PNG support, extended CSS2 support, and
> RSS. Microsoft is very concerned about their image, and their attempts
> to alter the way they are perceived have been met with varying levels
> of success. This, I think, is a home run.
>
> I recognize that the likelihood of a free Vista is pretty much nil -
> stockholders would never stand for a missed revenue stream, even if it
> meant a much better position in the long run, and Gates and Ballmer
> are not likely to let 5 years of development walk out the door with no
> profit. But it seems to me as though there's a lot to be gained. As a
> strategic company, they ought to be thinking that what we lose today,
> we make up for tomorrow by building a greater persistent user base, an
> even greater presence, and incidentally, a much greater fan base. I
> find myself thinking that it's not terrible to sacrifice some
> temporary flux the present to cement a more pervasive future; it
> probably extends the Microsoft dominance for some time. All empires
> may eventually crumble, but if the empire morphed itself into a new
> entity, it might extend its life indefinitely in new ways. And hey,
> Microsoft, if you're listening, $100 million in marketing can't buy
> the press that the announcement would get you.
>
> [2] Many believe that Microsoft's support for CSS is still
> insufficient, beyond not supporting the ACID2 test. However, you can't
> take away the fact that additional support is still very welcome and
> will make the web a better place for developers.
> --
> Cheers,
>
> Waylon Kenning.


Or, microsoft would go bust.


 
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Rob J
Guest
Posts: n/a
 
      10-11-2005
In article <(E-Mail Removed)>,
http://www.velocityreviews.com/forums/(E-Mail Removed) says...

> Most importantly, a free Vista would go a long way towards repairing
> the image of Microsoft as an evil empire. Their campaign to be more
> "open" is everywhere - their file formats have gone from binary to
> XML, they have begun releasing open-source code (even to
> Sourceforge!), and they have committed to supporting new features in
> IE7[2], such as additional PNG support, extended CSS2 support, and
> RSS. Microsoft is very concerned about their image, and their attempts
> to alter the way they are perceived have been met with varying levels
> of success. This, I think, is a home run.


No brain no pain.

As soon as MS makes a major product such as Vista free they are accused
of monopoly power squeezing competitors out of the marketplace just like
they did when IE was introduced free against Netscape which then cost $
to buy.

These guys want a buck both ways.
 
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Matthew Poole
Guest
Posts: n/a
 
      10-11-2005
On Wed, 12 Oct 2005 01:26:40 +1300, someone purporting to be Rob J didst
scrawl:

> In article <(E-Mail Removed)>,
> (E-Mail Removed) says...

*SNIP*
> As soon as MS makes a major product such as Vista free they are accused
> of monopoly power squeezing competitors out of the marketplace just like
> they did when IE was introduced free against Netscape which then cost $
> to buy.
>
> These guys want a buck both ways.


No, we want Microsoft to play on the same field as everyone else. That
means not leveraging a dominant market position to enhance sales of other
parts of your product portfolio.
The Microsoft Tax, whereby an OEM gets stung for a Windows licence even if
a box goes out of the factor without Windows, is but one of their numerous
ways of making it difficult for others to compete.

Competition means both sides putting in a similar degree of effort. MS
don't compete anymore, by that definition. Look at what it took to get
improvements to IE: a browser that was merrily chewing its way through
IE's market share.

--
Matthew Poole
"Don't use force. Get a bigger hammer."

 
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davenetnz@gmail.com
Guest
Posts: n/a
 
      10-11-2005
Matthew Poole wrote:
> MS
> don't compete anymore, by that definition. Look at what it took to get
> improvements to IE: a browser that was merrily chewing its way through
> IE's market share.


You will find that most companies wont do further development until
they have to, why bother if you already have ~100% of the market.

 
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Brett Roberts
Guest
Posts: n/a
 
      10-11-2005
"Matthew Poole" <(E-Mail Removed)> wrote in message
news(E-Mail Removed)...
> On Wed, 12 Oct 2005 01:26:40 +1300, someone purporting to be Rob J didst
> scrawl:
>
>> In article <(E-Mail Removed)>,
>> (E-Mail Removed) says...

> *SNIP*
>> As soon as MS makes a major product such as Vista free they are accused
>> of monopoly power squeezing competitors out of the marketplace just like
>> they did when IE was introduced free against Netscape which then cost $
>> to buy.
>>
>> These guys want a buck both ways.

>
> No, we want Microsoft to play on the same field as everyone else. That
> means not leveraging a dominant market position to enhance sales of other
> parts of your product portfolio.
> The Microsoft Tax, whereby an OEM gets stung for a Windows licence even if
> a box goes out of the factor without Windows, is but one of their numerous
> ways of making it difficult for others to compete.
>
> Competition means both sides putting in a similar degree of effort. MS
> don't compete anymore, by that definition. Look at what it took to get
> improvements to IE: a browser that was merrily chewing its way through
> IE's market share.
>
> --
> Matthew Poole
> "Don't use force. Get a bigger hammer."
>


Sorry Matthew, I can't let you get away with factually incorrect post. The
OEM licensing scheme you mention above was called "per processor" licensing
and was banned under the 1994 Microsoft / US Dept of Justice consent decree.
FWIW, I spent five years running Microsoft NZ's OEM business and can tell
you that the lack of desktop and notebook PC's shipping with a pre-installed
Linux OS is nothing to do with Microsoft's licensing and everything to do
with two fundamental issues:

* relative lack of customer demand
* number of OS variants + driver issues + lack of certified hardware =
higher sales and support costs = lower profits

By the way, IANAL but I am 99% sure that giving Vista away for free would
also fall foul of one or more of the Microsoft / US Dept of Justice consent
decrees

Brett Roberts
Microsoft NZ

** this post is provided "AS IS" with no warranties, and confers no rights
**


 
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Don Hills
Guest
Posts: n/a
 
      10-12-2005
In article <(E-Mail Removed)>,
"Brett Roberts" <(E-Mail Removed)> wrote:
>
>Sorry Matthew, I can't let you get away with factually incorrect post.


Sorry Brett, I can't let you get away with a factually incorrect post.

Let's take it section by section:

>"Matthew Poole" <(E-Mail Removed)> wrote in message
>news(E-Mail Removed). ..
>> The Microsoft Tax, whereby an OEM gets stung for a Windows licence even if
>> a box goes out of the factor without Windows, is but one of their numerous
>> ways of making it difficult for others to compete.


You replied:

>The OEM licensing scheme you mention above was called "per processor" licensing
>and was banned under the 1994 Microsoft / US Dept of Justice consent decree.


By your own admission, he was correct in that such a licensing scheme did
exist. It effectively still does exist, though not under that name.
Right, so that part is not factually incorrect. Next:

He said:

>> No, we want Microsoft to play on the same field as everyone else. That
>> means not leveraging a dominant market position to enhance sales of other
>> parts of your product portfolio.
>>


You replied:

>FWIW, I spent five years running Microsoft NZ's OEM business and can tell
>you that the lack of desktop and notebook PC's shipping with a pre-installed
>Linux OS is nothing to do with Microsoft's licensing and everything to do
>with two fundamental issues:
>
>* relative lack of customer demand
>* number of OS variants + driver issues + lack of certified hardware =
>higher sales and support costs = lower profits


Yes, but why are those issues significant? Before answering, I suggest you
(and Matthew) read "Big Blue", by Richard Thomas DeLamarter. (See below.)

>> Competition means both sides putting in a similar degree of effort. MS
>> don't compete anymore, by that definition. Look at what it took to get
>> improvements to IE: a browser that was merrily chewing its way through
>> IE's market share.


That is SOP for any large company (and many small ones), not just Microsoft.
So again, not factually incorrect.

>By the way, IANAL but I am 99% sure that giving Vista away for free would
>also fall foul of one or more of the Microsoft / US Dept of Justice consent
>decrees


Very probably.


I've just read "Big Blue". It's the story behind IBM's monopolisation of the
IT market and the techniques it used to do so. The author was a senior
exconomist for the US Govt for 8 years of the 1969 antitrust case against
IBM.

As I read the introduction to the book I became aware that, simply by
exchanging the word "Microsoft" for the word "IBM", it would apply as
exactly to Microsoft as it had to IBM. Anyone studying the recent antitrust
cases against Microsoft and the company's current behaviour (and, in fact,
looking for an indication of what it is likely to do next) would do well to
read this book.

Although the author may be discounted as having an agenda - I got the
impression that he felt that the Govt's last-minute dismissal of the case
was politically motivated - I found his numbers and supporting evidence
added up. (And so they should, they came from impeccable sources including
IBM's own records obtained for the trial). The book also explained several
things I saw and read while working at IBM that had puzzled me at the time.

--
Don Hills (dmhills at attglobaldotnet) Wellington, New Zealand
"New interface closely resembles Presentation Manager,
preparing you for the wonders of OS/2!"
-- Advertisement on the box for Microsoft Windows 2.11 for 286
 
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Rob J
Guest
Posts: n/a
 
      10-12-2005
In article <(E-Mail Removed)>, (E-Mail Removed)
says...
> On Wed, 12 Oct 2005 01:26:40 +1300, someone purporting to be Rob J didst
> scrawl:
>
> > In article <(E-Mail Removed)>,
> > (E-Mail Removed) says...

> *SNIP*
> > As soon as MS makes a major product such as Vista free they are accused
> > of monopoly power squeezing competitors out of the marketplace just like
> > they did when IE was introduced free against Netscape which then cost $
> > to buy.
> >
> > These guys want a buck both ways.

>
> No, we want Microsoft to play on the same field as everyone else. That
> means not leveraging a dominant market position to enhance sales of other
> parts of your product portfolio.
> The Microsoft Tax, whereby an OEM gets stung for a Windows licence even if
> a box goes out of the factor without Windows, is but one of their numerous
> ways of making it difficult for others to compete.


It's a form of exclusive licensing, quite legal in NZ and practised by a
number of companies.

> Competition means both sides putting in a similar degree of effort. MS
> don't compete anymore, by that definition. Look at what it took to get
> improvements to IE: a browser that was merrily chewing its way through
> IE's market share.


Cobblers, Mozilla has scarcely made a dent in IE.
 
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Matthew Poole
Guest
Posts: n/a
 
      10-12-2005
On Wed, 12 Oct 2005 22:03:15 +1300, someone purporting to be Rob J didst
scrawl:

> In article <(E-Mail Removed)>, (E-Mail Removed)
> says...

*SNIP*
> It's a form of exclusive licensing, quite legal in NZ and practised by a
> number of companies.
>

When you have 90+% of a market, the rules are a little different.
Exclusive licencing may be legal, but not if it allows you to exert
monopoly influence. 90-something percent IS a monopoly, Rob, regardless of
what you may think.

>> Competition means both sides putting in a similar degree of effort. MS
>> don't compete anymore, by that definition. Look at what it took to get
>> improvements to IE: a browser that was merrily chewing its way through
>> IE's market share.

>
> Cobblers, Mozilla has scarcely made a dent in IE.


Enough of a dent for MS to actually produce another version of IE. That's
all that matters. If it weren't for Firefox, IE6 would've been the last
stand-alone version and anyone who wanted tabbed-browsing, popup blocking,
PNG-compliance, and CSS-compliance (though that's still a maybe) would
have had to upgrade to Vista. Or do you deny that MS have reversed their
position on IE6 being the last stand-alone version?

--
Matthew Poole
"Don't use force. Get a bigger hammer."

 
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Rob J
Guest
Posts: n/a
 
      10-12-2005
In article <(E-Mail Removed)>, (E-Mail Removed)
says...
> On Wed, 12 Oct 2005 22:03:15 +1300, someone purporting to be Rob J didst
> scrawl:
>
> > In article <(E-Mail Removed)>, (E-Mail Removed)
> > says...

> *SNIP*
> > It's a form of exclusive licensing, quite legal in NZ and practised by a
> > number of companies.
> >

> When you have 90+% of a market, the rules are a little different.
> Exclusive licencing may be legal, but not if it allows you to exert
> monopoly influence. 90-something percent IS a monopoly, Rob, regardless of
> what you may think.


No it isn't. A monopoly is when you have 100% of the market, not 90%.

>
> >> Competition means both sides putting in a similar degree of effort. MS
> >> don't compete anymore, by that definition. Look at what it took to get
> >> improvements to IE: a browser that was merrily chewing its way through
> >> IE's market share.

> >
> > Cobblers, Mozilla has scarcely made a dent in IE.

>
> Enough of a dent for MS to actually produce another version of IE.


MS produced another version of IE. FF took a tiny bit of market share.
Two coincidental events. Can you really prove they are not? NO.

 
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