EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

04.11.09

Leaked Microsoft Memo: How Microsoft Changes the Prices at OEMs to Block GNU/Linux Sales

Posted in America, Antitrust, GNU/Linux, Mandriva, Microsoft at 2:44 am by Dr. Roy Schestowitz

Summary: Antitrust exhibit shows how Microsoft changes its pricing to suppress interest in Mandrake (GNU/Linux)

SOME PEOPLE wish to know why certain shop cease to sell GNU/Linux-powered computers (or sub-notebooks with GNU/Linux), or in some cases no longer make available GNU/Linux with comparable hardware. The truth of the matter is that Microsoft systematically sets the prices to deny GNU/Linux entry into the market.

We have just pulled an antitrust exhibit which shows what Microsoft is doing. As far as we are aware, this exhibit was never published or used by the courts before. The full exhibit (2003) [PDF] can be found as text at the bottom of this post. Here is the gist:

From: Brad Beadles
Sent: Tuesday, June 24, 2003 4:31 PM
To: Dale Watanabe
Co: Bret Arsenault; Scott Johnson (DENVER); Tim Schmidt (DENVER); David Brandt (DENVER); Ann Nicholson
Subject: LDS Church – Hewlett Packard
Importance: High

[...]

Outside of the hardware they are considering alternatives to their current standard of Windows O/S and MS Works on the desktop in these local units. They are considering Mandrake, Debian, Red Hat and Open Office because of their upfront costs. HP is quoting their system to include both the Windows O/S ($80) and MS Works ($15) for an overall software acquisition cost of $95 for the O/S and Application Suite The Open Source alternatives are $8.50 for the O/S of choice which is currently Madrake (Open Office is $0.00). As you can see, we have a price delta of $85 between the MS solution and the Open Source solution.

Is there anything we can do with/for HP to lower the O/S cost to become more competitive? Dell is quoting $30 for the O/S and the MS Works product team is giving us $25 for MS Works for a price point of $55 for the Dell software acquisition costs.

Microsoft talks about becoming “more competitive”. To understand what Microsoft means by that, this antitrust exhibit should be read.


Appendix: Comes vs. Microsoft – exhibit px08618, as text


From: Date Watanabe
Sent: Thursday, June 26, 2003 3:59 PM
To: Rick Wong; Rob Young (OEM)
Cc: Kurt Kolb
Subject: FW: LDS Church – Hewlett Packard
Attachments: RE: LDS – Open Source – Quick Update; RE: LDS – Open Source – Quick Update

I took this offline with our guy, Brad, but I think we should be concerned that they are breaking out the OS separately.

Dale

From: Dale Watanabe
Sent: Thursday, June 26, 2003 12:09 PHM
To: Brad Beadles
C¢: Bret Arsenault; Scott Johnson (DENVER); Tim Schmidt (DENVER); David Brandt (DENVER); Ann Nicholson
Subject: RE: LDS Church – Hewlett:t Packard

Brad,
1.. OEMs should NOT be quoting separate prices for OEM versions of OS and applications. If they are, they are violating their licensing agreement with us.
2, Given the fact that the prices that you quote from the OEM are no where near their true price from us, then the above is probably not a really issue, but the end user customer perception ends up getting skewed.
3. OEM OS prices are uniform based on volume, Anyone can figure out from IDC data, etc. that HP’s and Dell’s volume are virtually the same. We do not have any flexibility to change prices on a deal basis. But I don’t think that is the real issue here.

Please give me a call. Rather talk through this with you.

Dale
425- 706-8 796
Cell: 206-953-2233

From: Brad Beadles
Sent: Tuesday, June 24, 2003 4:31 PM
To: Dale Watanabe
Co: Bret Arsenault; Scott Johnson (DENVER); Tim Schmidt (DENVER); David Brandt (DENVER); Ann Nicholson
Subject: LDS Church – Hewlett Packard
Importance: High

Hi Dale,

Bret asked me to ping you with a competitive situation we are having with The LDS Church here in SLC. To net it out, HP and Dolt are their PC providers of choice. The Church has asked them to come back with systems that are under $500 for their local area offices and units around the world. This constitutes approximately 25,000 PC’s.

Outside of the hardware they are considering alternatives to their current standard of Windows O/S and MS Works on the desktop in these local units. They are considering Mandrake,

MS-CC-RN 000000784853
HIGHLY CONFIDENTIAL


Debian, Red Hat and Open Office because of their upfront costs. HP is quoting their system to include both the Windows O/S ($80) and MS Works ($15) for an overall software acquisition cost of $95 for the O/S and Application Suite The Open Source alternatives are $8.50 for the O/S of choice which is currently Madrake (Open Office is $0.00). As you can see, we have a price delta of $85 between the MS solution and the Open Source solution.

Is there anything we can do with/for HP to lower the O/S cost to become more competitive? Dell is quoting $30 for the O/S and the MS Works product team is giving us $25 for MS Works for a price point of $55 for the Dell software acquisition costs.

Regards,

Brad D. Beadles
Microsoft Corporation
801.257.6400

Utah Events and Information

http://microsoft.com/usa/offices/saltlake.asp

3/10/2005

MS-CC-RN 000000784854
HIGHLY CONFIDENTIAL

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

4 Comments

  1. John Nemeth said,

    April 12, 2009 at 8:44 am

    Gravatar

    Even if MS were totally free, their price wouldn’t be sufficiently low to be attractive, because thereafter one would be under their “influence,” which here is rejected as totally unacceptable and much too high a “price” to pay.

    I would pay the same price for a Dell, HP, etc. WITHOUT any OS, if the only option were to accept one with an OS from MS.

  2. SPM said,

    April 12, 2009 at 11:27 am

    Gravatar

    Including other things like advertising rebate could make the Windows price to come out less than zero (ie. Microsoft is paying the OEM not to offer Linux).

    Roy Schestowitz Reply:

    We have obtained proof related to this.

  3. Scott said,

    April 12, 2009 at 11:38 am

    Gravatar

    I was expecting to be shown how MS reduces their prices below that of Open Source. Instead, they still can’t even match the price. And they never will. What they will have to do is compete on features and quality. And that won’t work any better. They can never be as nimble with development as world-wide collaborative effort can be. The waves of free and Open Source software will continue to erode the rock of monopoly market share.

What Else is New


  1. New Paper About the UPC Explains Why It is Bad for Small- and Medium-sized European Businesses

    A detailed academic analysis of the Unitary (or Unified) Patent Court reveals/concludes/asserts that it is being marketed or promoted using a misleading premise and promise



  2. [ES] Gobiernos en Europa Todavía Activos en Contra de la Gerencia de la EPO

    Todavía hay trabajo político que está siendo hecho — aunque discretamente — contra Battistelli y sus chácales en la alta gerencia de la Oficina Europea de Patentes



  3. Links 3/5/2016: International Day Against DRM, 25th Anniversary of Linux (Kernel) Near

    Links for the day



  4. Interesting Supreme Court Cases About Patents in the United States

    A quick review of some of the latest developments regarding SCOTUS (the US Supreme Court) as far as patents go



  5. Governments in Europe Still Active Against EPO Management

    There is still political work being done -- albeit rather discreetly -- against Battistelli and his goons at the European Patent Office's top-level management



  6. The European Spam Office (EPO)

    EPO budget at 'work', days after doing copy-paste jobs and also working overtime in the weekend for an extravagant and needless/purposeless event (except for Battistelli's own pride)



  7. Not Just Benoît Battistelli and Willy Minnoye (EPO): Željko Topić Too Thinks He is Above the Law, Avoids the Judges and Courts

    The latest developments regarding some of the criminal complaints and civil lawsuits against Topić, who is now a Vice-President at the European Patent Office (EPO)



  8. Nefarious Forces for Patent Abuse and Software Patents in the United States, Australia, India, Korea, and Europe

    A roundup of news from the weekend and today, with emphasis on the elements inside the system (or the media) which push for regressive policies that benefit them financially at the expense of everybody else



  9. [ES] El Sistema de Patentes de los EE.UU: Donde Uno Desperdicia Años en Corte y Gasta $8,000,000 en Honorarios de Abogados Peleándo una Patente Falsa

    un sumario de noticias acerca de las patentes de software en los EE.UU. Y ha lo que han llevado, debido en gran manera al decline en calidad de las patentes por parte de la USPTO (dejando que otros se las arreglen limpiando el desórden)



  10. [ES] La Oficina Europea de Patentes Todavía Sigilósamente Abusiva, Pagará $15,000 en Compensasió a Trabajadora Tras un Tardío Fallo de la ILO

    La Organización Internacional del Trabajo (ILO) emite un fallo en un caso de abuso de la EPO y nota “la excesiva duración de los procedimienteos internos de apelación.”



  11. Links 2/5/2016: Linux 4.6 RC6, DragonBox Pyra

    Links for the day



  12. Links 1/5/2016: Wine 1.9.9, Devuan Jessie 1.0 Beta

    Links for the day



  13. The US Patent System: Where One Wastes Years in Court and Spends $8,000,000 in Lawyers' Fees Fighting a Bogus Patent

    A roundup of news about software patents in the US and what they have led to, owing in part to the USPTO's declining patent quality (leaving others to clean up its mess)



  14. The European Patent Office Still Silently Abusive, Will Pay $15,000 in Compensation to Female Worker After Belated ILO Judgment

    The International Labour Organisation (ILO) issues a judgment on a case of abuse by the EPO and notes "excessive length of the internal appeal proceedings."



  15. [ES] Alice Continúa Quebrando Patentes de Software Asi Que los Abogados de Patentes, Cabilderos de los Monopolistas, Etc. Ahora Atacan a la Corte Suprema por Hacer Esto

    los cabilderos Corpórativos y abogados de patentes están tratándo de poner a Alicia en la tumba, por su impacto en las patentes de software que es muy profundo y así hasta ahora casi indetenible



  16. [ES] ¿Cómo Salvar la Reputación de la EPO?: Crear Más Jurados de Apelaciónes en Europa y Abolir la Malgíada/Malintencionada Fantasía de la UPC

    Una crítica evaluación de lo que ocurre en la Oficina Europea de Patentes (EPO), la que rápidamente se está yendo para abajo (y degradando sobre todo) a el nivel de los sistemas Chinos, en conjuntamente con corrupción, los abusos, y la bajísima calidad de las patentes



  17. [ES] La Corte de Apelaciónes del Circuito Federal (CAFC) Acaba de Ponerse a Favor de los Trolles de Patentes

    la tristémente célebre CAFC, que manifestó las patentes de software en los EE.UU, acaba de dar un regalo a los trolles de patentes quienes típicamente usan las patentes de software para extorsión enc complicidad con los jueces del Este de Texas



  18. [ES] Análisis de los Últimos Datos de Lex Machina Acerca de la Litigación de Patentes Muestra Como está Declinándo

    el Professor Mark Lemley de Lex Machina resalta las tendencias en litigation al colectar y analizar datos relacionados con patente y concerniéntes a monopolios intelectuales en general; actualmente muestra una sequía de litigaciones (muestran que ha disminuído)



  19. [ES] La India Está Teniendo Otra Prueba de los Peligros de las Patentes Occidentales, Debe Aprender a Rechazar Completamente las Patentes de Software en Medio de Gran Presión

    El gigante de software que es la India continua enfrentándos ea la cruel y agresivo cabildeo de Occidente, haciéndo que este controle a la India por patentes que no deberían de existir en primer lugar



  20. [ES] Microsoft Dice que Continuará Extorsiónando a Compañías Que Distribuyan Linux, Usando Patentes de Software Usuallmente

    La guerra de Microsoft contra Linux, una guerra que es peleada usando patentes de software patents (por ganancias y/o por chantáje con arreglos empaquetados), todavía continúa a pesar de todas las tácticas de relaciónes públicas de Microsoft y sus sócios



  21. Alice Continues to Smash Software Patents So Patent Lawyers, Monopolists' Lobbyists Etc. Now Attack the Supreme Court for Doing This

    Corporate lobbyists and patent lawyers are trying to put Alice in the grave, for its impact on software patents is very profound and thus far almost unstoppable



  22. How to Salvage the EPO's Reputation: Create More Boards of Appeal in Europe and Abolish the Misguided UPC Fantasy

    A critical evaluation of what goes on at the European Patent Office (EPO), which is quickly descending down (and overall degrading) to the level of Chinese systems, along with the corruption, the abuses, and the low quality of patents



  23. Court of Appeals for the Federal Circuit (CAFC) Has Just Sided With Patent Trolls

    The notorious CAFC, which manifested software patents in the United States, has just given a gift to patent trolls that typically use software patents for extortion down in Texas



  24. Analyses of the Latest Data From Lex Machina About Patent Litigation Show Some Litigation Declines

    Professor Mark Lemley's Lex Machina highlights litigation trends by collecting and analysing data related to patents and pertaining to intellectual monopolies in general; now it shows litigation droughts



  25. India is Having Another Taste of the Dangers of Western Patents, Must Learn to Reject Software Patents in the Face of Great Pressure

    The growing software giant which is India continues to face cruel and aggressive lobbying from the West, enabling the West to control India by patents that should not exist in the first place



  26. Links 29/4/2016: GNOME 3.21.1, Fairphone

    Links for the day



  27. Microsoft Says It Will Continue to Extort Companies That Distribute Linux, Using Software Patents As Usual

    Microsoft's war on Linux, a war which is waged using software patents (for revenue and/or for coercion in bundling deals), is still going on in spite of all the PR tactics from Microsoft and its paid partners



  28. Australia Might be Next to Block Software Patents If Commission's Advice is Followed

    Australian advice against software patents, which can hopefully influence Australian politicians and put an end, once and for all, to all software patents in Australia



  29. [ES] ''Si la Forma de Pensar de la EPO fuese Seguida, Guantánamo Sería Posible en Suelo Alemán.”

    La EPO está todavía bajo fuego, pero mucho de ello pasa detrás de las cortinas y envuelve abogados y/o burócratas



  30. The European Copy-Paste Office (EPO)

    This morning's example (not the first) of how the EPO uses 'social' media


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts