More Heavy Handed Actions By Microsoft Driving Companies To Open Source Software

from the piracy-is-the-least-of-their-problems dept

Tue, Mar 10th 2009 11:02pm — Mike Masnick

Some of the big proprietary software companies keep insisting that "piracy" is a big threat to their business (even if they quietly will admit that they actually benefit from piracy). After all, would a proprietary software company prefer that someone uses a competing product over using an unauthorized version of their software? In almost all cases, they'll prefer the unauthorized version, recognizing that it's much more likely to lead to future sales. So why do they keep taking actions that lead people to go to alternatives -- usually of the open source variety? The latest examples comes to us via Slashdot, which points out that in the spectacularly bankrupt country of Iceland, Microsoft has been pushing hard to get Microsoft resellers to pay up for licenses they sold to companies. The problem is that thousands of those underlying companies have gone bankrupt -- but Microsoft insists the resellers still need to pay. Their response has been to stop selling Microsoft products all together, and focus on open source alternatives instead. Perhaps it doesn't matter so much in a small, bankrupt country -- but these sorts of things have been happening elsewhere as well, and will quickly drive Microsoft customers right into the hands of competing products.

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Filed Under: competition, iceland, piracy, software
Companies: microsoft

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Anonymous Coward, 11 Mar 2009 @ 12:32am

you'd be surprised how many ppl i know are switching to ubuntu, i even got my self a copy: with the LiveCD/Persistence you can try and test it with out having to install anything of ur hard drive.
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Jayarajan, 11 Mar 2009 @ 1:48am

Open Office
I have a laptop preloaded with Win XP. I haven't bought MS office, instead I use openoffice. Advantage is seamless opening of MS docs and saving it as MS docs. please visit Linuxalt.com for open source equivalents. 90% of the government purchases are now Linux.
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Taylor J, 11 Mar 2009 @ 1:50am

Ubuntu
I got tired of the same shody problems no matter the user or configuration with Windows. Two years ago I hesitantly (I was at my wits end with MS) tried Ubuntu. The learning curve was much quicker than windows was in the beginning. Ubuntu has come a long way in the past two years, and with the plethora of coders working to meet their own needs the new stuff that comes through it often is amazing. Do some youtube searches and check out the Live CD. It's all free!
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PaulT (profile), 11 Mar 2009 @ 2:34am

Licensing and activation problems, DRM, malware, proprietary formats... let's face it, most people want to do relatively simple things with the computers that open source software is more than capable of doing. The only reason people put up with any of the above is because they're brainwashed into thinking it's normal - but they're starting to wake up. If Microsoft actually had a level playing field in the OS market (e.g. Windows not forced onto most new PCs for the last 2 decades), I have no doubt they'd have about half the market share they do now.

If Windows 7 doesn't get a fantastic reception, and Adobe and Blizzard decide to make native clients for their major products (it's much hinted they will if enough of their client base admit to using Linux), the next couple of years could get very interesting.
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George Orwell, 11 Mar 2009 @ 2:43am

Yellow Yellow Toil and Trouble
Great propagation of yellow journalism. Living in Iceland I know that the debt will eventually likely equal a year's GDP after renegotiation and asset liquidation. There has been no hoarding of food and cash. And I have yet to see a car on fire. We have social safety nets. You have fallen off the tightrope and are staring at concrete on the way down. The U.S. debt clock says you are at $11-trillion in debt. Since your GDP is $13.84-trillion are you not in as much trouble as you claim Iceland is?
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Lawrence D'Oliveiro, 11 Mar 2009 @ 2:45am

Could Be Good, Could Be Bad
I’m not sure I’m looking forward to proprietary vendors with Windows products bringing their stuff over to Linux. A lot of the problems with Windows are precisely because of the crap perpetrated by third-party vendors, hijacking file associations, overriding config settings, planting questionable hooks into lower OS layers, all that kind of nonsense.

Open-source systems remain modular and well-behaved precisely because everybody knows the rules, and anybody who releases code that flouts them very quickly gets their mistakes pointed out to them. And if they won’t mend their ways, somebody will fix their code for them.
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Lawrence D'Oliveiro, 11 Mar 2009 @ 2:48am

Actually ...
... would be kind of fun to see an entire country do an Ernie Ball, wouldn’t it?
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PaulT (profile), 11 Mar 2009 @ 3:01am

Re: Yellow Yellow Toil and Trouble
Do you have anything to comment on regarding the actual article here, or are you just bitching about the linked Vanity Fair article?

If the latter, maybe you should direct your ire at those who actually wrote it, rather than a blog using a legitimate mainstream journalistic source as a small aside on one of its articles?
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R. Miles, 11 Mar 2009 @ 3:49am

Bullying isn't the only reason people switch.
When it comes to Microsoft products, I'm faced between software which I must have vs. open source software.

As a web developer, Microsoft has some damn great software for developing in .NET which no open source product has yet to match, but when it comes to other software, open source is the way to go.

I use Office only to maintain compatibility, but I am not happy with the direction Microsoft took with the latest version just to "embed" it into their crap Vista OS. While some open source software does work okay, admittedly, Office still owns the market.

It's nice to have both options, but as Microsoft continues to "improve" (aka, embed tons of overhead which adds extraordinary difficulty to its software) products, people find alternatives just to stick with the basics.

Really, most people who own computers don't come close to using them to their full potential. Checking email and surfing the web can be done with the minimal of "specs". Gamers, of course, need more.

So why doesn't software stick to basics anymore? Thank goodness most open source is basic, and the add-ons give the flexibility.

Microsoft can learn from this model, especially by giving the basic version away for free and charging for valued add-ons some consumers may want.
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Skeptical Cynic (profile), 11 Mar 2009 @ 4:06am

It's not hand but what the hand is carrying that...
is causing people to consider alternatives. The bill. We call it the M$ tax. Every new version of software they come out with also comes with a bigger cost. And things that were included in the cost of the old software is now extra or has been moved to a more expensive version.

Example it use to be that when you bought XP Pro it counted as a terminal server client access license now they cost around $99 per. Another example is with Office programs that use to be included in the low end versions are now only in the upper versions.

I have been in the IT business for over 15 years and all along we have been selling MS products. But we are increasingly offering alternatives for more than one reason.
We are getting less from MS for selling their software and our clients want to spent less. Especially when the cost of the MS Office is almost as much as the computer.

I just had a client add a new employee his cost for the computer was $550.00 from Dell. He had to pay $99 for the XP downgrade, and then, because it's a new computer, he had to pay full price for Office which cost him $279.00.

Well the same computer with Ubuntu $450.00. So the M$ tax was $100+$99+$279. $478 just for the basics. And that $279 is actually a discounted price!

In economic times like now that who really wants to pay that?
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Superdude, 11 Mar 2009 @ 4:20am

I think George Orwell is missing the point
This article is a criticism of Microsoft, not a yellow journalism story about the economy. Complaints about MS products, or defending them make sense, but why bring the GDP of Iceland into it?
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Simmer down now, 11 Mar 2009 @ 5:41am

Re: Yellow Yellow Toil and Trouble
I don't think anyone's really trying to talk smack about Iceland here... This is a tech blog, and they're talking about Microsoft. No need to be so defensive on the internet.
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JohnForDummies (profile), 11 Mar 2009 @ 5:45am

Umm...
The article has a lot to do with Iceland, as that's where the resellers are being made to pay up for the licenses they sold and then have received no payment for... But who has time to read the whole story here, or at slashdot, right?

I think people are missing a big point--The resellers aren't going out and just giving away open source software, they're in business to make money. They still have to put food on the table. They are likely selling "support" for open source software. While they are probably not making as much as they did selling MS products, they also don't have as much to lose if someone doesn't pay. And they don't owe anyone else any money, including the people who originally wrote the software.

So... is it better to pay a third party for support for software they didn't write if they have no connections with the original creators? When they were selling MS products, if there was a problem, it would have been resolved through MS support. But now dealing with open source software, does the company that buys support go through the reseller for support? Or does the reseller refer the end user to a support forum where every other answer is "RTFM"? While one could argue that since it's open source, the end user can just fix things themselves, but in my experience, not every company has a team of developers, and if they do, they're busy working on in-house software. That's the reason they purchase software and support from other companies in the first place.

And why does everyone start bringing up Linux vs. Windows? Most resellers are not selling Windows, but they are selling software (and support for that software) that runs on Windows--ie, Office, Visual Studio, etc. It's typically the job of the people leasing the computers (IBM, Dell, HP) to work out the licensing for the operating systems (whether it's Linux or Windows) at the time of the lease.
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Anonymous Coward, 11 Mar 2009 @ 6:26am

Re: It's not hand but what the hand is carrying that...
There's a lot of people willing and desiring to pay that.

If Ubuntu solves your problems so well, then why do you worry about what Microsoft does?

If you get down to the brass tacks, the $550 for the computer is so overblown for a pile of sand and some metals.

I don't understand why people think that Intellectual Property should be free. There is no such thing as a free lunch. Someone has to pay the guys who develop the code. Assuming that the "cost of code" is to be recovered in support contracts only makes the cost of support more expensive.

I see so many people in a bookstore who read a magazine and then put it back. The folks who publish the magazine put a lot of work into it to create it. $5 for the information which was useful enough to read isn't ridiculous to pay.

Paying Microsoft 16 cents a day ($279/5yrs/365days) is a heck of a lot less than the coffee that you are going to buy during the same period.
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Anonymous Coward, 11 Mar 2009 @ 6:31am

Re: Yellow Yellow Toil and Trouble
With our new president we are in a much, much more trouble, the plague this bastard is bring will make the great depression seem like a walk in the park. Look to see him declaring martial law before the next election. It's sad seeing the final years of a once great nation.
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Ben Matthews, 11 Mar 2009 @ 7:21am

This article shows a complete lack of business sense
You prefer open source software, I can understand that.

You think MS products are too expensive even if you do prefer them so you go with a cheaper or free alternative, totally on board with you there too.

But basically this article is calling MS audacious for trying to collect payment on an agreed upon contract. The amount of BS that could fly all over if there was a clause in an MCP contract with MS that said "If one of your clients can't pay, you aren't liable to pay us anymore" would be incredible. It's the MCP's job to collect from the company for what they sell, even in bankruptcy, and then to pay MS. I don't know how bankruptcy in most other countries work, but part of the filing will allow debt to be repaid by selling off assets or restructuring; thats the whole point of filing.

This isn't some evil by MS. This is simple business. If you had a business where you sold to resellers, would you act differently? Just let them off the hook if they said "Well one of our customers can't pay, so we aren't going to pay you."

The rest of the article goes on to say how OpenOffice is just better, which is a total matter of opinion, and how dare MS integrate their software, Navision, with another one of their products, Excel, and not the open source alternative. Come on man, really?

The article then goes on to point out how a business handled itself poorly, can't find a way to monetize their business well which lead to very weekly thought out layoffs, and that means MS "Skull f**ked them."

MS has positioned themself well in the market. Thats good business. Look up Porter's five forces, MS just did a good job making themself a standard and people are complaining that their products are now prefered.

I rarely comment, but this article is really just a rant posted by a naive open source fanboy who hates MS, and has a poor understanding of business. Being a fan boy doesn't bother me, and neither does the ranting, but I am confused as to why Techdirt gave it creedence.
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Anonymous Coward, 11 Mar 2009 @ 9:50am

Russia Realizes That Free Software Beats Sending Principals To Siberia For Piracy
Why are you surprised?

Remember this story where Microsoft threatened to send a School Principal to a Siberian Prison and even Mikhail Gorbachev got involved?

http://www.techdirt.com/articles/20081023/1940392633.shtml
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Anonymous Coward, 11 Mar 2009 @ 11:12am

Re: Re: It's not hand but what the hand is carrying that...
just because you read something, doesn't mean it provided anything useful. I frequently skim magazines to see if there is anything I haven't read about and amd almost always constantly disappointed with month old news talked about like it was new.
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Joel Shopmaker, 11 Mar 2009 @ 12:03pm

Re: This article shows a complete lack of business sense
[B]asically this article is calling MS audacious for trying to collect payment on an agreed upon contract.

True, but the economic reality is that many previously agreed upon contracts are unsuitable in the current economic conditions. Consider cutbacks levied upon many companies internal and contractual workforces.

The amount of BS that could fly all over if there was a clause in an MCP contract with MS that said "If one of your clients can't pay, you aren't liable to pay us anymore" would be incredible. It's the MCP's job to collect from the company for what they sell, even in bankruptcy, and then to pay MS.

So it seems you are your suggesting companies should maintain enforceability of their contracts which may force companies into bankruptcy? That's probably not the best route given current economic circumstances. The IT realm consists of a small group of vendors and competing technologies. Word travels fast.

This isn't some evil by MS. This is simple business.

Sure, but again, lack of foresight to controllable issues may present a much larger risk to future partnerships and profitability.

OpenOffice is just better, which is a total matter of opinion.

An opinion can provide insight to options for those who desire to look to alternatives. If an alternative can offer even 75% of the same functionality, (like OpenOffice) it could be a viable alternative.

how dare MS integrate their software, Navision, with another one of their products, Excel, and not the open source alternative. Come on man, really?

Who said anything about Navision? While it sounds like platform lock-in, SAP BusinessONE can do similar, so can many OSS options.

The article then goes on to point out how a business handled itself poorly, can't find a way to monetize their business well which lead to very weekly thought out layoffs...

This is the business climate we live in. The DOW has lost 1/2 of it's value in the past year. This means less working capital for many businesses.

and that means MS "Skull f**ked them."

What is that supposed to mean?

MS has positioned themself well in the market. Thats good business.

MS's model is based on mergers and acquisitions of competing technologies.

MS just did a good job making themself a standard and people are complaining that their products are now prefered.

Based on this business decision, some companies may want to seek alternatives to triage future risk.
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matt, 11 Mar 2009 @ 1:03pm

question about vista price
What I do not understand is this--

How come I can go buy a computer for $349 new at a big box store that comes with Vista Premium on it,

but

If I build my own computer and want to install Vista, I have to go to the same big box store and pay $300 just for the operating system.

Can someone explain this? I do not understand why the person buying a junk computer seems to get the operating system for free but the guy who wants to build a machine using half decent parts has to pay a small fortune?
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Dan, 11 Mar 2009 @ 1:40pm

Re: question about vista price
Because they can. Now you are starting to understand the underlying logic to open source free software. Its all about freedom from monopolies and vendor lock in. Its not all about price, its about being forced to pay the price. So now you have options.
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Lawrence D'Oliveiro, 11 Mar 2009 @ 2:23pm

Re: Umm...
JohnForDummies wrote:

But now dealing with open source software, does the company that buys support go through the reseller for support?

Well, they’re no longer “resellers” of software, but if they’re “sellers” of support, then why not buy some of what they’re selling? With Open Source it’s your choice.

While one could argue that since it's open source, the end user can just fix things themselves, but in my experience, not every company has a team of developers, and if they do, they're busy working on in-house software.

The reason why they’re so busy is because they’re having to reinvent so many wheels for themselves. Whereas with Open Source, they could use software that somebody else has already done as a starting point, and build on top of that.

And at the same time they will gain expertise in that Open Source software, thereby making themselves more able to handle their own support. And perhaps provide support to others (for a fee, even).

That’s the thing with Open Source: so many objections to it are full of implicit assumptions carried over from the closed-source way of doing things, it takes time for people to realize that it represents a fundamental shift in how you view things.

Just like many of the other issues being argued here on Techdirt, really.
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Lawrence D'Oliveiro, 11 Mar 2009 @ 3:43pm

Microsoft and Netbooks
Microsoft’s real problem is the rapidly-burgeoning netbook market. These little machines are so cheap that the price of a copy of Windows becomes the single biggest item on the bill of materials.

To keep Linux from gaining too much of a foothold (it already has 20% of this market), Microsoft has been forced to offer Windows at a cut-down price. And not its latest-and-greatest Windows Vista, which is just too resource-hungry to run on these little machines, but old, obsolete, supposed-to-be-end-of-lifed Windows XP.

Soon Microsoft is going to introduce Windows 7, which is supposed to be resource-light enough to run on a netbook. But what is it going to do about the price? Its profits are sagging, so it needs to get customers to pay more for their OS. So it’s got the bright idea of offering a cut down “Starter Edition” version of Windows, which among other things limits you to running no more than 3 apps at once. It’s hoping that this will be enough of an annoyance that customers will want to shell out the extra bucks to upgrade to a “proper” edition of Windows.

Will this work? Or will it drive even more customers to Linux?
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Diablo990, 14 Mar 2009 @ 1:13pm

Keep Pushing Microsoft
The quote from PaulT :Licensing and activation problems, DRM, malware, proprietary formats. It's all about Microsoft Monopolio. If since begining microsoft would not be so GREED, Open Source would not exist. The best day for the humanity is the day Microsoft will be belly up. Those Dummies at the Monopolistic Microsoft think that pushing hard is going to save their company from disappear, and all they do is the push hard to exactly that: to disappear. So I don't criticize them anymore for their stupid business decisions, the way around: !!! Keep pushing hard Microsoft !!! so one day, your gonna make my day.
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