We have known for a long time that the price hidden in consumer PCs was silly. Now we know it is silly for servers, too, even though the price may not be hidden…

“They were driving prices down and it eventually broke the pricing model,” Hilf said. “We sell the software for $1,000 and these guys were selling the hardware for $300. It was silly.”

Right from the horse’s mouth. A licence for 2003 etc is around $1000 and they have the nerve to charge per-seat on top of that. Silly. Hilf was talking about cripple-ware, too. Really silly.

For anyone who does not know, you can install Debian GNU/Linux on your server for just the cost of downloading/labour. No licence fee. Not silly. Smart. That includes all the bells and whistles:

• GNU/Linux, the OS
• OpenSSH, a great tool for managing systems and clusters remotely
• Apache web server, a standard on the web
• MySQL database or PostgreSQL databases
• PHP server scripting for rapid development or tweaking of existing scripts
• SWISH-e, a good search engine
• see more at Debian

It just takes a few minutes to install all this goodness. You can obtain the software and install it in much less time than you can purchase a copy of that other OS.  Then you can make it your own by customizing your site/services.

There is news that Office 2007 has been updated with new

• support for PDF
• support for ODF

OOPS! We had PDF about 2003 in OpenOffice.org version 1.1. We had ODF in 2005. That seems like lack of innovation for that other OS. You would think that one of the richest corprations in the software business could keep up but they only have about 10000 coders. The rest are salespeople. Salespeople don’t innovate. FLOSS has 300000 coders and counting. They innovate.

Go with the innovators. Go with FLOSS.

All over the web the trolls have regrouped and are attacking any who criticize M$ or praise FLOSS. Over at ComputerWorld, SJVN is heavily under attack for stating his opinions which are well-founded. At DesktopLinux.com, the trolls are becoming mellow in their old age finding ad hominem attacks are counter-productive. Here is an example:

“Linux can only succeed on the desktop if it can be offered by one of the major suppliers. So far, none of them want to take the time and expense needed to even try on any massive scale. The lesson of the netbook has been learned by all, too. Linux was an early offering, but XP now totally dominates sales. People did not flock to Linux at the price differential supported by the manufacturers.

There is no reason for the OEMs to try to offer a cheaper unit unless they can profit from the effort. If all they manage to do is sell the same number of computers to the same people but at a lower price, they have failed badly and will never recoup their costs of adding Linux.”

This sounds so sweet and reasonable, doesn’t it? This is just begging the question, politely. Suppose none of the major suppliers puts GNU/Linux on the desktop but all of the smaller players do. That’s about 42%, according to IDC. OEMs of all sizes will have to push GNU/Linux on netbooks if the small guys do. Small operations all over China are cranking out netbooks based on ATOM, VIA and ARM. It is all good.

Only a few weeks ago, the trolls were overrun by positive comments about GNU/Linux on the web. They have regrouped and are trying different tactics but they are still trolls. The willingness of manufacturers to push GNU/Linux puts the lie to the comment quoted above. The cost of not adding GNU/Linux to the mix is loss of business as the unit price/ASP drops. They have to increase volume to compensate. The OEMs who add needless features to keep their prices up will be in the same leaky boat as M$ by next year.

On Amazon.com, I found about 200 “netbooks” and 33 “netbooks linux”. Amazon even suggested I search for “netbooks linux” as a related search. They must be getting a few hits. Prices ranged from $200 to $735 for Linux and $285-$1300 for that other OS. No room to hide at the low end and the low end is creeping up. By next year, GNU/Linux will be competing with that other OS on every type of PC in every price range. The trolls will not accept that GNU/Linux sells until the roller passes over. They are either well paid or in denial.

ECIS, the European Committee for Interoperable Systems, has gained intervenor status in the EU v M$, a case about tying the IE browser to that other OS. ECIS published a report that documents well the long history of anti-competitive acts and harm to consumers done by M$. You must read it.

Here are some excerpts:

“This anti-trust thing will blow over. We haven’t changed our business practices at all.”
— Bill Gates, Microsoft founder and then-CEO (1995)3
“

“If we own the key “franchises” built on top of the operating system, we dramatically widen the “moat” that protects the operating system business…. We hope to make a lot of money off these franchises, but even more important is that they should protect our Windows royalty per PC…. And success in those businesses will help increase the opportunity for future pricing discretion.8
“
” Most operating systems are purchased by original equipment manufacturers (“OEMs”), such as Dell and HP. OEMs preinstall operating systems on the computers they manufacture before selling the computers to consumers. In the late 1980s, Microsoft began requiring OEMs to pay Microsoft a “per processor license fee” for each computer they shipped, regardless of whether they installed Windows on the computer.28 This arrangement gave OEMs a powerful incentive not to pay for and install competing operating systems. In 1994, the U.S. Department of Justice (“DOJ”) filed an antitrust suit against Microsoft challenging this conduct, resulting in a consent decree under which Microsoft agreed to stop using per processor license fees.29 But the anticompetitive practice had already been quite effective in reducing competitors’ share, particularly when combined with Microsoft’s other actions directed against DR-DOS.30 The DOJ consent decree also sought to impose some forward-looking relief by prohibiting Microsoft from bundling other products into its now-dominant Windows operating system. The decree included a proviso that permitted Microsoft to build “integrated” products, however, and Microsoft later took the position that, under the
decree, it could bundle “‘a ham sandwich’ in the box with a PC preinstalled with Windows 95”and “require OEMs to take the whole package.”31

“

” Also in the mid-1990s, Microsoft took a series of steps to punish IBM for promoting a competing operating system and personal productivity application suite. At the time, in addition to developing software in competition with Microsoft, IBM was also a major OEM, selling personal computers. As such, IBM was a major customer of Microsoft’s. Microsoft retaliated against IBM for developing competing software products by charging IBM discriminatorily high license prices for Windows, delaying licensing negotiations with IBM for Windows 95, and withholding technical support.33 Microsoft informed IBM executives that it would only stop treating IBM less favorably than other OEMs when IBM ceased competing with Microsoft’s software offerings.34 This resulted in $180 million in lost revenue for IBM,35 and other damages IBM eventually brought suit against Microsoft and Microsoft settled the claim for $775 million.36
“

This goes on for 33 pages and leaves no doubt that M$ is not a reliable provider of IT in an open market. There are details of which I was not aware but this document puts everything in one place. I was not involved with servers in the 1990s so I was interested to read how M$ obtained dominance in servers on the LAN. Embrace, extend, extinguish all the way. They kept changing things so that no one could interoperate with them. I saw that in my recent struggle to get a terminal server running GNU/Linux to authenticate with 2003. What a waste of time and barrier to migration. How much easier it would have been to start up LDAP and use only GNU/Linux but how many organizations of any size want to expose their accumulated data to a risky/uncertain changeover?

M$ is a monster. It is horribly real. We must avoid dealing with it as customers. Let is starve. How sad that justice is so delayed in these matters.

Business Week has published what seems to be a reasonable analysis of M$’s business plan.

• sell XP to OEMs for $15 to hold back GNU/Linux – this didn’t work
• advertise to steer people from Macs – nope, people want quality
• push multi-grade 7′s onto everything – no chance, there are not enough suckers to pay for a crippled version and upgrade for a fee. That reveals the price they have been hiding all these years.

The preceding annotations are mine, not Business Week’s.

This looks like M$ is playing defense. They are really going to have to pump up the budget for advertising to pull this off. It will not work, though, because everyone has seen Macs and GNU/Linux and they know M$’s stuff is not worth a premium in price.

$15 is no bargain for XP if you have to shell out bucks for anti-virus, periodically re-install due to corruption and fragmentation, and the thing gets slower with use. Compare it with a cell phone. As long as you do not bend, fold, staple or mutilate it, about all you have to do to maintain it is change the battery every few years. Compared to that XP is very high maintenance. Selling the new licences is going to be tough. People hate to spend money for nothing which is what M$ demands.

The market is bigger and wiser than M$ wishes it to be. The recession is provoking thought in IT. Some may get fired for buying M$. Some may choose to spend money wisely. It’s all good.

We should know in a couple of years whether the plan succeeds. I expect it will succeed in some measure but the high profit margin is over and shareholders will probably seek some revenge as will customers who wake up and realize how much time and money they have wasted on that other OS.