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

08.19.08

OEM Tactics: Lessons to Learn from BeOS About GNU/Linux

Posted in Antitrust, Dell, GNU/Linux, Hardware, HP, IBM, Law, Microsoft, OLPC, Xandros at 12:41 pm by Dr. Roy Schestowitz

“I once preached peaceful coexistence with Windows. You may laugh at my expense — I deserve it.”

Be’s CEO Jean-Louis Gassée

G

NU/Linux laptops continue to arrive, but Microsoft is working hard to end this. It ought to be emphasised that ASUS has already said that it is now “tied up” with Microsoft [1, 2, 3]. ASUS is not the only one to have come under such imprisonment a relationship, but it incidentally spoke out about it. It’s the usual pressure tactics, whose goal is to have distribution of Linux curtailed or neglected.

There’s lots more to to speculate about. ASUS picked Xandros, which has some iffy past with Microsoft, never mind under the Corel flag.

More worryingly, have people forgotten that Xandros is a patent ally of Microsoft? In simple terms, despite the claims from the CEO of the company, ASUS is carrying a liability which can then be passed to users in the form of burden/cost that’s brought as incentives to Microsoft. This is extortion. Software patents are void in this case as nothing was ever shown.

OEM pressure tactics were covered quite extensively before, but a reader has sent us a pointer to the following strong message from 1999. We reproduce it below. The anonymous reader added: “Here’s an interesting comment with first hand experience about how hard it is to overcome Microsoft.”


Jean-Louis Gassée on why PC manufacturers don’t sell non MS products

* To: info-policy-notes <info-policy-notes@essential.org>
* Subject: Jean-Louis Gassée on why PC manufacturers don’t sell non MS products
* From: James Love <love@cptech.org>
* Date: Fri, 26 Feb 1999 12:05:55 -0500
* Organization: http://www.cptech.org
* Sender: jamie@essential.org

This important essay by Jean-Louis Gassée is a devastating
critique of the 1995 DOJ/Microsoft consent agreement and
a clear explanation to the barriers facing MS competitors
in the OS market.
Jamie

http://www.be.com/aboutbe/benewsletter/volume_III/Issue8.html#Gassee

Be Newsletter
Volume III, Issue 8, February 24, 1999

Crack in the Wall
By Jean-Louis Gassée

You’re the CEO of a PC OEM, delivering some great news to Wall
Street: “In an effort to offer greater variety and performance
to the customer, our factory now installs three operating systems
on the hard disk — Windows, Linux, and the BeOS. The reaction
has been spectacular. Customers love having a choice of OS, and
the press — from John Dvorak in PC Magazine to John Markoff in
the New York Times to Walt Mossberg in the Wall Street Journal –
has heralded us for our bold move. This is a great step forward for
the consumer and for the industry. Oh, and by the way, we lost
$50 million since we no longer qualify for Windows rebates. But it’s
a sacrifice for the common good.”

You’re now the ex-CEO of a PC OEM.

We know that the Windows rebate scheme exists — but what *is* it,
exactly? And why are so many OEMs afraid of losing it? Windows
pricing practices are closely guarded secrets, so we don’t know
exactly how the rebate is structured, but we can assume that it works
something like this: The total cost of a Windows license consists
of a base price offset by a rebate. The base price is set; the
rebate is flexible, and contingent on the “dedication” of the licensee.
That is, the more you “advertise” the product — through
prominent positioning, expanded shelf space, and so on — the
greater your rebate. This quid pro quo rebate looks innocent enough,
and can be a useful tool in a competitive market.

But when you’re running a monopoly — and when it comes to
out-of-the-box, consumer-grade PC clones, Microsoft *is* a monopoly –
“prominent positioning” and “expanded shelf space” have little meaning.
Microsoft has no interest in getting “more” footage on the OS shelf,
because they’ve already got it all. What interests them — the only
useful advantage they can “buy” (to be kind) with
their rebate — is to ensure that no one else will get any.

So how is “dedication” measured? A real-life example: We’ve been
working with a PC OEM that graciously — and bravely — decided to
load the BeOS on certain configurations in its product line. However,
there’s a twist in their definition of “loading.” When the customer
takes the machine home and starts it up for the first time, the
Microsoft boot manager appears — but the BeOS is nowhere in sight.
It seems the OEM interpreted Microsoft’s licensing provisions to mean
that the boot manager
could not be modified to display non-Microsoft systems. Furthermore,
the icon for the BeOS launcher — a program that lets the user shut
down Windows and launch the BeOS — doesn’t appear on the Windows
desktop; again, the license agreement prohibits the display of
“unapproved” icons. To boot the “loaded” BeOS, the customer must read
the documentation, fish a floppy from the box and finish the
installation. Clever.

One suspects that Linux suffers from the same fealty to Microsoft’s
licensing strictures. Linux is the culmination of 30 years of
development by the Unix community. Surely an OEM can’t complain
about Linux’s quality or its price: It’s good, and it’s free. If
Microsoft licensees are as free to choose as Microsoft claims they
are, why isn’t Linux factory installed on *any* PC?
If you randomly purchase 1,000 PC clones, how many have any OS other
than Windows loaded at the factory? Zero.

But what about all these announcements from companies such as IBM,
Dell, and others? A few URLs are supplied here for your convenience:

<http://www.dell.com/products/workstat/ISV/linux.htm>
<http://www.compaq.com/isp/news_events/index.htm>
<http://www.compaq.com/newsroom/pr/1998/wa111298a.html>
<http://www.hp.com/pressrel/jan99/27jan99.htm>
<http://www.hp.com/pressrel/jan99/27jan99b.htm>
<http://www.software.ibm.com/data/db2/linux/>

If you parse the statements, Linux is offered and supported on servers,
not on PCs. Another IBM story is that installation is to be performed
by the reseller on some PCs or laptops, not by IBM at the factory.

As an industry insider gently explained to me, Microsoft abides by a
very simple principle: No cracks in the wall. Otherwise, water will
seep in and sooner or later the masonry will crumble.

Guarding against even the smallest crack is important to Microsoft,
because it prevents a competitor from taking advantage of a phenomenon
that economists call the “network effect.” The “network effect”
manifests itself as an exponential increase in the value of a product
or service when more people use it. Applied to a computer operating
system, the effect works like this: As more people install and use an
OS, the demand for applications increases. Developers respond to the
demand, which attracts the attention of OEMs and
resellers, who promote the OS in order to sell the apps, which attracts
more customers… The key to all this is distribution and visibility —
in other words, “shelf space.”

Bill Gates understands the network effect well — he once quoted it to
me, chapter and verse. In the Fall of 1983, when I was still running
Apple France, I met with Bill in Paris and we got into a conversation
regarding the market share limitations of DOS. No problem, he said, with
the wide distribution we enjoy, we’ll get the attention of third
parties, and the marketplace will fix these shortcomings.

This puts statements by senior Microsoft executive Paul Maritz in
perspective. In reaction to my claim that Be wants to co-exist with
Microsoft, Mr. Maritz said (as quoted by Joseph Nocera in Fortune
Magazine):

“[Gassee is] articulating his strategy for entry into the
operating system marketplace. But on the other hand, I
know that Be has built a full-featured operating system,
so what I believe he’s doing here is outlining his
strategy about how he will initially co-exist with Windows
and, over time, attract more applications to his
platform.”

Mr. Nocera interpreted Mr. Maritz’s interpretation thus:

“In other words, Gassee’s spiel is little more than a
trick intended to lull Microsoft. But Microsoft isn’t so
easily fooled! Microsoft will never ignore a potential
threat to its Windows fortress, no matter how slight. The
software giant may be in the middle of an antitrust trial,
but — as Andy Grove says — only the paranoid survive…”

[The entire article, part of a court house diary, can be found
at <http://www.pathfinder.com/fortune/1999/03/01/mic3.html>.]

Industry sages such as T.J. Rodgers, the CEO of Cypress Semiconductors,
as well as venture capitalists aligned with Microsoft, criticize the
Department of Justice’s intervention in the new Pax Romana we’re
supposed to enjoy under Microsoft’s tutelage. Don’t compete in court,
compete in the marketplace, they say.

I’m a free marketer myself; I left a statist environment for the level
playing field created by the rule of law in this, my adopted country. A
free market is *exactly* what we want. One where a PC OEM isn’t
threatened by financial death for daring to offer operating systems
that compete with the Windows monopoly.

We started with a thought experiment. We end with a real-life offer for
any PC OEM that’s willing to challenge the monopoly: Load the BeOS on
the hard disk so the user can see it when the computer is first booted,
and the license is free. Help us put a crack in the wall.


This is not a healthy state of trade, is it? Intel is constantly accused of using the same tricks and breaking the law.

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

What Else is New


  1. Links 23/4/2018: Second RC of Linux 4.17 and First RC of Mesa 18.1

    Links for the day



  2. The Good Work of the Patent Trial and Appeal Board (PTAB) and the Latest Attempts to Undermine It

    A week's roundup of news about PTAB, which is eliminating many bad (wrongly-granted) patents and is therefore becoming "enemy number one" to those who got accustomed to blackmailing real (productive) firms with their questionable patents



  3. District Courts' Patent Cases, Including the Eastern District of Texas (EDTX/TXED), in a Nutshell

    A roundup of patent cases in 'low courts' of the United States, where patents are being reasoned about or objected to while patent law firms make a lot of money



  4. The Federal Circuit's (CAFC) Decisions Are Being Twisted by Patent Propaganda Sites Which Merely Cherry-Pick Cases With Outcomes That Suit Them

    The Court of Appeals for the Federal Circuit (CAFC) continues to reject the vast majority of software patents, citing Section 101 in many such cases, but the likes of Managing IP, Patently-O, IAM and Watchtroll only selectively cover such cases (instead they’re ‘pulling a Berkheimer’ or some similar name-dropping)



  5. Patents Roundup: Metaswitch, GENBAND, Susman, Cisco, Konami, High 5 Games, HTC, and Nintendo

    A look at existing legal actions, the application of 35 U.S.C. § 101, and questionable patents that are being pursued on software (algorithms or "software infrastructure")



  6. In Maxon v Funai the High 'Patent Court' (CAFC) Reaffirms Disdain for Software Patents, Which Are Nowadays Harder to Get and Then Defend

    With the wealth of decisions from the Court of Appeals for the Federal Circuit (CAFC) wherein software patents get discarded (Funai being the latest example), the public needs to ask itself whether patent law firms are honest when they make claims about resurgence of software patents by 'pulling a Berkheimer' or coming up with terms like “Berkheimer Effect”



  7. Today's European Patent Office Works for Patent Extremists and for Team UPC Rather Than for Europe or for Innovation

    The International Association for the Protection of Intellectual Property (AIPPI) and other patent maximalists who have nothing to do with Europe, helped by a malicious and rather clueless politician called Benoît Battistelli, are turning the EPO into a patent-printing machine rather than an examination office as envisioned by the EPC (founders) and member states



  8. The EPO is Dying and Those Who Have Killed It Are Becoming Very Rich in the Process

    Following the footsteps of Ron Hovsepian at Novell, Battistelli at the EPO (along with Team Battistelli) may mean the end of the EPO as we know it (or the end altogether); one manager and a cabal of confidants make themselves obscenely rich by basically sacrificing the very organisation they were entrusted to serve



  9. Short: Just Keep Repeating the Lie (“Quality”) Until People Might Believe It

    Battistelli’s patent-printing bureau (EPO without quality control) keeps lying about the quality of patents by repeating the word “quality” a lot of times, including no less than twice in the summary alone



  10. Shelston IP Keeps Pressuring IP Australia to Allow Software Patents and Harm Software Development

    Shelston IP wants exactly the opposite of what's good for Australia; it just wants what's good for itself, yet it habitually pretends to speak for a productive industry (nothing could be further from the truth)



  11. Is Andy Ramer's Departure the End of Cantor Fitzgerald's Patent Trolls-Feeding Operations and Ambitions?

    The managing director of the 'IP' group at Cantor Fitzgerald is leaving, but it does not yet mean that patent trolls will be starved/deprived access to patents



  12. EPO Hoards Billions of Euros (Taken From the Public), Decreases Quality to Get More Money, Reduces Payments to Staff

    The EPO continues to collect money from everyone, distributes bogus/dubious patents that usher patent trolls into Europe (to cost European businesses billions in the long run), and staff of the EPO faces more cuts while EPO management swims in cash and perks



  13. Short: Calling Battistelli's Town (Where He Works) “Force for Innovation” to Justify the Funneling of EPO Funds to It

    How the EPO‘s management ‘explained’ (or sought to rationalise) to staff its opaque decision to send a multi-million, one-day ceremony to Battistelli’s own theatre only weeks before he leaves



  14. Short: EPO Bribes the Media and Then Brags About the Paid-for Outcome to Staff

    The EPO‘s systematic corruption of the media at the expense of EPO stakeholders — not to mention hiring of lawyers to bully media which exposes EPO corruption — in the EPO’s own words (amended by us)



  15. Short: EPO's “Working Party for Quality” is to Quality What the “Democratic People's Republic of Korea” is to Democracy

    To maintain the perception (illusion) that the EPO still cares about patent quality — and in order to disseminate this lie to EPO staff — a puff piece with the above heading/photograph was distributed to thousands of examiners in glossy paper form



  16. Short: This Spring's Message From the EPO's President (Corrected)

    A corrected preface from the Liar in Chief, the EPO's notoriously crooked and dishonest President



  17. Short: Highly Misleading and Unscientific Graphics From the EPO for an Illusion of Growth

    A look at the brainwash that EPO management is distributing to staff and what's wrong with it



  18. Short: EPO Explains to Examiners Why They Should and Apparently Can Grant Software Patents (in Spite of EPC)

    Whether it calls it "CII" or "ICT" or "Industry 4.0" or "4IR", the EPO's management continues to grant software patents and attempts to justify this to itself (and to staff)



  19. Links 21/4/2018: Linux 4.9.95, FFmpeg 4.0, OpenBSD Foundation 2018 Fundraising Campaign

    Links for the day



  20. As USPTO Director, Andrei Iancu Gives Three Months for Public Comments on 35 U.S.C. § 101 (Software Patenting Impacted)

    Weeks after starting his job as head of the US patent office, to our regret but not to our surprise, Iancu asks whether to limit examiners' ability to reject abstract patent applications citing 35 U.S.C. § 101 (relates to Alice and Mayo)



  21. In Keith Raniere v Microsoft Both Sides Are Evil But for Different Reasons

    Billing for patent lawyers reveals an abusive strategy from Microsoft, which responded to abusive patent litigation (something which Microsoft too has done for well over a decade)



  22. Links 20/4/2018: Atom 1.26, MySQL 8.0

    Links for the day



  23. Links 19/4/2018: Mesa 17.3.9 and 18.0.1, Trisquel 8.0 LTS Flidas, Elections for openSUSE Board

    Links for the day



  24. The Patent Microcosm, Patent Trolls and Their Pressure Groups Incite a USPTO Director Against the Patent Trial and Appeal Board (PTAB) and Section 101/Alice

    As one might expect, the patent extremists continue their witch-hunt and constant manipulation of USPTO officials, whom they hope to compel to become patent extremists themselves (otherwise those officials are defamed, typically until they're fired or decide to resign)



  25. Microsoft's Lobbying for FRAND Pays Off as Microsoft-Connected Patent Troll Conversant (Formerly MOSAID) Goes After Android OEMs in Europe

    The FRAND (or SEP) lobby seems to have caused a lot of monopolistic patent lawsuits; this mostly affects Linux-powered platforms such as Android, Tizen and webOS and there are new legal actions from Microsoft-connected patent trolls



  26. To Understand Why People Say That Lawyers are Liars Look No Further Than Misleading Promotion of Software Patents

    Some of the latest misleading claims from the patent microcosm, which is only interested in lots and lots of patents (its bread and butter is monopolies after all) irrespective of their merit, quality, and desirability



  27. When News About the EPO is Dominated by Sponsored 'Reports' and Press Releases Because Publishers Are Afraid of (or Bribed by) the EPO

    The lack of curiosity and genuine journalism in Europe may mean that serious abuses (if not corruption) will go unreported



  28. The Boards of Appeal at the European Patent Organisation (EPO) Complain That They Are Understaffed, Not Just Lacking the Independence They Depend on

    The Boards of Appeal have released a report and once again they openly complain that they're unable to do their job properly, i.e. patent quality cannot be assured



  29. Links 18/4/2018: New Fedora 27 ISOs, Nextcloud Wins German Government Contract

    Links for the day



  30. Guest Post: Responding to Your Recent Posting “The European Patent Office Will Never Hold Its Destroyers Accountable”

    In France, where Battistelli does not enjoy diplomatic immunity, he can be held accountable like his "padrone" recently was


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