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 31/10/2014: Rubin Leaves Google, Neelie Kroes Ends EU Career

    Links for the day



  2. The EPO Is More Corrupt Under Battistelli Than Under Alison Brimelow: Part VIII

    After Brimelow, with all her flaws and her scandals, an even worse President is installed who then abolishes oversight and seemingly brings his old friends to the EPO, creating a sort of subculture that is impenetrable to outsiders



  3. Claiming That Microsoft 'Loves' Linux While Windows Update Bricks Devices With Linux

    The sheer absurdity of claims that Microsoft -- which not only attacks those who distribute Linux and GNU but also blackmails them, takes them to court, or bricks their products without any liability -- 'loves' Linux



  4. Protectionist Reign: Corporations in Complete Control of Everything With Domination Over Patent Law

    How multinational corporations, joined by the corporate press that they are funding, promote a corporations- but not people-friendly patent policy in north America



  5. Links 30/10/2014: GNOME 3.15.1, Red Hat Software Collections 1.2

    Links for the day



  6. Links 29/10/2014: Ubuntu Touch Tablet, Puppy Linux 6.0

    Links for the day



  7. Links 28/10/2014: SUSE Linux Enterprise 12, Canonical OpenStack Distro

    Links for the day



  8. Links 28/10/2014: PiFxOS, The Document Foundation in OSBA

    Links for the day



  9. Microsoft is Bricking Devices With Linux (Yet Again!), So a Microsoft Booster Spins/Paints Linux Devices as 'Fakes'

    Microsoft delivers rogue drivers through Windows Update and they brick Arduino microcontrollers



  10. How Bill Gates Continues to Pass Wealth From the Public to His Own Bank Account

    Having put a universal tax on many things (not just computers) and evaded tax using the classic 'charity' trick, Gates is now buying the media, the schools, politicians etc. and earns as much as 10 billion dollars per year while the public is taught that Gates is a giver, not a hoarder of the worst kind



  11. Links 27/10/2014: Lenovo Unbundling, Linux 3.18 RC2

    Links for the day



  12. IRC Proceedings: September 14th, 2014 – October 25th, 2014

    Many IRC logs



  13. Links 25/10/2014: KDE Mockups, Update on GNOME Outreach Program for Women

    Links for the day



  14. After Infecting Unity -- Successfully -- Microsoft's Partner Xamarin Wants to Infect Unreal Engine With .NET

    Xamarin continues to spread dependence on Microsoft to more gaming frameworks, not just platforms such as GNU/Linux, Android, and even permanent-state devices



  15. Taking Microsoft Windows Off the Grid for Damage to Businesses, the Internet, and Banking Systems

    Microsoft's insecure-by-design software is causing massive damages ([cref 27802 possibly trillions] of [cref 13992 dollars in damages to date]) and yet the corporate press does not ask the right questions, let alone suggest a ban on Microsoft software



  16. City of Berlin Does Not Abandon Free Software, It's Only Tax Authorities

    A Softpedia report that says the City of Berlin is moving to Microsoft Office is flawed and may be based on a poor translation



  17. Nadella a Liar in Chief at Microsoft, Pretending That His Anti-Competitive Practices Are Unfortunately Imposed on Microsoft

    The nastiness of Microsoft knows no bounds as even its assault on GNU/Linux and dirty tricks against Free software adoption are characterised as the fault of 'pirates'



  18. Reuters Writes About the Demise of Software Patents, But Focuses on 'Trolls' and Quotes Lawyers

    How the corporate media chooses to cover the invalidity of many software patents and the effect of that



  19. Links 24/10/2014: Microsoft Tax Axed in Italy, Google's Linux (ChromeOS/Android) Leader Promoted

    Links for the day



  20. Links 24/10/2014: GNU/Linux History, Fedora Delay

    Links for the day



  21. Links 23/10/2014: New *buntu, Benchmarks

    Links for the day



  22. Links 22/10/2014: Chromebooks Surge, NSA Android Endorsement

    Links for the day



  23. Links 21/10/2014: Debian Fork Debate, New GNU IceCat

    Links for the day



  24. Criminal Microsoft is Censoring the Web and Breaks Laws to Do So; the Web Should Censor (Remove) Microsoft

    Microsoft is still breaking the Internet using completely bogus takedown requests (an abuse of DMCA) and why Microsoft Windows, which contains weaponised back doors (shared with the NSA), should be banned from the Internet, not just from the Web



  25. Microsoft 'Loving' GNU/Linux and Other Corporate Media Fiction

    Microsoft has bullied or cleverly bribed enough technology-centric media sites to have them characterise Microsoft as a friend of Free/Open Source software (FOSS) that also "loves Linux"



  26. India May be Taking Bill Gates to Court for Misusing His So-called 'Charity' to Conduct Clinical Trials Without Consent on Behalf of Companies He Invests in

    Bill Gates may finally be pulled into the courtroom again, having been identified for large-scale abuses that he commits in the name of profit (not "charity")



  27. The Problems With Legal Workarounds, Patent Scope, and Expansion of Patent Trolls to the East

    Patent trolls are in the news again and it's rather important, albeit for various different reasons, more relevant than the ones covered here in the past



  28. Links 20/10/2014: Cloudera and Red Hat, Debian 7.7, and Vivid Vervet

    Links for the day



  29. Links 20/10/2014: 10 Years Since First Ubuntu Release

    Links for the day



  30. How Patent Lawyers Analyze Alice v. CLS Bank

    Breaking down a patent lawyer's analysis of a Supreme Court's decision that seemingly invalidated hundreds of thousands of software patents


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