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 17/8/2019: Unigine 2.9 and Git 2.23

    Links for the day



  2. Computer-Generated Patent Applications Show That Patents and Innovations Are Very Different Things

    The 'cheapening' of the concept of 'inventor' (or 'invention') undermines the whole foundation/basis of the patent system and deep inside patent law firms know it



  3. Concerns About IBM's Commitment to OpenSource.com After the Fall of Linux.com and Linux Journal

    The Web site OpenSource.com is over two decades old; in its current form it's about a decade old and it contains plenty of good articles, but will IBM think so too and, if so, will investment in the site carry on?



  4. Electronic Frontier Foundation Makes a Mistake by Giving Award to Microsoft Surveillance Person

    At age 30 (almost) the Electronic Frontier Foundation still campaigns for privacy; so why does it grant awards to enemies of privacy?



  5. Caturdays and Sundays at Techrights Will Get Busier

    Our plan to spend the weekends writing more articles about Software Freedom; it seems like a high-priority issue



  6. Why Techrights Doesn't Do Social Control Media

    Being managed and censored by platform owners (sometimes their shareholders) isn’t an alluring proposition when a site challenges conformist norms and the status quo; Techrights belongs in a platform of its own



  7. Patent Prosecution Highways and Examination Highways Are Dooming the EPO

    Speed is not a measure of quality; but today's EPO is just trying to get as much money as possible, as fast as possible (before the whole thing implodes)



  8. Software Patents Won't Come Back Just Because They're (Re)Framed/Branded as "HEY HI" (AI)

    The pattern we've been observing in recent years is, patent applicants and law firms simply rewrite applications to make these seem patent-eligible on the surface (owing to deliberate deception) and patent offices facilitate these loopholes in order to fake 'growth'



  9. IP Kat Pays the Price for Being a Megaphone of Team UPC

    The typical or the usual suspects speak out about the so-called 'prospects' (with delusions of inevitability) of the Unified Patent Court Agreement, neglecting to account for their own longterm credibility



  10. Links 17/8/2019: Wine 4.14 is Out, Debian Celebrates 26 years

    Links for the day



  11. Nothing Says 'New' Microsoft Like Microsoft Component Firmware Update (More Hardware Lock-in)

    Vicious old Microsoft is still trying to make life very hard for GNU/Linux, especially in the OEM channel/s, but we're somehow supposed to think that "Microsoft loves Linux"



  12. Bill Gates and His Special Relationship With Jeffrey Epstein Still Stirring Speculations

    Love of the "children" has long been a controversial subject for Microsoft; can Bill Gates and his connections to Jeffrey Epstein unearth some unsavoury secrets?



  13. Links 16/8/2019: Kdevops and QEMU 4.1

    Links for the day



  14. The EPO's War on the Convention on the Grant of European Patents 2000 (EPC 2000), Not Just Brexit, Kills the Unitary Patent (UP/UPC) and Dooms Justice

    Team UPC continues to ignore the utter failures that have led to lawlessness at the EPO, attributing the demise of the Unified Patent Court (UPC) to Brexit alone and pretending that it's not even a problem



  15. Links 15/8/2019: GNOME's Birthday, LLVM 9.0 RC2

    Links for the day



  16. 'Foundation' Hype Spreads in China

    Nonprofits seem to have become more of a business loophole than a charitable endeavour; the problem is, this erodes confidence in legitimate Free software and good causes



  17. Links Are Not Endorsements

    If the only alternative is to say nothing and link to nothing, then we have a problem; a lot of people still assume that because someone links to something it therefore implies agreement and consent



  18. The Myth of 'Professionalism'

    Perception of professionalism, a vehicle or a motivation for making Linux more 'corporate-friendly' (i.e. owned by corporations), is a growing threat to Software Freedom inside Linux, as well as freedom of speech and many other things



  19. Links 14/8/2019: Best Chromebooks, EPEL 8.0, LibreOffice 6.2.6

    Links for the day



  20. Being in Favour of Free/Libre Open Source Software Means Rejecting Software Patents

    Those who believe in Software Freedom cannot at the same time believe that software patents are desirable; we've sadly come to a point where many companies that dominate so-called 'Open Source' groups actively lobby for such patents, in effect betraying the community they claim to be a part of



  21. Links 14/8/2019: Apache Evaluated, HardenedBSD Has New Release

    Links for the day



  22. Planet Python is Being Overrun by Microsoft, Just Like PyCon and Python in General

    Microsoft is perturbing the Free/Open Source software (FOSS) world from the inside, promoting Microsoft's most malicious proprietary software from within that world while taking positions of power in powerful FOSS projects



  23. Coming Soon: The Innards of the Eric Lundgren Case That Microsoft is Desperate to Hide or Spin (by Defaming Lundgren)

    Microsoft is rather stressed about Eric Lundgren coming out of prison and telling how Microsoft put him there; right now Microsoft is mostly name-calling while seeking to control public dialogues



  24. Wrong Person in Charge of the Linux Foundation (and in Charge of Linus Torvalds)

    There are several glaring issues when it comes to the leadership of Linux's steward; for one thing, it lacks actual background in... Linux



  25. 2019 Tech Glossary

    This clavis refers to what the de facto definition may be, based on how (and when) media uses the words nowadays



  26. The Silence of the Media Lamb

    There are reasons that are perfectly legitimate to criticise media which is unable and more so unwilling to cover particular scandals for fear that coverage can be detrimental to the media's owners and sponsors



  27. LINUX.COM Managed by Apple’s MacOS Users, Open Source Managed and Covered by People Who Reject Open Source

    The narratives are being hijacked; people who we're supposed to assume speak for Linux and for Open Source support neither of these things; they're only in it for the money



  28. The Linux Foundation's Open Source Summit is a Proprietary Software Marketing Venue

    The distortion of the term Open Source and promotion of proprietary software such as GitHub shows that the foundation called after “Linux” is actually more of a front group of hostile corporations — large brands and rich people to whom Open Source represents a threat that needs to be controlled



  29. Links 13/8/2019: Mir 1.4 Released, Qt PDF Discussed

    Links for the day



  30. Links 13/8/2019: KDevelop 5.4.1 and DragonFly 5.6.2 Released

    Links for the day


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

Recent Posts