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. The EFF Back to Tackling Software Patents, Not Just Patent Trolls

    Electronic Frontier Foundation lawyers start targeting large companies that exploit patents for intimidation and extortion, not just patent trolling



  2. Microsoft Wants to Devour the Competition (Linux), Devour People's Data

    Refuting the "new Microsoft" propaganda and some ludicrous concept that Microsoft is now "playing nice"



  3. Benoît Battistelli Thinks 'President' is Above the Law, Decides to Ignore the Court's Ruling

    Staff of the EPO is given yet more reasons to protest tomorrow at the British Consulate, for the so-called 'President' of the EPO reminds everyone of the very raison d'être for the protest -- a vain disregard for the rule of law



  4. Links 24/2/2015: Xfce 4.12 a Week Away, GNOME 3.16 Previewed

    Links for the day



  5. Links 23/2/2015: Ubuntu Kylin 14.04.2 LTS, Cinnamon 2.6 Previews

    Links for the day



  6. IRC Proceedings: February 8th - February 21st, 2015





  7. The EPO's Sham 'Internal Investigation' of EPO Vice-President Željko Topić's Affairs

    The EPO never investigated the Željko Topić affair, it only pretends to have investigated (one small aspect, i.e. cherry-picking) using a Benoît Battistelli-controlled group



  8. Links 21/2/2015: GNOME 3.15.90, Google Wins Android Lawsuit

    Links for the day



  9. Microsoft AstroTurfing War on GNU/Linux is Still Going On, But Hidden Better, Uses API as Instrument of Lock-in

    The corruptible press continues to describe blatant attacks (Embrace, Extend, Extinguish) against GNU/Linux and Free software as Microsoft 'embracing' Open Source



  10. Lenovo's Superfish Scandal is Spyware on Top of Spyware (Microsoft Windows), the Problem is Inherently Proprietary Software

    Shifting focus to the root problem, which is neither Lenovo nor its laptops but the non-free programs installed on hardware



  11. Benoît Battistelli Once Again Threatens EPO Staff That 'Dares' to Protest, Battistelli Exploits Terror Attacks to Pretend to Respect Free Speech

    The European Patent Office (EPO) President, Benoît Battistelli, reportedly started threatening -- as before -- staff that decides to exercise the right to assemble and protest against abuses, including the abuses of President Battistelli himself



  12. Links 20/2/2015: Android Studio v1.1, GDB 7.9

    Links for the day



  13. Links 20/2/2015: Bloomberg Joins Linux Foundation, ClearOS Community 6.6.0

    Links for the day



  14. The Chartered Institute of Patent Attorneys Slams the European Patent Office for Structural Failings

    An important letter which we overlooked while writing yesterday's 4 articles about the European Patent Office (EPO); yet another key stakeholder complains



  15. Links 19/2/2015: Hewlett-Packard on Cumulus Linux, Previews of GNOME 3.16 Beta

    Links for the day



  16. Techrights Under Attack Again, Shortly After Important EPO Articles

    Techrights highlights a pattern that is months old; Site faces availability issues shortly after reports about the European Patent Office and its abuses



  17. EPO Staff Protests Against Benoît Battistelli’s Lowering of Patents Quality (Scope Expansion and Software Patents for Profit)

    A protest in Munich in less than 6 days will target Mr. Sean Dennehey, who has helped Battistelli cover up his abuses and crush legitimate critics, whom he deemed illegal opposition as if the EPO is an authoritarian regime as opposed to a public service which taxpayers are reluctantly (but forcibly) funding



  18. Breaking: European Patent Office Sued by Its Own Staff in The Hague, Must Unblock Staff's Voices

    The crooked management of the European Patent Office (EPO) gets in legal trouble after repeated attempts to cover up abuses and suppress criticism



  19. Željko Topić's History in SIPO Leaves a Legacy of Alleged DZIV Vehicles (Bribes), Authorship Abuses, and Intimidation Against Reporters

    Another deep look at Željko Topić's background in Croatia, preceding his very notorious appointment to the EPO where he now serves as Benoît Battistelli's most controversial attack dog



  20. The Old Obsession With Patent Trolls Continues to Distract From Debate About Software Patenting

    A roundup of recent coverage about monopolies on algorithms in the United States



  21. Links 19/2/2015: 64-bit ARM Linux, Chinese New Year

    Links for the day



  22. Links 18/2/2015: Linux Report, FlightGear 3.4

    Links for the day



  23. EPO Scandals: The Story So Far

    An overview of articles about mischief, misconduct and breach of laws at the EPO



  24. Links 17/2/2015: TripleO, Pivotal

    Links for the day



  25. Links 17/2/2015: SystemD 219, Frugalware 2.0 (Rigel) Released

    Links for the day



  26. Željko Peratović Slammed for Whitewashing Željko Topić After Publishing Important Piece on Behalf of Key Sources

    Response from Ivan Kabalin to Zeljko Peratovic's so-called "apology" which is both mysterious and seemingly inadequate as it does nothing to actually explain what was wrong (if anything)



  27. Benoît Battistelli Has Made Oversight of European Patent Office Absolutely Impossible





  28. Microsoft Already Killed Nokia, Don't Let It Kill Android Players Too

    Microsoft's strategy against Android mirrors the company's evil strategy that derailed MeeGo and Nokia



  29. Intel Continues to Attack Software Freedom Through UEFI

    The Trojan horse that Microsoft uses to cement its monopoly on desktops and laptops (making it hard or impossible to install and run GNU/Linux) is also being misused to block Coreboot



  30. Links 16/2/2015: Netrunner 15, Bridge Linux

    Links for the day


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