01.14.09

Gemini version available ♊︎

Microsoft Chief: “Under NO Circumstances Lose Against Linux”

Posted in Antitrust, Bill Gates, Finance, GNU/Linux, Microsoft, Steve Ballmer, Windows at 11:35 am by Dr. Roy Schestowitz

Maze
Using money to starve and entrap competitors

IN THIS SERIES of posts we have already covered relevant antitrust material such as

Today we look at Exhibit px08562 [PDF] from Comes vs Microsoft. It’s about EDGI and it covers schools in developing countries. The exhibit comprises bits of internal correspondence at Microsoft and it involves high-level figures such as Steve Ballmer, Jeff Raikes, Jim Allchin, Chris Jones and one of the main men behind this anti-GNU/Linux push, Orlando Ayala.

he exhibit opens with the revelation that Steve Ballmer is (“steveb” in the E-mails) opposed to limits on dumping against GNU/Linux. To quote:

We went in to the BPR with $30MM in mind, but steveb said we shouldn’t cap it, since it’s “net accretive” to the P&L, ie if the field handles it correctly, it’s revenue that we wouldn’t have seen otherwise (ie if we lost to Linux), so even if we make only a few bucks per PC, it’s better than zero, plus we have the oppty to sell addl non-bootable sw into the customer.

Later we find Geri Elliott, who is a Microsoft employee with a hat in government — one that was (mis)used to cross out Free software from education.

Even before EDGI is formalised, says Microsoft’s Orlando Ayala:

Effective immediately, we are significantly enhancing empowerment by the GM to provide services and, where necessary, even dollars back to the customer to offset the cost of buying new OEM PC’s with *legal* Windows preinstalled instead of naked PC’s with Linux and/or other low-cost/no-cost software.

Offering “dollars back to the customer” is this case is what some people would label a bribe. It’s about suffocating the competition, never allowing it to exist or grow. This is done through negative pricing on the face of it (it pays off to Microsoft in the long term).

The “example scenario” Microsoft mentions:

The government of “X” is advocating using open source for all government-funded computers in order to keep “X” dollars inside the country and save the taxpayers millions of dollars. They are therefore looking at rolling out 50,000 PC’s with Linux to all their K-12 schools and run StarOffice for free or a locally-produced package that they can purchase for $5/desktop.

The planned solution:

In order to compete more effectively against Linux and other providers on these deals, we can now leverage the Education and Government Incentive [EDGI] program to help tip the scales to MS in the deal. After engaging the regional team. the region may use funds to provide services and/or rebates to the customer with the following limitation:
Not to exceed the estimated Windows royalties recognized by MS from the OEM selling the PC’s to the customer (in the example, 50,000 PC’s at approx. $100/PC for OEM Windows XP Professional would result in a maximum of $5M for the individual deal).

Initially (2002), this is targeted at:

LATAM, Africa, Middle East, South Asia including India and PRC.

It is important to emphasise that this is not the case of Microsoft adjusting its prices to compete more effectively. It’s a proper dumping (predatory pricing) tactic that specifically targets any gain made by the competition and this is done by a corporation convicted of monopoly abuse*. In bold font face it states:

It is essential, therefore, that we use this in only in deals we would lose otherwise.

General Magagers are referred to CompHot again:

Escalate to the “comphot’” alias…

CompHot, according to Microsoft, targets "Linux infestations". CompHot is a cryptic code word that would be too alien to outsiders. We mentioned it yesterday as well.

David Driftmier is responsible for EdSG, which conducts many of these anti-GNU/Linux operations, but the idea comes from higher above, notably Orlando Ayala, Bill Gates, and Steve Ballmer, based on other related correspondence. Pat Fox is in this loop as well.

Here is the punch lines from Orlando Ayala:

Bottom line do our best to show the great value of our software to these customers and ensure we get opaid for it under NO circumstances lose against Linux before ensuring we have used this program actively and in a smart way.

Yes, Microsoft is not worried about “Linux”. Not at all.

“[If I ask you who is Microsoft's biggest competitor now, who would it be?] Open…Linux. I don’t want to say open source. Linux, certainly have to go with that.”

Steve Ballmer (Microsoft’s CEO), February 28th, 2008


Appendix: Comes vs. Microsoft – exhibit px08562, as text


From: Pat Fox
Sent: Wednesday, July 24, 2002 9:01 AM
To: Dan Fowler (MSLI)
Subject: RE: *Microsoft Confidential” : Education and Government Incentives program

We went in to the BPR with $30MM in mind, but steveb said we shouldn’t cap it, since it’s “net accretive” to the P&L, ie if the field handles it correctly, it’s revenue that we wouldn’t have seen otherwise (ie if we lost to Linux), so even if we make only a few bucks per PC, it’s better than zero, plus we have the oppty to sell addl non-bootable sw into the customer.

Pat

—- Original Message —

From: Dan Fowler (MSLI)
Sent: Wednesday, July 24, 2002 8:58 AM
To: Pat Fox
Subject: RE: *Microsoft Confidential* : Education and Government Incentives program

Do you know much money was budgeted for this?

—– Original Message —-
From: Pat Fox [mailto:patfox@Exchange.Microsoft.com]
Sent: Tuesday, July 23, 2002 12:00 PM
To: Dan Fowler (MSLI)
Cc: Tom Baumbach (MSLI)
Subject: FW: *Microsoft Confidential* : Education and Government Incentives program
Importance: High

Thanks for making the time this morning. Here’s some background on EDGI.

PIs let me know if you have any questions.

Thx,
Pat

—- Original Message —-
From: Orlando Ayala
Sent: Tuesday, July 16, 2002 8:17 AM
To: SMSG Leadership Team; Pat Fox; Kurt Kolb; Sherri Bealkowski; Rogers Weed; Asia Pacific General Managers; EMEA General Managers; icon general managers; Geri Elliott; Linda Testa (LCA); Pamela Passman (LCA); Peter Wise
Cc: Steve Ballmer; David Driftmier; Rafael Perez-Colon; Mark East; Jeff Raikes; Jim Allchin; Chris Jones (WINDOWS)
Subject: *Microsoft Confidential* ’: Education and Government Incentives program
Importance: High

As many of you know, the Education Solutions Group [EdSG], and the Windows Client group team have been leading a cross-group effort involving LCA, OEM, WW Licensing and Pricing, and SMSG.

MS-CC-MDL, 000000651421

HIGHLY CONFIDENTIAL


The goal of this project is to provide a mechanism for emerging markets to build a rich, active, legal ecosystem around PC computing, and at the same time, make computers with Microsoft Windows preinstalled more affordable, especially in the education segment.

We recognize the critical importance of helping emerging markets build healthy and legal PC ecosystems and clearly the answer is having Windows be a core component. But in today’s difficult economic environment, it is clear that some institutions and countries are making decisions based on short-term price, rather than long-term cost and benefits of their IT investments. It is clear that Windows offers far more benefits to an emerging economy and to the immediate use of customers, we have to do more in emerging markets to help foster a Windows ecosystem.

Until all the details of the program have been developed, it is important that we have a way to address large PC purchases that involve low-cost/no-cost competitors in the education (and government} sectors, especially in emerging markets. Effective immediately, we are significantly enhancing empowerment by the GM to provide services and, where necessary, even dollars back to the customer to offset the cost of buying new OEM PC’s with *legal* Windows preinstalled instead of naked PC’s with Linux and/or other low-cost/no-cost software.

Example scenario:

The government of “X” is advocating using open source for all government-funded computers in order to keep “X” dollars inside the country and save the taxpayers millions of dollars. They are therefore looking at rolling out 50,000 PC’s with Linux to all their K-12 schools and run StarOffice for free or a locally-produced package that they can purchase for $5/desktop.

After extensive selling by the local MS account team, including the country GM, to convince them of the higher value, lower TCO, and overall advantages of the Windows-based eco-system in their country, the government still maintains that while there might be some premium attached to our software, it’s not enough to justify the investment and they will stick with their plan to go open source across all schools.

In order to compete more effectively against Linux and other providers on these deals, we can now leverage the Education and Government Incentive [EDGI] program to help tip the scales to MS in the deal. After engaging the regional team. the region may use funds to provide services and/or rebates to the customer with the following limitation:
Not to exceed the estimated Windows royalties recognized by MS from the OEM selling the PC’s to the customer (in the example, 50,000 PC’s at approx. $100/PC for OEM Windows XP Professional would result in a maximum of $5M for the individual deal).

An outline of the sales process is included in the attached program document.

While this program is available for both developed and developing countries, initial focus is being given to those areas where economic conditions often dictate low-cost/no-cost software as the only solution. This would include LATAM, Africa, Middle East, South Asia including India and PRC.

2/21/2003

MS-CC-MDL 000000651422
HIGHLY CONFIDENTIAL


Ideally, this will still result in a net positive on the Executive P&L as the OEM revenues would not have been realized if the deals had been lost. It is essential, therefore, that
we use this in only in deals we would lose otherwise
. Initially, we will track each deal, then reevaluate in aggregate at the end of Q1 and again at MYR to validate effectiveness.

IF an opportunity meets the criteria in the attached sales process and normal sales process has not been sufficient to close the deal then the GM should ensure that the following takes place:

1] Engage regional team in sales opportunity
2) Escalate to the “comphot’” alias for review by the competitive team, EdSG, and the Windows Client group.
3) EdSG wiil work with Windows Client Group and SMSG WW controller to ensure that funds are tracked and managed appropriately
4) Until appropriate OEM tracking systems are in place, it may be necessary for local account teams to validate appropriate Windows purchases by OEMs in order to ensure funds invested in customer do not exceed funds actually realized through the channel.

Action required:

1) RVP’s should ensure local response teams are designated as per the attached sales process. It is critical that we are really present and actively working in this accounts way before it is too late. We don’t want to be surprised by being “’out of the game:””
2) RVP’s should establish an approval process or empowerment guideline for their region
3) GM’s to communicate program to appropriate sales teams in the subs
4) GM’s to ensure regional response teams are engaged on any EDGI opportunities once teams are formed
5) EdSG (daviddri) to track and communicate EDGI account pipeline, work with Windows Client Group (patfox) to validate requests, and report back to results to RVP’s.
6) Bottom line do our best to show the great value of our software to these customers and ensure we get opaid for it under NO circumstances lose against Linux before ensuring we have used this program actively and in a smart way. We believe for those customers to stay with Windows is in their best long term interest to protect and expand the great value in their investment and also for our long term relationship with this critical segments in your markets. Use this actively as an opportunity to also build great relationships and recognition for our honest desire to partner with them because that is the true intention of the program.

As detailed processes are implemented, new, detailed guidance will be published. There will also be additional guidance provided at MGB. Questions may be sent to edgihq. As always, thanks for your efforts in continuing the fight to help countries realize their potential through truly great software!

2/21/2003

MS-CC-MDL 000000651423
HIGHLY CONFIDENTIAL


* The “convicted monopolist” part might be misunderstood. Microsoft was officially declared a monopoly, which isn’t illegal. They were convicted of abusing their monopoly status by using the very tactics described in this document.

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

DecorWhat Else is New


  1. [Meme] Tech Companies: No Friends of Women

    Just another reminder that companies like IBM do not actually care about women; they are misusing genuine feminism for corporate objectives



  2. Links 27/9/2021: OpenSSH 8.8, Martine OS 2.0 and Airyx 0.2.2 Reviewed

    Links for the day



  3. GNU Turns 38 (Midday Today or 12:35:59 EST) and RMS Talks to Polish Medical Professionals This Evening

    Today GNU turns 38. Last week over 5,000 people watched the RMS talk in Ukraine using our WebM version of it; in a few hours RMS will speak in Poland and we’ll try to find a stream if one becomes available (we shall update this page).



  4. IRC Proceedings: Sunday, September 26, 2021

    IRC logs for Sunday, September 26, 2021



  5. Links 27/9/2021: Librem 14 Reviewed, Linux 5.15 RC3 is Out

    Links for the day



  6. Links 26/9/2021: GNU Wget2 2.0.0 and MenuLibre 2.2.3 Released

    Links for the day



  7. How Basic Laws and Fundamental Rights Got Crushed in the European Patent Office

    Our next series will show the sheer hypocrisy of the EPO, hiding behind the veil of (patent) law while so shamelessly violating just about every law in the books without facing any form of accountability



  8. Regrettable Acts of Self-Harm: OpenMandriva and Mozilla Being Outsourced to Microsoft Proprietary Software and Monopoly

    In another blow to software freedom, OpenMandriva and Mozilla decide to abandon their own systems and use proprietary software from Microsoft instead



  9. Links 26/9/2021: Mozilla Spends on PR, OpenMandriva Outsourcing to Microsoft

    Links for the day



  10. IRC Proceedings: Saturday, September 25, 2021

    IRC logs for Saturday, September 25, 2021



  11. Links 25/9/2021: GNU/Linux Recognition in Mainstream Media and Wine-Staging 6.18

    Links for the day



  12. Reminder: GNU Turns 38 This Monday Around Midday (When GNU's Founder Gives Talk in Poland)

    With media and Torvalds speaking again about anniversaries (this has gone on for the past week because Torvalds wrote about it yet again), it is important to recall the announcement that got the ball rolling and basically started it all (the GNU/Linux operating system) because it was in 1983, not 1991. We reproduce in full the announcement.



  13. Links 25/9/2021: Wine 6.18 and Chromium Complier Woes

    Links for the day



  14. [Meme] When the EPO Watches Everything ('Dissidents', Media, Etc.) and Isn't Being Watched by Anybody

    The EPO is taking Europe for a wild ride; Everything is a vehicle for the very same agenda, with nobody left to hold it accountable or ask any tough questions… (even the media is in the EPO’s back pocket or back seat)



  15. Virtual Oversight

    “eMeetings” that simulate an impression of oversight are like ‘ViCo’ to simulate access to justice; will that ever change and will oversight be restored at EPOnia, Europe’s second-largest institution?



  16. The Corporate Coup Against the Soul of the Free Software Community Is Not Over

    The erosion of community role in the development of GNU/Linux is a growing problem; part of the problem is that large corporations target technical and philosophical (perceived) leaders in coordinated smear campaigns, led by media they own



  17. IRC Proceedings: Friday, September 24, 2021

    IRC logs for Friday, September 24, 2021



  18. Links 24/9/2021: GNU Coreutils 9.0, BattlEye GNU/Linux Support

    Links for the day



  19. [Meme] 'Linux' Foundation is Greenwashing Microsoft Again, Misusing the Linux Brand Like Nobody's Business

    Microsoft has weaponised the Linux brand to dub a toxic company like itself (helping notoriously polluting companies and generating lots of waste, both directly and through planned obsolescence, inefficient software, DRM, etc.) as "green"



  20. Richard Stallman to Speak (in Person) in Poland, Dedicate the Talk to Medical Professionals

    Days after his talk in Ukraine Richard Stallman plans to do the same in Poland (just announced)



  21. Links 24/9/2021: 30 Years of Europe’s First Root Name Server, Repairability of Laptops Discussed

    Links for the day



  22. ZDNet Has Failed

    ZDNet is on the decline and its demise appears to have greatly accelerated in recent months; we take a quick look at this month's coverage and explain the conflict of interest (it's PR, not news, and it's far too shallow/blatant to simply overlook)



  23. [Meme] Some People Are Just Above the Law

    A lot of people are still flabbergasted or at least baffled/miffed to discover that some people are in effect above the law; not even Europol and Interpol can apprehend and hold them accountable; that needs to change. Had Benoît Battistelli worked for France Télécom S.A. (not the EPO), would he be arrested? What about António Campinos and his drunk son?



  24. NPR and PBS, Both Funded by Bill Gates, Try to Save Him

    Bill Gates continues to corrupt the media and corrupt social control media (such as Twitter) using his money



  25. The EPO Must Forsake Its Diplomatic Immunity and Quit Pretending It's About Patent Law (or Any Law)

    There's no sign of the EPO actually trying to obey the law and correct the mistakes of the past; to make matters worse, the existing administration adds yet more corruption to an already-massive pile while dismissing any form of oversight



  26. IRC Proceedings: Thursday, September 23, 2021

    IRC logs for Thursday, September 23, 2021



  27. Links 24/9/2021: Ubuntu 21.10 Beta, Istio 1.11.3, and More Milestones for Steam Deck

    Links for the day



  28. [Meme] President Campinos Addresses the Legacy of Battistelli's “Strike Regulations”

    A sequence of four EPO memes about those infamous and unlawful “strike regulations” that Benoît Battistelli and António Campinos have exploited to abuse thousands of workers



  29. [Meme] Bill Gates Keeps Digging Himself Deeper in the Grave Each Time He Speaks

    These sorts of ‘interviews’ with Gates’ own propaganda mills (he also pays Twitter now) aren’t going to improve his image; people aren’t infinitely gullible (Source)



  30. Linux Foundation and Other 'Diploma Mills' Say There's Demand for Their Products in Their New 'Research' (Marketing)

    The so-called ‘Linux’ Foundation (LF), together with edX, are basically marketing their services and products, but this is disguised as 'research' (a false narrative widely parroted by shallow and paid-for media partners of theirs), piggybacking brands like “Linux” and buzzwords like “Open Source” (even when they promote proprietary things, e.g. memorisation of proprietary GUIs)


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