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01.16.09

EDGI Finale: Microsoft’s “Linux Compete Squad”

Posted in America, Antitrust, Asia, Deception, FUD, GNU/Linux, Microsoft at 2:02 pm by Dr. Roy Schestowitz

EDGI slide

THIS IS likely to be the last post in this series which explores Microsoft’s initiative against GNU/Linux in government and education. Previous parts include:

Today we cover Comes vs Microsoft Exhibit px08592 (September 2002) [PDF]. It is included as text in the Appendix, but here are key observations.

Studies of GNU/Linux penetration in different countries are presented, based on some surveys. There are charts to show this, but the B&W (greyscale) scans make them impossible to read.

Then there are many talking points against Linux and other competitors. This includes FUD like:

Measurement (Linux + StarOffice) Result
Deployment Success 2/3 IT Pros Could Not Complete Installation
Deployment Time Avg. 57% More Time to Deploy than Windows
Document Compatibility 35.3% of Office Docs Opened in StarOffice Had Errors
Top 11 Office Tasks StarOffice Tasks Took 2.7 Times Longer

eTesting Labs, AIR

- Myth: Linux costs 2X-3X less than Windows

- Reality: Windows costs ~30% less per year

This firm, eTesting Labs, seems to be doing work for Microsoft.

We will soon show more exhibits where Microsoft negotiates with Gartner and/or IDC for the sponsored, slanted TCO study referred to in this exhibit. It was secretly linked to a desktop Windows price break deal. This would not be the last such case because in another court case Gartner is shown negotiating Vista coverage with Microsoft. IDC does the same sorts of things and it’s a typical routine which involves Microsoft.

IDG and Gartner are quoted in page 9 of this exhibit:

“Sun has not yet provided a compelling vision for how StarOffice will integrate into the Enterprise” – Giga

“Some of the concerns with Linux – such as staffing costs, a lack of in-house Linux expertise, and the difficulty of managing this operating system – will continue to be significant barriers to desktop adoption.”
-IDC

“For widespread desktop use, Linux faces hurdles. A new, albeit intuitive, user interface many be among the least of these …. Distribution, support, availability of peripherals and application readiness is a greater challenge. As with all uses of Linux, business customers need to look at vendor direction and support issues when considering Linux.” – Gartner

“[Linux] backers have faliled to produce the vital elements of a viable desktop operating environment: a good user interface and a suite of applications that users want and that create files compatible with the applications of most other users to whom they are connected” – IDC

Sooner or later we shall shed some more light on IDC and Gartner, both of which are corruptible and influenced by Microsoft. They occasionally attack Free software, unsurprisingly.

Additional market data was put into this presentation and “The Linux Desktop Playbook” has a reference to EDGI, which starts on page 10.

Pages 12-13 contain concrete field examples, EDGI “wins” with amounts of money committed/spent in Mexico, Malaysia, Egypt, and Tunisia; Jordan pending at the time.

India is obliquely referred to on page 14. “BRIC” stands for “Brazil-Russia-India-China”.

From the “Linux Desktop Playbook”:

Its important to engage with the proper BDMs on a business level discussion and not get caught up with technical folks in a religious discussion.

We saw lots of this in the OOXML fiasco. Microsoft did not want to talk about technical things, so it sent non-technical people.

Then they use IDC and Gartner as ammunition, along with EDGI:

A Linux costs less Just because the software license cost is free, doesn’t mean the cost of using Linux Is less than Windows When you consider both direct costs (additional deployment, management, support costs) and indirect costs (end user down time, loss of productivity, etc ) Linux costs more than Windows!

- Show customers existing TCO and business value data for Windows XP. There is a lot of data showing good ROI when moving from Win98 to Win XP. A Gartner audited TCO study completed in the City of Vassa, Finland (home country of Linux Torvalds) showed that moving to Windows XP/Office XP would save 31% per PC, per years compared to Red Hat and Open Office. If the customer still pushes back on costs, move to next step

-TCO challenge. The Windows Client PMG is offering to the field to fund 20 Gartner audited Linux desktop TCO studies in FY03 (5 per region. We will send in someone from MSC to perform a detailed cost analysis of Linux vs Windows XP using a Gartner approved TCO methodology. Since we will use the customer’s own data — there can be no arguing the results. Gartner will audit each study to approve the specific results from each company. If the customer still pushes back . .

- EDGI. This program is for Education and Government customers who face significant budget constraints. It is designed to allow relief to the customers when purchasing Windows. More details coming

This ‘bought’ study from Garner was conducted in the home of “Linux Torvalds”, according to Microsoft.

Another common fallacy/FUD then appears, regarding access to source code:

-Linux touts open source as a key advantage. The reality is that most customers would never work directly with the source code and compile the system themselves – that would be like taking on the role of system integrator or OS vendor themselves.

That’s a lie because one needs only to rely on other programmers or even forking with shared resources. Microsoft mentioned visibility of its code in special circumstance, but that totally misses the point.

Slide 11 mentions CompHot and EDGI again. According to Microsoft , CompHot is the emergency address to fight “Linux infestations”.

- Linux desktop virtual team
- CompHot escalations weekly review
  - EDGI request escalations
- Linux compete squad – billv
- International desktop OS tracker

“Linux compete squad,” it says…

Who is alias “billv”?

Here are details of what Microsoft did, as per slide 12. They target Linux migrations on just about anything, even points of sale and embedded.

Linux Desktop Field Escalations

36 Escalations, 18 Active, 14 De-escalated, 1 Loss, 3 Wins

- Linux and StarOffice – 5 Active, 1 Deescalated
   - Active Telstra, Bank of Ireland, First Community Bank, Indiana Web Academy, Standard Bank (South Africa)
- Linux OS – 3 Active, 2 De-escalated
   - Active. ABM Amro (Workstation), ETC (Columbian Telco) and SBC Communications
- Linux POS – 5 Active, 2 De-escalated
   - ChevronTexaco, Arrefour, Hollywood Video, CSK Auto, Waitrose Supermarkets
- Linux Embedded – 3 Active, 8 De-escalated, 1 Loss, 1 Win
   - Active: Accent/FireKing – security for Taco Bell and others – close to winning. Safeway – smart clients in shopping carts
   - Loss. VOPAK – Linux embedded on PC option – up to biz units to select
   - Win Royal Carribean Cruise Lines – IBM Linux on client and server
- EDGI – 1 Active, 2 Wins
   - Active. Jordan. Wins. Egypt, Tunisia
   - Mexico and Malaysia EDGI deals were not escalated via CompHot
- StarOffice on Windows – 1 Active
   - Dept of Homeland Security – 170,000 seats, McNealy involved
- OS/2 Migration to Linux – 1 De-escalated

So EDGI was used against Jordan, Egypt, Tunisia, Mexico and Malaysia.

The next slide gives a detailed breakdown:

Reactive EDGI Results To Date

- Mexico- $2.5MM ¢committed, adding $25MM to MS
   - Govt-financed PC purchase for home teacher use with Windows XP Home
   - 250K PCs from Acer, iBM, and HP
   - Govt was considering Linux and Win98 due to cost
   - EDGI distributed $10/PC to be used for teacher training
   - Additional purchase of $60/PC for Office, Encarta, and Encarta interactive
- Malaysia – $500K committed, waiting for govt decision
   - EDGI used as delivery mechanism for previous exec commitments
   - Funds used for rural schools, teacher training, non-bootable software
- Egypt – $355K committed, addl $500K to MS, $1 2M to MS over 2yrs
   - EDGI used as delivery mechanism for previous exec committees
   - Govt purchased 6250 PCs at full price, 4166 PCs w/ 100% Windows rebate
- Tunisia – $600K committed, addl $600K to MS
   - Wave 2 of govt-financed purchases of 15K home PCs. Wave 1 was Windows-only, but wave 2 offer includes Linux PCs for $60 per PC less to the end user
   - EDGI contributed $40/PC -$15 end user rebate. $20 sys builder joint mktg, and $5 end user mktg
- Jordan – Pending
   - Ministry of education purchase of 8K PCs, considering Linux
   - We are still working through operational logistics

According to this, they even use government funds to stick Windows into the homes of teachers. Later on we hear about students who complain about their non-Windows laptops. It’s inbred. Student are pushed into it whilst teachers impose it.


Appendix: Comes vs. Microsoft – exhibit px08592, as text


Linux Desktop Update and Brainstorm

Pat Fox
Alain Meeus
Manish Sharma
9/11/02

Plaintiff’s Exhibit

8592

Comes V. Microsoft

HS-CC-Sun 000001220079
HIGHLY CONFIDENTIAL


OS share of installed base

[See figure in original PDF]

- Windows XP has low perpetration in all countries — greatest in Sorgs
- Windows 2000 still not dominant in any segment in any country
   -France is making headway
- Very high 9x use in India. Korea, Russia (where NT4 was not localized), Mexico and Japan
- NT4 dominates amongst Lergs and Morgs in France and Germany

Q1/Q5 What operating systems are running on your organization’s desktop/portable computers?
9/10/02 Microsoft Confidential

- Note – NT4 was not localized in every market (China, Korea, Russia)

MS-CC-Sun 000001220080
HIGHLY CONFIDENTIAL


Intent to evaluate Linux

[See figure in original PDF]

-Sorg evaluation of WinXP generally trails M/Lorgs
-Poor ration (for Linux) of won’t deploy to will deploy
-Lorg
   - Low evaluation in Korea, India, US and Canada
   - High evaluation in Russia, China and Mexico
   - Poor ratios in UK, Mexico and Canada
-Morgs
   - Low evaluation in Korea, India, UK
   - High evaluation in Russia and US
   - Poor ratios in Germany and China
-Sorgs
   - Low evaluation in Korea
   - High evaluation in China dn Russia

Q56 Which of the following bets describes your company’s plans for Linux as a desktop operating system
9/10/02 Microsoft Confidential

MS-CC-Sun 000001220081
HIGHLY CONFIDENTIAL


Expect OS to change

[See figure in original PDF]

- Move io 2000 is equally or more popular than XP — Korea Is an exception

- Move to Linux of concem in lnslian Morgs- -20% of Morgs expecting to change plan to change to Linuc

- “Other’ ¢ategory is large in some places — these will be called out in country reports but mostly consist of earlier versions of Windows

Q15 Are you expecting some other OS to become your primary computer OS in the next 6-12 months?
Q16 Which operating system

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220082
HIGHLY CONFIDENTIAL


MGB Winning Messages!

Windows is a better platform

Windows is a better value

Windows enables greatest choice

9/10/02 Microsoft Confidentiall

MS-CC-Sun 000001220083
HIGHLY CONFIDENTIAL


Desktop: Better Platform

-Better user experience
  -Familiar and consistent interface
  -Office: Shorter task completion times
  -Office: Proven compatibility
  -Office: Full support for XML and web services

-More powerful
  -Integrated and comprehensive mobility, digital media, collaboration technologies

-Safer bet for the future
  -Well defined roadmap & constant investment
  -Single point of accountability

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220084
HIGHLY CONFIDENTIAL


Desktop: Better Value

Measurement (Linux + StarOffice) Result
Deployment Success 2/3 IT Pros Could Not Complete Installation
Deployment Time Avg. 57% More Time to Deploy than Windows
Document Compatibility 35.3% of Office Docs Opened in StarOffice Had Errors
Top 11 Office Tasks StarOffice Tasks Took 2.7 Times Longer

eTesting Labs, AIR

- Myth: Linux costs 2X-3X less than Windows

- Reality: Windows costs ~30% less per year

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220085
HIGHLY CONFIDENTIAL


Desktop: Greatest Choice

- Largest number of applications

  - >4000 apps tested by Microsoft w~th Windows XP
  - Many, many more available

- Largest number of devices

  - 12,000+ device drivers on the XP CD

  - 41,000 devices submitted to WHQL

- Broader availability of services

  - >450,000 MCSE professionals world-wide

- More training options

  - Wide range of Microsoft certified training courses
  - Many Microsofl certified training providers

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220086
HIGHLY CONFIDENTIAL


Desktop: What The Analysts Say

“Sun has not yet provided a compelling vision for how StarOffice will integrate into the Enterprise” – Giga

“Some of the concerns with Linux – such as staffing costs, a lack of in-house Linux expertise, and the difficulty of managing this operating system – will continue to be significant barriers to desktop adoption.”
-IDC

“For widespread desktop use, Linux faces hurdles. A new, albeit intuitive, user interface many be among the least of these …. Distribution, support, availability of peripherals and application readiness is a greater challenge. As with all uses of Linux, business customers need to look at vendor direction and support issues when considering Linux.” – Gartner

“[Linux] backers have faliled to produce the vital elements of a viable desktop operating environment: a good user interface and a suite of applications that users want and that create files compatible with the applications of most other users to whom they are connected” – IDC

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220087
HIGHLY CONFIDENTIAL


The Linux Desktop Playbook

1. Know the status of Linux in your accoutns
2. Sell Window’s strengths to BDMs
  - 3 desktop pillars
     > Better Platform
     > Better Value
     > Greater Choice
3.Sell solutions – better together with Office & Server
4. Debunk Linux myths
     > Linux costs less
      - TCO/Biz value data
      - Biz Value challenge
      - EDGI
     > Linux is “Good enough”
      - Compare w/GUI
      - TS client solution
     > Need Open source
      - MS shared source
5. Escalate!

9/10/02 Microsoft Confidential

This playbook outlines the progressive steps the field should take when selling against Linux on the desktop

1 Know the status of Linux your your accounts
   – Point out that each subsidiary should have a method to track Linux threats and that these should be reported back to Redmond.
2 Sell Windows strengths to BDMs
  - Its important to engage with the proper BDMs on a business level discussion and not get caught up with technical folks in a religious discussion.
  - See the hidden shale for more details on the 3 pillars or the Windows XP vs Linux positioning doc
3 Sell solutions – better together with Office and Server
   – We have a much more robust platform elevate the discussion beyond the OS if appropriate.
4 Debunk Linux myths
A Linux costs less Just because the software license cost is free, doesn’t mean the cost of using Linux Is less than Windows When you consider both direct costs (additional deployment, management, support costs) and indirect costs (end user down time, loss of productivity, etc ) Linux costs more than Windows!

- Show customers existing TCO and business value data for Windows XP. There is a lot of data showing good ROI when moving from Win98 to Win XP. A Gartner audited TCO study completed in the City of Vassa, Finland (home country of Linux Torvalds) showed that moving to Windows XP/Office XP would save 31% per PC, per years compared to Red Hat and Open Office. If the customer still pushes back on costs, move to next step

-TCO challenge. The Windows Client PMG is offering to the field to fund 20 Gartner audited Linux desktop TCO studies in FY03 (5 per region. We will send in someone from MSC to perform a detailed cost analysis of Linux vs Windows XP using a Gartner approved TCO methodology. Since we will use the customer’s own data — there can be no arguing the results. Gartner will audit each study to approve the specific results from each company. If the customer still pushes back . .

- EDGI. This program is for Education and Government customers who face significant budget constraints. It is designed to allow relief to the customers when purchasing Windows. More details coming

B Customer needs Open Source

-Linux touts open source as a key advantage. The reality is that most customers would never work directly with the source code and compile the system themselves – that would be like taking on the role of system integrator or OS vendor themselves. Microsoft has a variety of shared source programs for enterprise academic and government customers and system integrators. These programs allow customers to access Windows source code. These programs provide many benefits by allowing customers to facilitate security and privacy audits,
performance tune applications, and improve Internal support and troubleshooting capabilities of Windows systems

C Linux has lower hardware requirements

- There is a myth that Linux has much lower hardware requirements than Windows However, if you run Linux with a GUI, which all desktops would, they are quite comparable. Red Hat Linux 7.2 system reqs are: Pentium 200MHz + recommended, 64MB RAM min for GUl 96MB RAM recommended for GUI. Windows XP Professional system recs are Pentium 233MHz min

MS-CC-Sun 000001220088
HIGHLY CONFIDENTIAL


Processes in Place

- Linux desktop virtual team
- CompHot escalations weekly review
  - EDGI request escalations
- Linux compete squad – billv
- International desktop OS tracker

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220089
HIGHLY CONFIDENTIAL


Linux Desktop Field Escalations

36 Escalations, 18 Active, 14 De-escalated, 1 Loss, 3 Wins

- Linux and StarOffice – 5 Active, 1 Deescalated
   - Active Telstra, Bank of Ireland, First Community Bank, Indiana Web Academy, Standard Bank (South Africa)
- Linux OS – 3 Active, 2 De-escalated
   - Active. ABM Amro (Workstation), ETC (Columbian Telco) and SBC Communications
- Linux POS – 5 Active, 2 De-escalated
   - ChevronTexaco, Arrefour, Hollywood Video, CSK Auto, Waitrose Supermarkets
- Linux Embedded – 3 Active, 8 De-escalated, 1 Loss, 1 Win
   - Active: Accent/FireKing – security for Taco Bell and others – close to winning. Safeway – smart clients in shopping carts
   - Loss. VOPAK – Linux embedded on PC option – up to biz units to select
   - Win Royal Carribean Cruise Lines – IBM Linux on client and server
- EDGI – 1 Active, 2 Wins
   - Active. Jordan. Wins. Egypt, Tunisia
   - Mexico and Malaysia EDGI deals were not escalated via CompHot
- StarOffice on Windows – 1 Active
   - Dept of Homeland Security – 170,000 seats, McNealy involved
- OS/2 Migration to Linux – 1 De-escalated

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220090
HIGHLY CONFIDENTIAL


Reactive EDGI Results To Date

- Mexico- $2.5MM ¢committed, adding $25MM to MS
   - Govt-financed PC purchase for home teacher use with Windows XP Home
   - 250K PCs from Acer, iBM, and HP
   - Govt was considering Linux and Win98 due to cost
   - EDGI distributed $10/PC to be used for teacher training
   - Additional purchase of $60/PC for Office, Encarta, and Encarta interactive
- Malaysia – $500K committed, waiting for govt decision
   - EDGI used as delivery mechanism for previous exec commitments
   - Funds used for rural schools, teacher training, non-bootable software
- Egypt – $355K committed, addl $500K to MS, $1 2M to MS over 2yrs
   - EDGI used as delivery mechanism for previous exec committees
   - Govt purchased 6250 PCs at full price, 4166 PCs w/ 100% Windows rebate
- Tunisia – $600K committed, addl $600K to MS
   - Wave 2 of govt-financed purchases of 15K home PCs. Wave 1 was Windows-only, but wave 2 offer includes Linux PCs for $60 per PC less to the end user
   - EDGI contributed $40/PC -$15 end user rebate. $20 sys builder joint mktg, and $5 end user mktg
- Jordan – Pending
   - Ministry of education purchase of 8K PCs, considering Linux
   - We are still working through operational logistics

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220091
HIGHLY CONFIDENTIAL


Brainstorm/Work in Progress

- Biz Value Challenge – evidence
- Usability evidence
- Open MUI
- Proactive govt program
- Tools- more power tools and evidence
- Accessibility evidence
- OEM supportability
- Refurbished hw initiative
- Education
- HEWSf64-bit
- Customer visits
- Enthusiasts

Other

  - BRIClEmerging markets
  - GSLP
  - Project Jack

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220092

HIGHLY CONFIDENTIAL


Open MUI

- Requested by international Windows product managers, esp in emerging markets
- Allows localization where MS can’t justify expense
- Overcomes govt concerns about cultural preservation and mitigates arguments for Linux
- Potentially gives govt control over local dialects
- Enables govt to support local sw industry.
- Builds Windows ecosystem
- Is open-source-like w/o toss of Windows branding or look/feel
- Gives enthusiasts more flexibility to tweak Windows UI

9/10/02 Microsoft Confidential

MS-CC-Sun 000001220093
HIGHLY CONFIDENTIAL


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5 Comments

  1. saulgoode said,

    January 16, 2009 at 4:07 pm

    Gravatar

    - Show customers existing TCO and business value data for Windows XP. There is a lot of data showing good ROI when moving from Win98 to Win XP. A Gartner audited TCO study completed in the City of Vassa, Finland (home country of Linux Torvalds) showed that moving to Windows XP/Office XP would save 31% per PC, per years compared to Red Hat and Open Office. If the customer still pushes back on costs, move to next step

    I like this one. Microsoft basically compares upgrading the version of an operating system to the transition of one OS to a different one. I wondered if they mentioned that if/once GNU/Linux were the original OS, “switching” to Linux would not be nearly so costly :). I also wonder if they ignored not having to upgrade hardware to the same degree if GNU/Linux were being deployed.

  2. Roy Schestowitz said,

    January 16, 2009 at 4:19 pm

    Gravatar

    Lies, damned lies, and statistics.

    Stay tuned as I have lots of antitrust material on IDC and Gartner.

  3. Victor Soliz said,

    January 16, 2009 at 5:57 pm

    Gravatar

    Truth is, most of the studies are actually right, however they are not showing the hidden costs of Linux, they are showing the hidden cost of the dependence IT grew on windows, I wonder if the next generations are going to overcome this problem, cause it is really big, we need actual competition in the OS side of things -Else everybody is screwed- and until this MS-addiction is cured that seems hard.

    35.3% of Office Docs Opened in StarOffice Had Errors

    Like diamonds, MS lock-in is forever.

    I wonder if MS is going to do this Open MUI stuff, it certainly aligns with all its actions that seemed to intend to make sure that ‘openish’ appears to be as good as truly open.

    - Mexico- $2.5MM ¢committed, adding $25MM to MS
    – Govt-financed PC purchase for home teacher use with Windows XP Home
    – 250K PCs from Acer, iBM, and HP
    – Govt was considering Linux and Win98 due to cost
    – EDGI distributed $10/PC to be used for teacher training
    – Additional purchase of $60/PC for Office, Encarta, and Encarta interactive

    Wonder what Miguel de Icaza has to say about his homeland selling out to MS, I also wonder what Mexican tax payers have to say about such massive sum ‘committed’ to MS.

  4. Roy Schestowitz said,

    January 16, 2009 at 7:20 pm

    Gravatar

    I asked him about it, but he did not reply.

    He reads this Web site every day, so I hope he’ll remark on the issue.

  5. Roy Schestowitz said,

    January 16, 2009 at 7:50 pm

    Gravatar

    Little update: billv is the alias of Bill Veghte

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