08.03.09

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Microsoft’s Attack on GNU/Linux Extends to an Attack on Affordable PCs

Posted in Antitrust, GNU/Linux, Microsoft, Vista, Vista 7, Windows at 6:27 am by Dr. Roy Schestowitz

Woman using a computer

Summary: The latest examples of Microsoft’s misbehaviour and harms to the consumer

Microsoft’s most successful business model is based on high margins which are further secured by monopolising the licensing of binaries in an area of computing. Microsoft feels threatened by new ways of distributing software, either as services or as Free software that requires no licensing in the commonly-understood sense.

Microsoft has nefarious ways of tackling the GNU/Linux market. One of them is the so-called “Linux tax”, which is the reason this Web site came into existence (see Ballmer quote at the bottom). Another way is strangulation of the market, which leads to offering of no choice but Windows. How about this new story from Linux Loop?

Would you like your notebook in pink or with Windows?

[...]

Of course if you don’t want a pink computer, you can of course buy the Insipron 15n, which offers a range of colors. Unfortunatley, you pay an extra $60 or so to have Ubuntu pre-installed. Since the vast majority of potential buyers are tech-savvy and reasonably smart, why wouldn’t they just buy the Windows version and install Ubuntu?

The bottom line: market research fail.

Is this true choice? Or fair competition? Well, as we showed before, Microsoft is trying to destroy sub-notebooks ("netbooks") altogether. There is new evidence, e.g. [1, 2], and also an ongoing antitrust investigation. Microsoft wants to eliminate low-cost PCs, which can’t run Windows because it is too bloated by now. Finally we find that “Microsoft plans to use Windows 7 to raise netbook prices,” just as anticipated. They also want to rename this form factor.

After publicly advertising the idea that Windows PCs are cheaper than Macs in its “Laptop Hunter” ads, Microsoft CEO Steve Ballmer told an audience of financial analysts that the company’s attempts to cut prices of Windows to induce demand in emerging markets had failed over the previous year, and that the solution to the company’s woes will be to increase the price of computers.

“The theory was wrong,” Ballmer said, explaining that there wasn’t enough new demand to make up for the drop in profits. “You’ll see us address the theory. We’re going to readjust those prices north [using Windows 7].”

Here is Intel’s latest flirt with Microsoft (they already do some PR for Vista 7). Despite denying it, both Intel and Microsoft suffered from the race to the bottom.

At the Intel Technology Summit in San Francisco on Wednesday, an executive described the imminent mobile future, including a major refresh of Netbook silicon, better-designed “ultrathins,” and turbo-powered high-end laptops.

They still try to make sub-notebooks disappear or at least become more pricey (price-fixing). Intel has already been accused of colluding with Microsoft in this particular area and it is known that Vista 7 is too bloated for low-end computing [1, 2]. Watch what other stunts Microsoft is up to (news from the past week):

i. It’ll cost $80 to upgrade a netbook from Windows 7 Starter to Home Premium

Microsoft is giving netbook makers a choice of pre-loading Windows 7 Home Premium or Windows 7 Starter Edition on low price netbooks. My guess is that most computer makers will stick with Windows 7 Starter, which will be much cheaper, unless there’s huge demand for a more powerful operating system.

ii. Beware the gotchas in Microsoft Windows 7 upgrade, family pack pricing

On July 31, Microsoft went public with two key pieces of Windows 7 pricing information it had been holding back: The cost of its Family Pack and Anytime Upgrade licenses.

iii. Windows XP to Windows 7: It’s Going to Be a Bumpy Ride

The company’s decision not to support upgrades from Windows XP is a rare misstep in the Windows 7 delivery process.

iv. Some cheap PCs aren’t eligible for free Win 7 upgrade

Many potential buyers of laptops priced under $300 in the U.S. had an unpleasant surprise over the weekend: The machines would not be eligible for a free upgrade to Microsoft’s upcoming Windows 7 operating system.

Wal-Mart and Best Buy attracted plenty of buyers during a promotional offering of laptops priced under $300. Some of those laptops sold out just one day after the offers began. The prices were respectable considering the generous features, including large screens, better graphics and DVD drives, which are not typically found in most low-cost netbooks.

However, the laptops came preloaded with the Windows Vista Home Basic operating system, which does not include a free upgrade to Windows 7 in the U.S. Instead, consumers will have to shell out about $120 to upgrade the operating system.

As always, Microsoft relies heavily on ignorance. It preys on those who are susceptible to marketing. And speaking of marketing, we’ve looked at Google News, accumulating items from “Microsoft” feeds for 7 days. Among ~480 headlines, only 3 mention “Vista” (a known product), whereas over 30 mention “Windows 7″ (the imaginary). One cannot remark on the imaginary (Vista 7) until it is used by real people, whom Microsoft TEs can’t keep up with (silencing dissent by harassing [1, 2, 3, 4]). It was the same story with Vista back in 2006.

Abusing the Poor

Another margin headache Microsoft has been having in developing nations where few people actually pay Microsoft even a penny. Microsoft has been fine with that because it is beneficial to Microsoft in the long term. Things are beginning to change:

Microsoft Corp. will raise some Windows operating system prices in emerging markets, reversing an experiment that cut prices to combat piracy, Chief Executive Officer Steve Ballmer said.

“…to combat piracy,” they say. But the real issue they have is competition from GNU/Linux. As Bill Gates put it not so long ago, “It’s easier for our software to compete with Linux when there’s piracy than when there’s not.”

Moreover, said Gates on another occasion: “They’ll get sort of addicted [to Microsoft], and then we’ll somehow figure out how to collect sometime in the next decade.”

That’s precisely what Microsoft is doing in Illinois right now, getting people “sort of addicted” under the guise of charity.

Officials with the Illinois Department of Commerce and Economic Opportunity (DCEO) visited the Workforce Network in Peoria Friday to kick of the center’s first day distributing free Microsoft computer training vouchers through the “Microsoft Elevate America” program.

We wrote about this a month ago, then mentioned it again one week later. Microsoft turned the State of Illinois into some kind of a Microsoft training camp.

“If anybody thinks open-source alternatives are free, I guess as they say, you can see me after class. [...] I will tell you that in any comparison that you would do of Windows with Linux, which is an open-source alternative, we will prove to you that when it comes to total cost of ownership our stuff is more economical, whether it’s the other patent-licensing costs that you might have to pay to use open-source software, which is kind of a big unknown right now [...]“

Steve Ballmer soon after the patent deal with Novell

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