Bonum Certa Men Certa

Leaked Microsoft Memo: How Microsoft Changes the Prices at OEMs to Block GNU/Linux Sales

Summary: Antitrust exhibit shows how Microsoft changes its pricing to suppress interest in Mandrake (GNU/Linux)

SOME PEOPLE wish to know why certain shop cease to sell GNU/Linux-powered computers (or sub-notebooks with GNU/Linux), or in some cases no longer make available GNU/Linux with comparable hardware. The truth of the matter is that Microsoft systematically sets the prices to deny GNU/Linux entry into the market.



We have just pulled an antitrust exhibit which shows what Microsoft is doing. As far as we are aware, this exhibit was never published or used by the courts before. The full exhibit (2003) [PDF] can be found as text at the bottom of this post. Here is the gist:

From: Brad Beadles Sent: Tuesday, June 24, 2003 4:31 PM To: Dale Watanabe Co: Bret Arsenault; Scott Johnson (DENVER); Tim Schmidt (DENVER); David Brandt (DENVER); Ann Nicholson Subject: LDS Church - Hewlett Packard Importance: High

[...]

Outside of the hardware they are considering alternatives to their current standard of Windows O/S and MS Works on the desktop in these local units. They are considering Mandrake, Debian, Red Hat and Open Office because of their upfront costs. HP is quoting their system to include both the Windows O/S ($80) and MS Works ($15) for an overall software acquisition cost of $95 for the O/S and Application Suite The Open Source alternatives are $8.50 for the O/S of choice which is currently Madrake (Open Office is $0.00). As you can see, we have a price delta of $85 between the MS solution and the Open Source solution.

Is there anything we can do with/for HP to lower the O/S cost to become more competitive? Dell is quoting $30 for the O/S and the MS Works product team is giving us $25 for MS Works for a price point of $55 for the Dell software acquisition costs.


Microsoft talks about becoming "more competitive". To understand what Microsoft means by that, this antitrust exhibit should be read.




Appendix: Comes vs. Microsoft - exhibit px08618, as text








From: Date Watanabe Sent: Thursday, June 26, 2003 3:59 PM To: Rick Wong; Rob Young (OEM) Cc: Kurt Kolb Subject: FW: LDS Church - Hewlett Packard Attachments: RE: LDS - Open Source - Quick Update; RE: LDS - Open Source - Quick Update

I took this offline with our guy, Brad, but I think we should be concerned that they are breaking out the OS separately.

Dale

From: Dale Watanabe Sent: Thursday, June 26, 2003 12:09 PHM To: Brad Beadles C€¢: Bret Arsenault; Scott Johnson (DENVER); Tim Schmidt (DENVER); David Brandt (DENVER); Ann Nicholson Subject: RE: LDS Church - Hewlett:t Packard

Brad, 1.. OEMs should NOT be quoting separate prices for OEM versions of OS and applications. If they are, they are violating their licensing agreement with us. 2, Given the fact that the prices that you quote from the OEM are no where near their true price from us, then the above is probably not a really issue, but the end user customer perception ends up getting skewed. 3. OEM OS prices are uniform based on volume, Anyone can figure out from IDC data, etc. that HP’s and Dell’s volume are virtually the same. We do not have any flexibility to change prices on a deal basis. But I don’t think that is the real issue here.

Please give me a call. Rather talk through this with you.

Dale 425- 706-8 796 Cell: 206-953-2233

From: Brad Beadles Sent: Tuesday, June 24, 2003 4:31 PM To: Dale Watanabe Co: Bret Arsenault; Scott Johnson (DENVER); Tim Schmidt (DENVER); David Brandt (DENVER); Ann Nicholson Subject: LDS Church - Hewlett Packard Importance: High

Hi Dale,

Bret asked me to ping you with a competitive situation we are having with The LDS Church here in SLC. To net it out, HP and Dolt are their PC providers of choice. The Church has asked them to come back with systems that are under $500 for their local area offices and units around the world. This constitutes approximately 25,000 PC’s.

Outside of the hardware they are considering alternatives to their current standard of Windows O/S and MS Works on the desktop in these local units. They are considering Mandrake,

MS-CC-RN 000000784853 HIGHLY CONFIDENTIAL




Debian, Red Hat and Open Office because of their upfront costs. HP is quoting their system to include both the Windows O/S ($80) and MS Works ($15) for an overall software acquisition cost of $95 for the O/S and Application Suite The Open Source alternatives are $8.50 for the O/S of choice which is currently Madrake (Open Office is $0.00). As you can see, we have a price delta of $85 between the MS solution and the Open Source solution.

Is there anything we can do with/for HP to lower the O/S cost to become more competitive? Dell is quoting $30 for the O/S and the MS Works product team is giving us $25 for MS Works for a price point of $55 for the Dell software acquisition costs.

Regards,

Brad D. Beadles Microsoft Corporation 801.257.6400

Utah Events and Information http://microsoft.com/usa/offices/saltlake.asp

3/10/2005

MS-CC-RN 000000784854 HIGHLY CONFIDENTIAL



Comments

Recent Techrights' Posts

If GNU/Linux Rising is Just "Bots" (It's Not, Many Surveys Show the Same), Why Does Microsoft Rush to Lie About System Requirements of Vista 11?
The real reason is, GNU/Linux is rising
 
Red Hat is in Need of a 'Jolla', as an IBM-Controlled Red Hat is Becoming Like the Microsoft-Infiltrated Nokia
Dying fast, partly by design
Gemini Links 08/08/2026: Gigs, Poems, SREs, and Shared Passion
Links for the day
Kompromat Tactics in GNU and Linux
Kompromat as a concept was covered here in the past in relation to Microsoft
SLAPP Censorship - Part 143 Out of 200: After Nearly 10 Attempts to Settle With Us and Over a Million Pounds Spent on Lawyers and Barristers
We are in no particular hurry
20 Years and 43 Years
GNU/Linux is not just code, it's a philosophy, licence (copyleft), and community
GNU/Linux Turns 43 Next Month, Many Distros Actively Maintained
A lot of Debian-based distros are still actively maintained (we talk about this in IRC this evening), so the stability of the Debian Project is important
Links 08/08/2026: GAFAM Colonialism "Paved Over Protected Wetlands", Slop Companies Hoard Software Patents as Debt Soars to Trillions
Links for the day
Links 08/08/2026: "Palantir Paid No Federal Income Tax" and "Who's Responsible for This Mess?"
Links for the day
Retained: The Time IBM's Red Hat Tried to Hijack or Take Offline Site of Critics, Failed on All Grounds (Meritless Action Intended to Harass Critics)
Replicated from adrforum.com
IBM's 'Final Solution': Censor Sites Not Controlled by IBM, Sites Where Dissent is Expressed
IBM has no culture of free speech
More Mass Layoffs Coming IBM's Way (Ones IBM Cannot Hide, Cannot Convince Enough People to Leave or Unjustifiably PIP Them When They Say No)
The company that was like a "father of modern computing" is now stingy when it comes to travel. Not a good sign.
What Will it Take for Mainstream Media to Report Silent or Secret Layoffs at IBM?
"Silent" or "secret" sometimes because the media won't cover them
Is the Future of IBM Red Hat Temporary Staff, Contractors?
They want cheap, obedient lemmings
Gemini Links 08/08/2026: Tribute to Lloyd Center, Radio Amateurism, Homeworlds
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, August 07, 2026
IRC logs for Friday, August 07, 2026
Microsoft Uses Slop to Find Defects and Then Uses Slop to Replace Code, What Could Go Wrong?
Botspam is the problem, it's not a constructive approach in any shape or form
analytics.usa.gov: GNU/Linux Up Some More This Week
Days ago it said 6.4%, now it's up to 6.8%
RA-pocalypse: IBM Tells Workers "Taking a Hike" is Their "Next Step" ('Voluntary' Layoffs), Now It Prepares to Sack Lots of Contractors
There definitely is something going on
Legal Attacks on Techrights Have Made Techrights More Popular and More Widely Read
The misogynists will have plenty of work to do this summer
Kai Stephens (Barkley Walsh) & British Democrats in Clacton by-election hustings
Reprinted with permission from Daniel Pocock
Daniel Pocock 'Punching' Nazis in the UK
The so-called "cult" of so-called "Debianism" was left with nothing but massive legal bills
SLAPP Censorship - Part 142 Out of 200: GemText is Not a Webpage, Gemini Protocol is Not the Web, and Capsules Are Not Websites
our intention to appeal (escalate to the Court of Appeal)
Microsoft: Our August 2026 Layoffs Are Not Layoffs Because... Reasons
That's like IBM making "spin-offs", then pretending that no layoffs are happening
Links 07/08/2026: UMG and Anthropic in Trouble Over Copyright Infringements Sold as "Training" (Slop)
Links for the day
Links 07/08/2026: "BMW Is Showing Commercials On Their Car's Dash Screens And They Want You To Think It's A Treat", Software Patents on Drones
Links for the day
What We Said About Red Hat's Fate Under IBM Turned Out to be Right on the Money (That IBM Lacks)
There are no layoffs at IBM
IRC Networks Show No Signs of Going Away, IRC Enters Its 39th Year
That IRC daemons are still actively developed and patched in summer of 2026 (over 38 years after IRC was born) says a lot about IRC's importance
Social [Control] Media Needs to Die
I am a bit shocked to recall that I wasted a lot of time on it
Some Malware is Legal Because It's Made and Distributed by Politically-Connected GAFAM
In reality, the security non-experts 'championed' (and salaried) by GAFAM are anti-security people who advocate back doors
The GNU/Linux Anniversary is Next Month, Not This Month
It'll turn 43
At Clacton by-election Hustings Event Daniel Pocock Says "Social [Control] Media Has Contributed to Some of the Anti Social Behaviour."
No doubt many problems in society are caused or at least amplified/accentuated by this horrible phenomenon
IBM Insiders Explain Why IBM is in Very Serious Trouble
Will IBM last long enough for any "quantum" deliverables to become a reality?
The Register MS Took Money From Broadcom to Publish Fake 'News' With "AI" Mentioned 35 Times
not legitimate or authentic journalism.
GNU/Linux Approaching 20% in Georgia (the Country)
Usage of GNU/Linux was near 0%, as measured by statCounter, several years ago
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, August 06, 2026
IRC logs for Thursday, August 06, 2026
Gemini Links 07/08/2026: Radio Amateurism, Summer Updates, and Programming "Taste"
Links for the day
Links 06/08/2026: Billboard Chart Contaminated by Slop Plagiarists, Sheinbaum Blasts Social Control Media
Links for the day
A Long Break and What's Coming Next Year
Some time next year we definitely plan to show how the EFF failed women, failed bloggers, and basically prioritised GAFAM
Daniel Pocock on a "metre-long ballot paper"
The Debian "cult" (as he calls them collectively) is simply jealous of him
Links 06/08/2026: Disney and Fentanylware (TikTok) Deal, "Hearing Aids Shenanigans"
Links for the day
IBM Mass Layoffs Began Yesterday, They're Sold as "Voluntary", the "Offer" Runs for Two Weeks (Last Day August 19th 2026)
IBM will self-detonate while using contractual agreements to force people to smile
Start of September 2026 'Voluntary' Mass Layoffs at IBM, Start of October Red Hat Employees Forced Into the 'Bloodbath' (After Collapse of IBM's Shares)
Red Hat is in trouble
Many GNU/Linux PCs Are Not Connected to the Net or Don't Use the Web
Saying GNU/Linux user-agents are just "bots" (Microsoft Lunduke and other Microsofters say this) is like asserting that the Twin Towers fell not because of two giant planes but because of explosives
They Call Occupations "Professions" Because the "Pro" Means Something
If you want to find tech news online
New Conference Paper (Science of Cyber Security) Credits RMS With Delaying Passwords
When it comes to passwords, RMS was "right"
Removing Gender Barriers in Computer Science
It is not that "women aren't good at maths"
In Brunei, GNU/Linux Approaches International Average of 8.5%
a sharp rise from 0% to about 7.5% happened in a few years
15% of IBM Staff Marked for Layoffs ("RAs"), the Workers' Objective is to Find Another Employer and Leave
"That's not a workforce, that's a waiting room."
Maintenance to be Completed Tonight (IPv6)
Notice how, after 25+ years, we're still not fully adopting IPv6, we're only about 50% there
A Data Centres Hub Puts Everyone at Risk, Especially People Who Live Near Them at Times of War/s
Spoiler: Datacentres are military targets, they attract missiles, some with nuclear warheads
GAFAM Mass Layoffs and Mountains (Trillions of Dollars in 'Secret' or 'Off-the-Ledger') Debt
GAFAM is having layoffs this month
August 2026 Microsoft Layoffs Confirmed by Staff This Week
It's hard to assess how many are impacted but signed an NDA, preventing them from speaking about what really happened
analytics.usa.gov Says 7% of Sessions Come From GNU/Linux and ChromeOS. If ~40% (Mobile) Get Omitted, It's More Like 11%.
In desktops and in laptops GNU/Linux has become a big player
IBM Cannot Survive for Much Longer, There Are Limits to RAs and Offshoring, IBM Now Asks Workers to Quit
IBM is in very serious trouble
SLAPP Censorship - Part 141 Out of 200: Brett Wilson LLP Failed to Learn From the Mistakes of the European Patent Office (EPO)
my solicitor, David Allen Green, put them in their place
Texts of the Claims From Balabhadra (Alex) Graveley and Matthew J. Garrett Almost Identical, I am Suing for Abuse of Process
Half a decade ago Balabhadra (Alex) Graveley from Microsoft and GNOME was arrested for strangulation in Texas
Gemini Links 06/08/2026: "Eat That Frog", Mutt Terminal Email Guide, and BASICODE
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Wednesday, August 05, 2026
IRC logs for Wednesday, August 05, 2026