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

Trolls With LLM Slop Are Disrupting Communications About Mass Layoffs at IBM
LLM slop to drown out the signal
Bing Might Shut Down - Just Like Skype Did - Some Time in the Coming Months/Years (Parts of It Already Shut Down)
they try to bring the losses under control
 
The SLAPPs From Microsofters Distract From Serious Copyright Infringement by Microsoft and Apparent Business Crimes
Aside from other issues, such as strangling women
Enshittification is Everywhere: You Pay More, the Services Get Worse
"Enshittification" is a term coined by an online friend; I increasingly use this term to describe what's happening even outside the realm of technology (which it was adopted to describe)
Microsoft Reduces Office Space Ahead of More Waves of Mass Layoffs
"The Gerstnerisation of Microsoft"
Anti-Linux FUD Produced by Microsoft LLMs to Blame "Linux" for Microsoft's Own Failures
We call out some of the worst culprits
Gemini Links 16/05/2025: Hoking GPS, Grabovac, and Tanana
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, May 15, 2025
IRC logs for Thursday, May 15, 2025
Microsoft WARN Notices Proliferate in the United States
From what we've seen, this wave was more than 3% (a lot more) and the next wave/s will be even bigger (possible as imminent as weeks from now), based on insider leaks
Links 15/05/2025: Google Betrays Publishers Again, Openwashing by Sysdig
Links for the day
Richard Stallman Still Respected by Many in the Libre Graphics Community
Richard Stallman and Professor Moglen never harmed anyone
If You Read Techrights, Then You Probably Want to Read Tux Machines as Well
That site is more active than this one
Gemini Links 15/05/2025: Forced Music in Publicly Accessible Space and ~silv is Online
Links for the day
Links 15/05/2025: KOSA Censorship (USA Becomes More Like KSA) and More National Cuts
Links for the day
Your Real Ally Would Not Defend the Company of SLAPP and Strangling of Women
who's left to tell us what's true?
Breakdown of Microsoft Layoffs Shows It's About Cost, Not Performance or Hype (Like "AI")
MSN (Microsoft) reposted this with some unnecessary spin
The Lawyers Working for the Serial Strangler From Microsoft on SLAPPing Techrights Have Apparently Lost Their Voice
the moment we mentioned that their media lawyer is leaving they went all quiet in social control media
At IBM, Relocation Can be a Trick or a Trap (IBM Gets Rid of Staff Under the Guise of "Relo")
IBM is not being honest with employees
Microsoft Rumours: This Week's Scale of Layoffs "Higher Than Reported" and More Coming Soon ("A Lot More Severe" Than May's)
The "3%" figure is false
Slopwatch: Sloppy Brian, Brittany Slop, and General Observations
Creative people don't need slop; there's just nothing good about it, slop appeals to lazy people careless about quality
Over at Tux Machines...
GNU/Linux news for the past day
Beyond Mass Layoffs at Microsoft: Entire Units Shut Down for Good
And it's far from over
Links 15/05/2025: Crikvenica, Analog Computer, and Slop 'Hallucinations'
Links for the day
IRC Proceedings: Wednesday, May 14, 2025
IRC logs for Wednesday, May 14, 2025
Links 14/05/2025: Fentanylware (TikTok) Harms Kids, Russia Refuses to Defuse
Links for the day
Gemini Links 15/05/2025: Poseur Nerds and Mennonites
Links for the day
VS Code Is Not FOSS, And Neither Is the Site "It's FOSS"
VS Code is proprietary spyware of Microsoft, yet this site keeps promoting it like it's FOSS
No, Microsoft Didn't Lay Off So Many People Because of "AI" "Innovation" or "Efficiency" or "Era" or "Revolution" Etc.
Debunking one very common lie
What We Do When We Say "GNU/Linux" to People
It talks about "Linux", "GNU", and what it means to say "GNU/Linux"
Links 14/05/2025: Facebook And Instagram Risk Nationwide Bans, Microsoft Subsidiaries Have Mass Layoffs Too
Links for the day
Canonical Will Give You Money Only If You Work for Microsoft!
Only if you are servicing (being a slave to) proprietary forges that Microsoft and the NSA control while violating the GPL will Canonical give you money
If Microsoft Staff That Strangles Woman Pays You to Write Lies, It Will Not End Well
The past couple of years were our most productive ever
Gemini Links 14/05/2025: "Writing My Story with Inspiration from Notable Lives" and People Start Shovelling Up LLM Slop Onto Geminispace,
Links for the day
Microsoft is Very Highly Stressed About Adoption of GNU/Linux at Windows' Expense (on Former "Vista 10" PCs)
What does this tell us?
Slopwatch: BetaNoise (BetaNews), LinuxSecurity, and Slopfarms Still Promoted by Google News
The primary goal is to demonstrate the problem persists
Links 14/05/2025: Google Agrees to $1.3 Billion Settlement After Spying, China Tariffs Don't Work
Links for the day
There Are Also Loads of Microsoft LinkedIn Layoffs Today (Keep Track of the Subsidiaries They Keep Out of Headlines)
Perhaps lost in the smokescreen
There Are Bigger Rounds of Microsoft Layoffs Coming, a Cull of 10% Implemented in Waves (the "3%" Figure is Misleading, Face-Saving)
Last night we said they might do the layoffs in three or at least two waves
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, May 13, 2025
IRC logs for Tuesday, May 13, 2025