[Haifux] "Windows-Free" laptops in Haifa

Oron Peled oron at actcom.co.il
Mon Feb 9 00:49:12 MSK 2009

Eli, I must say I'm surprised...

On Sunday, 8 בFebruary 2009, Eli Billauer wrote:
> I have to say that the monopoly argument is refreshing. I don't know 
> about the law in this case, but given that there are stable alternatives 
> around for basically any of their products, and they are all for free, 
> they are in no position to play monopoly games.

This is a naive assumption for several reasons:
 * One important reason for vendors to avoid alternatives are the
   "incentives" they get from MS -- the prices and licensing terms
   are set according to the vendor behavior.
   Vendor may loose a lot of money on his MS licenses by daring
   to offer lower cost solution to other customers.
   - A small example -- the phrase "FOOBAR recommends Vista ...."
     on *all* vendor publications worth *BIG* money in licenses.
   - The other side -- Marketing campaign for competing products
     would cost the vendor in MS licenses (no, we don't talk about
     EULA's here, these are vendor licenses with very strict terms
     under NDA's).

 * The basic trick for any monopoly is to use its power in one market
   to reinforce its control on other markets (that's why regulation is
   necessary evil in these cases). An example close to home is what Bezeq
   once did as a monopoly -- cross-subsides local/international calls.
   So, a monopoly like MS can artificially make some of its products
   cheaper than any competition (even have negative price) *for the vendor*
   Obviously this isn't sustainable in the long run for all products --
   However, the trick played by MS is very simple -- you focus on
   the most visible wins and so you can break them quickly
   E.g: Make the Eee-PC cheaper with Windows than Linux (at least
   for vendors), when/if Asus stops shipping Linux Eee-PC's move
   to the next target.

BTW: if you want to mention Dell. Let me remind you this company started
     its Linux offerings in ~2000 and backed out because of "no-demand".
     Did they get any "incentives" to reach this conclusion? If not,
     someone at MS should be fired ;-) Do you think a ~8 years delay
     by a major vendor isn't important?

> On the contrary, they have been forced to drop prices because they're 
> competing with free software. Not to mention deals with governments, 
> driven by the fear to lose a huge number of desktops.

True, and I also think they won't be able to stop the market forever.
But give them enough time and they may just move their monopoly from
the desktop to the data-center -- you would be able to use Linux on
your desktop but you would pay just the same to MS via server access
licenses... (think how Exchange servers are priced and why .Net is
so strategic).

> So even though they have so-and-so of the market, in essence they don't 
> control it anymore.

IMO, we are in a transition period now -- MS have enough power to force
many vendors and limit our options -- our goal is to make it harder for
them. In this sense, things like Zvi's act (with all the PR) help send
spanners in their wheels and make the market more friendly for us.

Oron Peled                                 Voice: +972-4-8228492
oron at actcom.co.il                  http://www.actcom.co.il/~oron
"Debugging is at least twice as hard as writing the program in the 
first place.  So if your code is as clever as you can possibly make 
it, then by definition you're not smart enough to debug it." 
                                                 -- Brian Kernighan

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