Roy Schestowitz wrote:
> __/ [ fakir005 ] on Saturday 09 September 2006 20:08 \__
>
> > Bill Gates has been very very very envious of the Google founders ever
> > since Google went public a few years ago because the high prices set by
> > google for its shares immediately quadrupled and stayed there inspite
> > of the pessissisism of the people.
Actually, the Google founders really understood the stock market, as
well as their market. First of all, they didn't HAVE to go public.
They didn't need the money, the just wanted to be able to give those
who had spent years working week-ends and evenings in the earliest days
with substandard pay a chance to recover some of that personal
investment in the form of equity. Banks don't loan money on the value
of percentage held in a privately held company. On the other hand,
they do loan money on the value of the equity in a publicly held
company. Many of those founders were really more interested in just
being able to get some access to the equity interest they held. They
could diversify their holdings if they wanted to.
At the same time, they seemed to understand that the value of the stock
was also present and would only remain if they didn't just dump their
stock immediately after the waiting period (the way the folks at Red
Hat did). Red Hat granted stock options to many of the contributors to
Linux. Many of those who got the options bought in almost immediatley,
and dumped as soon as their waiting period was over. This caused the
price to crash.
Google also has a very good business model, and is one of the few
companies who can provide ad placement that often gets immediate
results in terms of generated revenue. Companies that track the
referered by to the sale, find that google has a much higher ratio of
referral to revenue than any other media. Quite simply, when you
search google for information about a product you are thinking of
buying, the ads for the sellers and distributors of that product are
right there, in a known place. You know that the right side referrals
are for people who can sell you that product right now, and probably at
a very good price. If you click the Google link provided, there is a
pretty good chance you will be ordering from one of those "right side"
vendors.
The irony is that google does not try to grab the user's attention with
bandwidth consuming jpegs, mpegs, or flash displays. They provide
plain-text hypertext links. This means that the links that are
followed are probably VERY highly motivated toward a purchase decision.
> > So Microsoft had to do something to create this kind of levitation for
> > its shares. So it created a new version for its operating system that
> > has already seen more than dozen version since the creation of the
> > first version (DOS) to power the personal computers to deal a death
> > blow to the main frame that was in use before then
It's ironic that Linux, which is wreaking havoc on Microsoft's desktop
monopoly, is also providing whole new markets for mainframes. I was
working in IBM's Kingston NY facility just before they started shutting
it down, and got to know several of the IBM mainframe support staff (I
was porting X11 to the Mainframe at the time). As they closed that
facility, it looked very much like the mainframe was on it's last legs.
Ironically, a skunkworks project, now called hercules, made it possible
to emulate a 370 series or 390 series machine on a Linux Intel box.
This was intended to help consultants who were programming in Cobol on
ISPF, TSO, and CICS have access to a laptop environment which could be
programmed on an airplane, in a hotel, or demonstrated in a restaurant,
when you didn't have connectivity to a real MVS system.
Then, as a joke, they took the gcc compiler for 370 or 390 (which has
been around for many years), and tried porting Linux programs and
libraries to the 390 emulator.
The joke suddenly caught the eye of some folks at Southbury, who took
on porting all of Linux to a VM image. They decided to take some of
the concepts from CICS and MVS and implement them into the Linux
kernel, to improve throughput and reduce latently due to mutex locking.
Since Linux needed less of the support from the VM, that was also
streamlined. The resulting system, ZVM, ran Linux very quickly, and
still ran MVS and traditional UNIX VMs.
Today, most of the Mainframes being sold, are being sold partly because
they have the ability to run Linux as well as MVS. The customers are
often traditional mainframe customers, but they also know how reliable
and stable ZVM is, and have found that Linux on Z series gives them
that same level of stability at very reasonable prices (adding a Linux
system VM to a Z series machine can cost as little as $50 per month).
IBM also now runs server farms of Z-series Linux machines for large
corporate customers who want the reliability of a mainframe, with the
flexability of Linux.
> > According to an Article, in a Newspaper (Hindu) published in South
> > India, by John Naughton
> > (I don't know why the man choose to write the article in an Indian
> > paper when the microsoft prices are meant to rob the Americans,
> > Microsoft is going to charge the American customers:
> >
> > $199 for the Vista Home version to $399 for Vista Ultimate version
> > with prices as high 299 for other Vista versions.
The irony is that Microsoft charges these rediculously high prices, to
customers who have hard drive failures, usually due to DLL hell, while
they are on the road and need to make a presentation to an important
customer. Under such circumstances, they will spend that rediculous
amount of money for a "full version" of Windows <whatever> just to be
able to do their job the following day. I've had to do it myself, and
let me tell you, that is one strong motivator to use Linux.
It's pretty easy to back up your personal files to a USB hard drive,
but it's not so easy to back up a recoverable version of Windows to
such a hard drive. Ghost and DriveImage can copy the partition to a
file, but the "snapshot" may already be corrupted, or may be so out of
date, that it can't be used to restore anything but the most basic
functionality. And if you need to recover to a different machine, it
probably won't work.
Ironically, this is one of the biggest advantages of using Windows as a
VMWare Client on a Linux host. The VMWare image can be saved and
cloned at different points, and can be recovered to those various
snapshots. This means that you can get the virtual machine configured
the way you want it, with the right software and everything, and then
take your snapshot clone. Then, you can add the applications that
you'll want to remove or upgrade later, and flip between the clones.
For example, if I want to have one clone that contains a full Visual
Studio environment, and another one that has a full Rational Software
Architect implementation, and another that has a full WebSphere
implementation, I can do that, without having to worry about DLL
conflicts.
The main requirement, is that I have a license for each piece of
software, including Windows, and that I have a Windows license for the
machine being used to run the Windows VM. That license has to be for
the latest version I am likely to run. For example, I can't run an XP
VM on a machine that is only licensed for Windows 98.
When I want a "Linux Only" machine, I'll buy a "white box" machine,
which doesn't even come with a disk drive. I'll add a hard drive and
install Linux, and possibly Xen to run additional Linux VMs.
When I want a "dual mode" machine, I'll buy an OEM machine (IBM usually
:D), and install Linux on that machine as the primary operating system,
and put Linux on as the guest VM operating system (for all of the
reasons described above).
On the Laptop, I keep two drives available. One is Linux with Windows
as the guest, the other is Windows with Linux as the guest. This gives
me the ability to run Linux as the primary when I'm in "Linux friendly"
environments, but lets me run Windows as the primary when the hotel
doesn't like my VPN, when the client requires Windows, or when I'm just
doing a lot of documentation in MS-Project, and doing animated
PowerPoint shows.
> > I don't see the end
> > of Microsoft Monolith. But the creation of a new unneeded Monolith
I think even Microsoft has begun to realize that they have to provide
some flexability in packaging to remain viable in the marketplace.
Originally, they were talking about locking ring zero, and declaring
boot managers and VM hosts to be "viruses" which needed to be "wiped"
from the hard drives. But the OEMs have been making most of their
profits on "Linux Ready" machines, and could simply demand the ability
to roll back to XP if business users don't like the way Vista
misbehaves vith Linux as the host.
Windows XP will run on some of the new Intel (Duo) and AMD (Turion 64)
processors under Xen without modification. If Vista runs as a Xen
client, then OEMs and customers are likely to be more willing to accept
it.
Microsoft was able to get away with literally "wiping out" Linux, OS/2,
SCO, and UnixWare boot managers with the Windows 95 "upgrade" because
people didn't know any better. Even then, it took the Linux community
less than a month to figure out how to reconfigure Windows 95 as a
"dual boot" configuration under Lilo and later Grub.
By the time Windows 98 came out, the court and the DOJ was looking so
closely that Microsoft didn't dare try wiping the drives. Some
corporate customers even told Microsoft that if they tried that, that
they would convert all of their machines to Linux.
When Windows XP came out, Microsoft tried to strong-arm corporations
into immediate long-term contracts for XP support. Most of those
contracts expire in October of this year. The tactic got many
customers to accept the "forced march to upgrades" (much of which was
only paper transactions for almost a year), and this gave Microsoft
"bragging rights" (30 million shipped in first quarter), but it also
made the corporate decision makers reconsider alternatives such as
Linux. Nearly 85% of the major corporations developed "disaster
recovery plans" to Migrate to Linux when those original XP contracts
expired.
Microsoft is acutely aware of the fact that most of their biggest
corporate customers are going "off contract" over the next 3-6 months.
They know that most of the machines those companies have been
purchasing are "Linux Ready". They know that most of these companies
have been purchasing machines with OEM licensed versions of Windows XP
Professional (meaning Microsoft can't revoke their licenses). They
also know that many customers have already told their vendors that they
must be "Linux friendly" and/or "Firefox Friendly". Many companies are
now requesting revisable documents in Open Document format, and
requesting "Final" documents in PDF format (Open Office saves documents
in PDF format if desired). Adobe is even beginning to agressivily
offer Acrobat as a way to manage document control, on Linux.
> > For one thing there can never be a new level of security whether you use
> > vista or windows. The lack of security has nothing to do with the
> > vulnerabilities of Windows or of the Browser. It has to do with the web
> > infrastructure consisting of the roles assigned to the servers, clients
> > and the unecessary insertion CGI between the two.
> >
> > Is Microsoft going to develop a new Operating System every two years.
Part of the problem is that they don't do a great job of supporting the
ones they do develop. They keep introducing "revolutionary" new
versions, with new features that are designed to break old 3rd party
applications (Microsoft competitors), and designed to make the version
prior to the previous release (Windows 2000, Windows ME, and prior)
"obsolete". Microsoft tried to declare Windows NT obsolete 3 years
ago, and had to keep backpeddling because every time they approached a
customer about forced upgrades to Windows XP or Windows 2003, the
customers would start migrating everything they could to Linux or UNIX.
Even when they would buy Windows 2003, it was obvious from the number
of CALs purchased that the customer was simply "rolling through"
machines, putting the fastest hardware available on the Windows 2003
server, then converting the old server to Linux.
The problem more recently, has been that 64 bit machines need Linux to
fully exploit the power and flexibility of the multicore 64 bit chips.
Customers are now buying more and more Linux Server machines as Linux
machines. This is especially true with Blades, which have been a huge
segment of the Linux industry. Some blade racks now offer as many as
128 processors per 19 inch rack.
> > First there was an operating system (DOS) that was replaced by several
> > versions of windows the last of which was XP version and now there is
> > the first version of vista for which people have to fork over $399.
Actually, Windows XP professional, Full Version, sells for an MSRP of
$399.
Most retailers discount it somewhat, but even then, it's typically over
$300 for Full edition. Mostly, these are sold to people who are on the
road, and can't have deskside support reload their laptops. Many
companies now require a complete description of why this software had
to be purchased, along with the expense report. If they don't feel
that the expense was justified (immediate emergency situation with no
alternative), they can even require that the employee pay the expense
out of their own pocket. They are also taking the same attitude about
emergency purchases of MS-Office, Visio, and most other Microsoft
software. These days, the retailer carry a small inventory, because
Microsoft pays the rent on the space. There aren't that many copies
sold. Most of those that are sold, are because the OEM didn't provide
an installation media kit, and the recovery partition has failed.
There are probably fewer Windows licenses sold to end-users, than SUSE
Linux licenses sold through Retailers in "Shelf box" format.
> Vista /is/ XP. Or XP++. Or Service Pack III. And the cost of Vista may easily
> exceed its price tag as the hardware requirement are extremely high, and yet
> they are not justified by the added value.
Reminds me of Windows NT 3.1. Microsoft wanted to get a 32 bit version
of Windows out, and they wanted it to be "Better than Unix". The
machine needed about $1000 worth of RAM, and hardware upgrades, or
required the purchase of a new $3,000 machine. After the money was
spent, users found that most of their favorite applications, especially
3rd party applications, didn't work. The machine was not that fast,
and the new security model was a problem because early Windows users
would forget their passwords and lock themselves out of the machines.
The hackers could get into the machines, but the end users couldn't.
> Suddenly, even that wreck called
> XP seems like a better deal. But people still suffer from Microsoft's fight
> against the /visibility/ of Linux. And people get Windows (whichever version
> is offered) from the OEM.
At one time, the OEM believed that "Without Microsoft (OS du jur), all
you have is a box with blinking lights". Today, OEMs know that Linux
will work perfectly well, but they also know that most customers still
want to run Windows in some form. Microsoft's pricing model is pretty
simple. By what you need (say 80%) at 10% discount, or by way more
than you need at a 40% discount. Let's say that the OEM price is $100
for 100 copies or less. Let's say that the OEM can sell 10 million
machines, both the OEM and Micrososft know this, based on previous year
sales, license registrations, and the XP "phone home" update service.
The OEM can buy 8 million licenses for $90 per copy, for a total of
$720 million. Or the OEM can buy 12 million copies at $60 per copy,
which also happens to be $720 million.
There is a catch. The OEM must purchase all of those copies within the
year. They can only install them on their own machines (can't sell
them to other OEMs or VARs), they can't use them the following year.
On the other hand, if they order the entire amount, Microsoft will
finance the purchase interest free, and give them 12 months to pay. If
the user violates the OEM license agreement, they still have to pay off
the loan, even though the licenses purchased would be revoked. If the
licenses are revoked, Microsoft can negotiate a "repurchase", and might
even offer them for as little as $10 copy, but only if the OEM accepts
even more draconian terms.
Keep in mind that the terms are also pretty simple. Microsoft will
provide the "core" configuration. Any change to that configuration
(such as addition of drivers for hardware) must be approved by
Microsoft prior to shipment. This means that ANY change to the
configuration, such as the addition of boot managers, change in drive
partitioning, additional applications, and so on, must be approved, by
Microsoft, in writing prior to shipment.
Historically, Microsoft has not approved such changes as removing the
IE icon from the desktop, removing certain other links from the
strategic locations, addition of 3rd party software such as FireFox or
OpenOffice. They have also not approved boot managers, VMWare,
multiple partitions on the hard drive, and operating systems on the
hard drive.
There is no formal policy that says "though shalt not install Linux",
but Microsoft has consistently "not approved" (delayed, withheld, not
responded, or rejected) all changes to the configuration which would
make it easier to install Linux or any other competitor operating
system. Even though SFU and Virtual PC are free, the OEM is not
allowed to install them (Microsoft wants to know who is investigating
them, so they can harass them - oops, I did it again).
> And buying Windows just because it there is like
> shitting your pants because that's where you asshole happens to be.
I like the analogy. It's actually very appropriate.
Again, the pricing structure (10% discount for 80% of need, 40%
discount for 120% of need) means that, even though the OEM knows that
about 20% of his customers might be installing Linux and will never
need Windows at all, it costs nothing extra to order the extra licenses
and simply "include them". Besides, Microsoft's OEM license agreements
usually require that Windows be installed on all licensed machines that
are shipped. The only exception is when a machine is sold without a
hard drive.
> > That is Highway Robbery.
It's called negotiating leverage. Both the OEM and Microsoft know that
the OEM only needs licenses for about 80% of the machines, but since
the OEM needs the licenses for that 80%, it's not like they can just
"walk away" from the negotiating table.
IBM actually DID walk away from the negotiating table. They sold their
entire PC (laptop and desktop) division to Lennovo, and then purchased
the OEM machines from them. This means that IBM is now a VAR, and can
do anything they want to those machines, as a function of consulting
services. If IBM wanted to sell 50 million Linux PCs next year, they
can simply sell the PCs to their clients, along with the consulting
service of customizing the machines - the same way that they customize
machines that are sold as servers. I'm not saying they WILL, but they
COULD. And Microsoft really couldn't stop them.
Keep in mind, that most corporate customers have a "corporate image"
which they specify. This image is normally used to replace or
reconfigure existing systems.
It's not an illegal copy, it's simply creating a more supportable
machine. For example, Prudential Insurance has their machines
configured with a very small C: partition which holds Windows and a few
other pieces of "Key" software. The second partition E:, is where all
of the application software and personal user data is stored. There is
even a network drive for storing company information (so that it won't
get lost). This is how the end-user gets their machine.
> > I wish people would continue using Windows or dump microsoft altogether
> > and choose Linux and show Microsoft that they will not tolerate any
> > Monolith be it Google Monolith or Nicrosoft Monolith
I don't think Windows is going to go away completely, but I don't think
Microsoft is going to be able to strong-arm corporate customers into
Vista either. Corporate customers are now much more prepared to make
the transition to Linux as host than they were 3 years ago. They may
even be able to use WINE and their OEM Windows licenses to meet their
needs. They don't NEED to sign up for premium priced services which
limit their abilities to configure their systems in the manner they
choose.
> > REJECT MICROSOFT VISTA AND STOP MICROSOFT HIGHWAY ROBBERY..
I think we are beginning to see this sentiment throughout the industry.
They are willing to tolerate Windows and even Vista, if there are no
restrictions on it's use. They are not willing to continue to have
Microsoft "tell them what they are going to eat". With OpenOffice,
FireFox, and numerous critical applications now available on both
Windows and Linux, and Linux now offering equal or better applications
at a fraction of the cost, Microsoft no longer has the only "loaded
gun". Countries like Brazil are now using Linux everywhere.
Government offices, schools, businesses, and non-profits all use Linux
these days. Many of the machines even arrived with Windows licenses
preinstalled, but the machine are converted to Linux - because of the
costs AFTER the machine is turned over to the user.
Keep in mind that the OS is just the tip of the iceberg. Microsoft
gets 85% profit margin on the OEM versions of MS-Office. They get 90%
margins on Visio, Project, and Visual Studio. They get substantial
margins on Exchange. The end-user gets misdirected to MSN and ends up
getting billed $20/month. Microsoft can easily make as must as $2,000
per machine in revenues AFTER the Windows. This is one of the reasons
that they are willing to offer OEM prices that are 75% off MSRP, then
reduce them another 40% for market "saturation". Microsoft will sell a
$400 product (MSRP) for $20 per copy because they can get $4,000 over
the next 5 years from the customer if they do so.
Keep in mind that Microsoft gets this revenue not only from products,
such as Office, Project, Visio, SQL Server, and Exchange, but they also
get revenue from MSN, Expedia, MSNBC, CNBC, CarPoint, Monster, and so
on. Microsoft typically collects around 25% of the commission or
margin on everything from home equity loans to employment to travel to
brokerage commissions. Over a 5 year period, the "tie ins" can be far
more valuable than the actual "Operating System".
More than anything else, THIS is what Microsoft considers the biggest
threat of Linux and OSS. If people don't have Windows constantly
trying to guide them to Microsoft revenue opportunities, they might
start buying goods and services from competitors. Perhaps some of
Microsoft's big server customers and strategic partners will be less
willing to pay automatic upgrades to keep pace with revenue growth (not
"commissions", just license fees - to avoid regulatory interferance).
Yes, Billy and Steve have their fingers in a lot of pies, and a lot of
pockets.
And Linux threatens that.
Rex
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