-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1
Another Year, Another Microsoft Job Targeting FOSS
,----[ Quote ]
| Microsoft is up to its old tricks in the new
| year, as evidenced by a recent job posting for
| anti-FOSS personnel. This time, the thing that
| has Redmond sweating is what appears to be a
| mass migration of students to OpenOffice. And
| why wouldn't they? "It's free-as-in-beer and
| good enough -- much better than the Microsoft
| Works that came on their computer," noted
| Slashdot blogger David Masover.
`----
http://www.linuxinsider.com/story/Another-Year-Another-Microsoft-Job-Targeting-FOSS-69050.html
Danish Schoolchildren Complaints About OpenOffice
,----[ Quote ]
| Microsoft's technology director Jasper
| Hedegaard Bojsen then sent an open letter to
| the municipal mayor, which he denied that that
| OpenOffice should be an equal and cheaper
| alternative to Office. It led to accusations
| that Microsoft tried to implement a scare
| campaign.
`----
http://anotherubuntu.blogspot.com/2010/01/danish-schoolchildren-complaints-about.html
___
From: David Driftmier
Sent: Thursday, May 30, 2002 2:47 PM
To: Orlando Ayala; Kevin Johnson
Cc: Sherri Bealkowski
Subject: Education and Government Incentives (EDGI) proposal
Importance: High
Orlando,
A cross-group team has been working for the last two weeks on a proposal to
have a more planned response process to defend against Linux and other
low-cost/no-cost competitors in large education/government deals in both
developed and developing subs. Input has been provided by the Windows group,
OEM, WWLP, LCA, EdSG, SLG, the international RVPâs and AlainC. Attached are
the slides that will be included in the Windows BPR and the proposal itself is
included for background. SherriB will be there for this pot[ion of the BPR to
represent EdSG. Please let me know if you have any feedback or changes that
you would like to see incorporated into the proposal or if you have any
questions that we can address prior to the Friday meeting.
Also, I just received a call from Pat Fox in the Windows group and based on a
conversation that he had with JimAll, Jim is going to recommend that we focus
this initiative initially on the education market, with an eye towards
expanding to the government sector if it makes sense later.
Thanks,
Dave
David Driftmier
Director, International Operations
Microsoft Education Solutions Group
+1 425-705-4113
NS-CC-Sun 000001130300
HIGHLY CONFIDENTIAL
Winning Government and
Education
âEDGIâ (Education & Government Incentive) Program
MS-CC-Sun 000001130301
HIGHLY CONFIDENTIAL
Executive Summary
In order to more effectively win in the large education/government deals where
we compete against low/no-cost offerings, Microsoft will introduce a
predictable and replicable process to engage in and win these deals. A common
current scenario is one where a government wants to provide for a common
technology platform across all schools in the country/province/state. They are
either seriously considering open source due to cost and political pressures
or are using Linux and StarOffice as levers to negotiate price with Microsoft.
This scenario is closely tied to, but not limited to, the challenges seen in
developing countries where economic pressures often force governments to seek
low-cost/no-cost solutions (see Appendix for recent examples.)
Just as we are focused on delivering end-to-end solutions to our commercial
customers, we will endeavor to approach these deals with an end-to-end
approach at addressing the underlying needs of the community and/or
educational institution. A plan similar to the Enterprise Agreement Services
Incentive [EASI] will be put in place to help address these issues.
Goals
There are two major goals of the Education and Government Incentive program:
* Ensure government and education customers can experience the value of
Windows, Office and other Microsoft products
* Address affordability, application compatibility, teacher training and
curriculum, additional software needs
It is important to note that there are two major issues that need to be solved.
1. How to best help developing countries jumpstart the establishment of an
effective educational infrastructure that can leverage the benefits of
technology
2. How to effectively win against the no-cost/low-cost competitor in large
government deals (i.e. âDonât lose to Linuxâ).
This proposal is squarely aimed at the second issue, although there is
considerable overlap between the two. There are deals (primarily large
government deals in developed countries) that fall outside of the first issue
but are still included in the second. However, the majority of instances where
Microsoft finds itself addressing the first issue, it will be addressing the
second at the same time. Consequently, providing assistance to developing subs
is a subset of the larger problem of responding to the large deals.
Assumptions
This proposal is shaped by some underlying assumptions about the business
environment:
* A completely âfreeâ model for education is not desirable for the
following reasons:
MS-CC-Sun 000001130302
HIGHLY CONFIDENTIAL
*
o Approx. $1B annual revenue stream currently being realized through
sales to academic institutions
o The current pricing (deeply discounted) helps ensure that a healthy
ecosystem exists where MS and its partners continue to innovate and deploy a
sales force to work with customers to define and realize the full value of the
software.
* Customer concessions cannot impact OEM royalties or rely on an OEM
delivering ânakedâ PCs without an OS (i.e. no reduced price full OS offering
or in academic space)
* Many subs do not have sufficient dedicated resources to drive the
fully-integrated vertical ISS sales process needed to re-engineer the large
customersâ vision of needs
* We cannot and will not compete with Linux/StarOffice solely on price,
however the price allure of âfreeâ must be addressed as part of competitive
response.
* Scenarios not limited to Linux/StarOffice, nor are they limited to
developing subs, although these are our current primary areas of urgency
* We do not want to develop a standard âofferingâ as this becomes not only
our new price point, but also invites large customers to create new tenders
which we may not be competitive with on price.
Plan
Taxonomy
In order to better analyze the opportunity, the following taxonomy is proposed:
* Developed country (e.g. US, Japan, Belgium) These countries typically
have per capita GDPâs greater than USD$3,500.
* Developing country [Large, High Potential] (e.g. Brazil, India, China,
Russia) These countries typically have lower GDPâs (< $3,500 per capita),
large populations with the potential to support a considerable IT
infrastructure in the next 3-5 years
* Developing country [Large, Low Potential] (e.g. Indonesia, Bangladesh).
Same as above but with little potential for real IT infrastructure in the near
term.
* Developing country [Small and Medium] (e.g. Eastern Caribbean,
Philippines, Ecuador) Countries with low GDP and potential that is limited by
their size.
Note: A revenue report is attached m the Appendix that shows countries
currently generating revenue and their status according to the taxonomy above.
Funding
Since these opportunities are largely tied back to winning in a specific
competitive environment (Linux and StarOffice) we are proposing a $50MM
(approx. 5% of WW Education revenue) fund that is allocated from the Windows
and Office P&Lâs (30MM Windows, 20MM Office). This funding would be allocated
out to the regions using the following percentages: Americas 25%, EMEA 35%,
and Asia 40%, based on the majority of funds being targeted at developing
countries. The regional funds would then be used
MS-CC-Sun 000001130303
HIGHLY CONFIDENTIAL
to support large deals by providing monies on the customerâs behalf for
value-add products and services (incentives) instead of offering low or
no-cost software.
It is also important to note that in many countries, there exist untapped
funding sources, especially in developing regions. Close cooperation between
business groups and LCA will be needed to identify initiatives and programs
from sources such as the World Bank, IDB, IMF, etc that can potentially be
used to help fund the community development portion of large government deals.
Response
A process will be put in place whereby the following occurs:
1) Using the Global Education Leadership Team currently being established by
EdSG, a global pipeline management process will be refined where top
opportunities in education are surfaced and regularly reviewed with regional
and sub management to ensure proactive support is provided where needed. If
desired, EdSG will work with the government vertical to put a similar process
in place for non-education deals.
2) Empowerment guidelines for subsidiary and regional pricing in education will
be put in place, similar to those in force in the Enterprise segment
3) When local management determines that local empowerment will not provide the
flexibility needed to win a deal, they will escalate to a regional response
team. An example of potential members of the regional response team:
* Regional Education Director (or Government Director in the case of a
non-Education deal)
* Regional Linux Competitive lead / Product Management
* Regional WWLP resource
* Regional LCA
4) The regional response team will engage with the local account team and the
customer to provide a full-integrated solutions sales effort, in order to
re-engineer what the customer sees as their needs so that they can understand
how the MS platform will uniquely address their needs.
5) EdSG will work with LCA to produce a consolidated view of all Microsoftâs
efforts in the academic space to ensure that customers understand the value of
what we have already provided and can provide in the future. This would
include initiatives by EdSG, LCA, MSR University Relations, Recruiting, CDDG,
Developer Evangelism, Product Marketing Group, etc.
6) If needed, the regional response team will work with the Regional VP to draw
upon the regional fund to provide additional value-add services and/or
products in order to
balance the investment the customer is making in the software (whether obtained
through a School or Campus Agreement or through OEM PCâs)
Services and products may include:
MS-CC-Sun 000001130304
HIGHLY CONFIDENTIAL
* Integration services
* Application Migration
* Training
* Curriculum content
* â
7) New PC sales will be made as usual from OEMs to entity, though we may add
some requirements on the OEMs as pre-requisite for participation in the
program (i.e., meet certain system specs for education, or meet education
specific training or channel needs)
8) It is recognized that there will be times when software donations are part
of the overall solution presented to a customer. In these instances we need to
work closely with LCA to ensure these are managed and tracked in order to
ensure that we receive the benefit and mitigate the impact on other deals. It
may also be appropriate to institute a process whereby the product group
funding provided through the special fund gets returned when donations are
made, as it represents monies that do not end up flowing back through the
product revenue stream.
EDGI diagram
Benefits
There are several benefits to implementing such a program. First and foremost,
it will enable more customers to obtain the benefit of using our technology.
Additionally, the following are expected benefits of the proposal:
MS-CC-Sun 000001130305
HIGHLY CONFIDENTIAL
* Increase our win percentage against competition
* Improve our partnership with governments
* Improve Microsoft image
* Protect our product price points by removing discounts below empowerment
guidelines
* Have a process that is reactive, but predictable and controllable
* Ensure optimum use of resources (current one-off negotiations
resource-intensive and painful)
* Centrally track use of resources enabling us to match both with business
value received, instead of suffering hard-to-track revenue erosion due to
one-off discounts.
Process
In order to ensure the most effective use of resources, it is proposed that we
leverage much of the framework used by the EASI program The process will be
largely duplicated and modified only where necessary to accommodate the
differences in the target customer markets The same fulfillment and
administrative vendor can be used, leveraging the known cost model.
Donations
It is recognized that there will still be a significant portion of these deals
where software donations may be appropriate as part of the overall offering.
The intention is not to limit a subsidiaries ability to do this, but to work
cooperatively with LCA to insure the customer and Microsoft both receive the
full benefit of the donation and that the donation is part of a larger
partnership with the customer and partners to create a self-sustaining
infrastructure. This will also help us track and recognize the investment we
are making world-wide.
Community Affairs
Community Affairs will continue to play a key role in large education and
government deals, especially in the developing countries. LCA has committed to
working with the business to define a set of offerings that will provide
end-to-end community development approaches and are responsible for the
related economic development issues. These offerings may be tactical in nature
and can be used as a component in a large negotiation, or may be a proactive
and comprehensive plan that we offer to those countries in greatest need.
It is important that we recognize the role of timing in providing community
affairs leadership. Presenting community development initiatives at the same
time as a response to a large deal can often be viewed negatively by our
customers. It is critical, therefore, that GMâs ensure that long-range
community affairs approaches are synchronized with the business needs in the
sub. This may also mean that we make community development offers that are not
contingent upon the customer making related purchase commitments. An exception
would be deals where we decide to donate a portion of the
MS-CC-Sun 000001130306
HIGHLY CONFIDENTIAL
licenses being purchased in lieu of discounting the overall price, thereby
preserving our unit price point and delivering the same overall cost to the
customer.
The proposed investment funds are therefore not targeted at community
development, but at ensuring we do not lose to low-cost/no-cost competitors.
If there are needs for broader free programs, these should still be identified
by the sub leadership and addressed with their LCA teams.
Qualification
One of the key issues raised during the solicitation of executive feedback is
the need to ensure that specific guidelines are put in place to ensure that
monies are used appropriately and this does not simply become another source
of BIF for the subs. In order to address these issues, the following is
proposed:
* Since each RVP will have a finite amount of funds, their use should be
prioritized at the regional level.
* Initially, top current and projected opportunities should be reviewed and
a prioritized list provided to the RVP by the regional education and
government teams Based on the size of this pipeline, it may be determined that
a portion of the fund should be left uncommitted for future opportunities
during the fiscal year. After this initial prioritization, emerging
opportunities will be compared to current opportunities to determine if they
meet the same standard for investment, with appropriate trade-off decisions
being made, if the funds are already fully committed.
* Opportunities will be divided between developed subs and developing subs
according to a pre-determined taxonomy. Developed subs will normally benefit
primarily from the consistent and streamlined sales approach of the response
team, while the developing subs will most likely need the investment funds in
order to be viable.
* Funds will be centrally tracked and reported (as in the EASI initiative),
providing a high degree of visibility (and therefore accountability) for the
funds usage.
Next Steps
[...]
Appendix
Recent Deals
* BRIC Project - China education PCs
* Czech (School Internet Project) - 25,000 PCs
* Saudi Arabia (King Abdul Aziz Univ) - 4,500 PCs
* Saudi Arabia (Presidentâs Girls School) - 25,000 PCs
* South Africa (Learning Bridge - education) - country-wide; EMEA proposal
for all low-GDP countries
* Pakistan- 50,000 PCs
* Other MENA (academic, east med) - 64,000 (?) PCs
* US K-12 Access Device- up to 1MM laptops
* Michigan (K-12) - $10MM state program funded
* Colombia government - 200K PCs over 3 years
Anatomy of a Deal
Name: Girls Schools in Saudi Arabia
Desktops: 20,000 (1200+ servers)
Revenue: $4MM (50% OEM)
Competitor Linux/StarOffice
Product Mix: Windows2000 Server, Windows 2000/XP Pro, Office XP Pro, Front Page
2002, VB 6.0
Microsoft Investments to win:
* Create special package including media and guidance
* Highlight customer accomplishments (shared PR)
* Commitment to invest in E-Ministry ($450,000)
o SE and two admin for a year (Contingent Staff)
o Train 220 FTEâs on Office Tools
o Initial implementation services
o Minimal application development
Story: The local team created a special 3 CD kit that included CDâs for Tools,
Teachers, and Students with appropriate content and products They also agreed
to fund a special ministry of education training pilot. This investment
($450k) was funded through the additional margin on the per desktop price.
Name: Hungary Higher Education
Desktops: 235,000 students, 18,000 teachers
Revenue: $2.2M over 3 years
Competitor. Linux/IBM
Product Mix: Windows XP, Office XP, Front Page, Visual Studio, BackOffice CAL
MS-CC-Sun 000001130309
HIGHLY CONFIDENTIAL
Microsoft Investments to win:
66% discount = $4 4MM off of normal Campus Agreement pricing
Story: In this deal, the total amount of the deal represented the maximum
amount of money that the customer had to spend. If we did not do the deal for
this price, then IBM was ready to execute. As a higher ed customer, there was
requisite technical knowledge to support a successful implementation, so
additional services were not imperative. The sub also had a successful
evangelism and knowledge transfer program in place with the technical
universities.
MS-CC-Sun 000001130310
HIGHLY CONFIDENTIAL
[...]
Education & Govt Incentive Program (EDGI) Proposal
Goal
- - Ensure primarily education (and secondarily government) customers can
experience the value of Windows, Office and other Microsoft products
- - Address affordability, application compatibility, teacher training and
curriculum, additional software and services needs
Opportunity
- - Increase our win percentage against competition in education and govt
accounts, especially in developing countries
- - Protect our product price points by removing discounts below empowerment
guidelines
- - Have a process that is reactive, but predictable and controllable
- - Ensure optimum use of resources (current one-off negotiations
resource-intensive and painful)
- - Centrally track use of resources and $$, enabling us to match both with
business value received, instead of suffering hard-to-track revenue erosion
due to one-off discounts.
Strategy
- - âEDGIâ- Education & Govt Incentive program, similar to âEA Services
Incentiveâ program
- - Proposed $50MM fund allocated to RVPs for discretionary use to win education
and government competitive deals (30:20 Windows:Office split)
- - Deal guidelines and escalation process being developed
- - Will address both developing and developed subs through same infrastructure,
but developing subs will be the emphasis and will also be targeted w/special
funding and partnership models (being developed with LCA)
Proposed Tactics
- - Setup a predictable pipeline process where opportunities that exceed local
empowerment are identified and escalated via regionally identified mgrs
- - Minimize OEM tracking/reporting complexities via program to enable educ or
govt entity to build solutions with MS products
- - Incentive program $ can be applied to qualified PC purchases or services
(training, curriculum development, app migration, etc)
- - New PC sales will be made as usual from OEMs to entity, though we may add
some requirements on the OEMs as pre-req for participation in the program
â i.e., meet certain system specs for education, or
meet education specific training or channel needs
- - Develop umbrella business value collateral on benefits of choosing a solution
built with Microsoft Windows (ie productivity, cost, ecosystem, etc)
MICROSOFT CONFIDENTIAL
9/12/2003 FOR INTERNAL USE ONLY
MS-CC-Sun 000001130320
HIGHLY CONFIDENTIAL
-----BEGIN PGP SIGNATURE-----
Version: GnuPG v1.4.9 (GNU/Linux)
iEYEARECAAYFAktGq8IACgkQU4xAY3RXLo4x0ACgnD5juo2zVeDds+XGCXDJ3wgW
UlAAoKDta/O6D56eEJUXZPAx9aAB772F
=QLQK
-----END PGP SIGNATURE-----
|
|
