Microsoft apologized to jurors for its past anticompetitive practices during opening statements Wednesday in a case alleging the company’s antitrust violations include word processing and spreadsheet software. “Yes, we acknowledge that and we apologize for it,” said David Tulchin, a Microsoft attorney. “The conduct involved competition that went over the line. The question for you is whether or not consumers were overcharged.“
Microsoft Apologizes For Previous Anticompetitive Acts
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Dosen’t that defeat microsoft’s previous defense of not being anticompetetive? I don’t feel that windows is too expensive. I think Window 2003 is though.
Like an “I am sorry.” is suppossed to make up for things they did and continue to do ? I would take their apology serious only if stopped FUDing OSS and GPL folks along with cleaning up their act and how they do things for a while.
…”OK, we’re very sorry for crushing the competition in any field we venture in” – that means they’re pardoned? They are sorry but still they follow the same strategy, it’s not like they are changing their anti-competitive model.
I sure hope someone has the guts to fine them big time for it all, and make them modify windows where it hurts most.
Will it be the EU? Can we have faith that the US DOJ will wake up again to Microsoft’s practices if Bush doesn’t win again?
This story is about overcharging for their software, which they had a monopoly in. What Microsoft is saying is that just because they have a monopoly in the area does not automatically mean that they overcharged for their software. They are NOT trying to make right with you, open source, or any other person/entity on the planet.
Tim: Win2k3 is by far the best version of Windows to date and it costs the same as Win2000 Servers, how does it cost too much?
I am not a (an?) American but I do believe Microsoft pricing is way over the top. Here in South Africa I pay at least twice as much in general for a Microsoft Game Studio game than a game from another game software house. Is it because Microsoft ‘s software is magnitudes better than anyone else’s or maybe they need to charge that much because it takes a lot to feed the giant beast?
I just wondered it is were possible to get most of their Chief Officers tied up in long legal cases? Wouldn’t that hurt their company in some way? All in all, people should not ever stop targetting Microsoft and hold them to their promises. One might wonder how much their legal fees amount to in a year… My guess is that it would be enough money to run a small country
I’m not concerned with Microsoft prices now that there is some competition out there like Linux and BSD, but I was more concered about the influence Microsoft had over the industry because they had a Monopoly and it was closed source, so they had total control and influence. Well I stepped away from this computer industry already and just focus on scientific computing, but it’s amazing how before I started with computers at all I thought that Microsoft was a great company, but after I had some experience with the industry that point of view changed.
There’s a part of me that things that people deserve Microsoft, and they deserve to be locked in and abused. People do not make intelligent choices and they should take some of the blame for their own ignorance. I’m not just talking about end users, but also Microsoft developers, because they are end users too. I have no further comment.
The same part of me thinks that some people deserve Linux, lol.
To the question if they overcharged customers, their $50 billion cash reserve should give a clear answer. That’s ten dollars per person, worldwide, or in the range of $100 per sale.
If they want to apologise, they could start by decimating their customer OS price.
Or how about a $10 billion fund for open source development?
“Tim: Win2k3 is by far the best version of Windows to date and it costs the same as Win2000 Servers, how does it cost too much?”
???! Ever ask yourself, why MS makes so much profit?
They overcharge their OS and Office to fund their losses in other areas (XBox, MSN, etc.) where MS is trying to get a foothold.
Only looking at Office and the OS, MS could be profitable with prices as low as $50. So obviously, the customer is being ripped off.
But as someone else already stated – some people really deserve being locked in and abused. Too bad, the negative side of MS’s market power also affects customers trying to avoiding products of this company .. 🙁
“Yes, we acknowledge that and we apologize for it, but we don’t regret it and will do it again! Ooops, did I just say that out loud?”
Where is Darth Vader when you need him to choke people?
How can they ask if their software is overpriced, when they have around 80% to 90% on the software they sell?
This gives then for each 100 US$ they get, around 80 US$ to 90 US$ income. This is crazy!
I don’t have any problem with them, having such an cashcow. But 80% to 90% is sure not normal in this market.
And all of those ppl who write that OSS is free and that Windows is to expensive if you compare it to OSS:
Of course Windows is expensive, compared to free software. But this is not the question. Don’t mix up things, in this case. OSS only means, that the source is open. It does not mean that the software has to be free (it can be free, but does not have to).
Anyway… I whish that the judge has some statistical information, how much the average win is in the software market (not the OSS market) and then forces Microsoft to adjust their pricing (if the average is less then 80% to 90%).
This makes me sick… After all they have done they want to say… have you payed too much of OUR product!!! no… it’s What are you missing because we killed everything else that had a chance at innovation!!!
… if Microsoft would lower the prices of all their softwares… WHO would then want to go OSS or buy something from competitors? Think about it, what would be more crushing than that? Competitors don’t have _this_ luxury of being able to lower software prices. Microsoft high prices is what keep the competition around, else, MS would be all alone.
By lowering prices, I mean like buying Windows XP Pro at $40, now that would be killer.
After some thinking, I begin to think that Microsoft DOES write software better than the competition. F.ex, compare MSOffice vs. OpenOffice? The Msft’s product is WAY better, if not Microsoft we would still be using old, primitive wordprocessors or spreedsheets.
In some instances yes, but in Office, for example, there are certain functions which are wrongly implemented. Excel is definitely not as good as Gnumeric when it comes to some statistical functions. Its accuracy is also suspect in places. MS has billions of dollars to throw at a product, which will make it at least some good. Imagine if Apple made an Office suite.
The thing is that with all their bundling deals and other anticompetitive practices, Microsoft has been able to limit the money available to the competition to create good products. Who wants to spend a billion dollars on making a good office suite when you are not sure you will get that money back. In contrast, Microsoft spent a billion dollars on promoting Windows XP alone. Its a knock on effect. The ocmptetion do wither and die after a while. But I also blame them.
For example, I believe Corel Wordperfect Office is a good product. However, they are not aggressive enough in pushing it, and its way too expensive. I know Microsoft would probably retaliate if they dropped prices too much, but it seems with their customer base seemingly shrinking by the day, they could do no worse.
Pit: “They overcharge their OS and Office to fund their losses in other areas (XBox, MSN, etc.) where MS is trying to get a foothold.
Only looking at Office and the OS, MS could be profitable with prices as low as $50. So obviously, the customer is being ripped off. ”
Pit, there are other companies that do the same. For example, the health industries have, like you said, to overcharge some products to support others, and some times others that never make the market. But still have some R&D involved in the cost and need to be funded. So, when yo see a pill costing $40+, remember the cost behind the company, not the pill. Returing to the article, is nice to se MS change practices under presure and let’s hope it keeps changing. MS have nice products, but pricing and business practices are not so nice. So, let’s see how it keeps going…
” Only looking at Office and the OS, MS could be profitable with prices as low as $50. So obviously, the customer is being ripped off. ”
That’s purely subjective. Value is subjective. The amount of profit they make is neither your business nor your concern, unless they harm you directly.
Please, government, please save us from the Microsoft beast! We know you’ve failed at pretty much everything else, but we place our faith in you for this!
Grow up.
Mike: You need to take some economics courses, badly.
After some thinking, I begin to think that Microsoft DOES write software better than the competition. F.ex, compare MSOffice vs. OpenOffice? The Msft’s product is WAY better, if not Microsoft we would still be using old, primitive wordprocessors or spreedsheets.
See, the reason that OpenOffice is the competition is that Microsoft killed off Lotus, WordPerfect, etc… Some of those casualties were created fairly, others unfairly. OpenOffice is the competition because it’s virtually impossible to stay in business selling a competitor to Microsoft Office.
Of course Microsoft overcharges. Windows costs $199 in the U.S., or $40 in Thailand. For years we paid $300 for Word alone, but later it was bundled with other software (not Office) for $99. You can pay over $400 for Office, or $150 if you call yourself a student. The question isn’t so much what does Microsoft charge, but ‘How much have you got?’.
…but during the DoJ trail, I believe the DoJ had experts testify that Microsoft should be charging no more than $50.00 for their low end OS and no more than $100 for the high-end OS product, based on accepted economic trends of historical OS pricing and shelf software pricing models. They then looked at development costs and agreed that they could still be making money even if they priced at much thinner margins because they have such huge volumes.
So, here’s the anwer for you. Is Microsoft charging more than $50 for XP Home? Are they charging more than $100 for XP Professional? If the answer is yes, then according to accepted economics standards, anyone that purchased it were royally screwed and raped by Microsoft.
Not exactly a surprise.
made by DV…
but I think you forgot some factors there. If it were not for the drug companies blended pricing, some medications would cost thousands per dose. On the other hand, some of their meds, should cost a dollar for a whole bottle. Averaging the costs allow people to purchase some medications, which would otherwise be impossible, even with insurance. On the other hand, they are allowed to stick it to us on other, high volume, readily available, very low cost drugs. The public accepts this because 1, we are often talking about a human life, and 2, in many cases, drug companies would not be able to afford to create new drugs without such a pricing model. Microsoft can’t be compared in the least. Sure, they might blend their pricing as they are under one roof (OS and apps), however, everything I’ve seen says they blend their pricing so that they are more readily hide the fact that they are raping you on BOTH ends rather than raping on one end to take a large hit on the other. Again, like I said, the situations are completely different.
When I can pay $150 for XP Professional and Office Professional for $150, at a retail store, then you *might* have a valid point.
Of course Microsoft overcharges. Windows costs $199 in the U.S., or $40 in Thailand. For years we paid $300 for Word alone, but later it was bundled with other software (not Office) for $99. You can pay over $400 for Office, or $150 if you call yourself a student. The question isn’t so much what does Microsoft charge, but ‘How much have you got?’.
Comments like these make it obvious that someone didn’t bother reading the article. The prices in question aren’t retail prices, as they state the charge for Windows in question is $50, not the $200 for the full retail version (or $100 for the retail upgrade). They also point out specifically that prices on Office have dropped.
As for academic pricing, would you rather see Microsoft reduce their discounts for academic licenses? How many students are going to bother paying $200 for Office 2003 when they can ask around the dorm and get Office 2000 (the last version without product activation) for the price of a blank CD? On the other hand, most recent Office licenses allow for each individual to install Office on a “home” or “mobile” PC as well as their “office” PC, reducing the need for most individuals to buy Office for their home and office PCs individually. On the other hand, if all you use is Word, it’s going to cost more than the division of Office’s price by the number of products in Office, in part because they sell more copies of Office than they do of Word.
Again, though, they’re not discussing retail prices. Without a link to the court transcripts, I really can’t say what they’re talking about, except that they quoted a specific price for Windows that we do not see by going down to the local stores.
…and you’ll find that special OEM pricing should obviously be LESS than $50.00. I guess I don’t understand you are in such a hurry to ignore it. If retail should cost no more than $50.00, then volume EOM pricing should be something like $20-$30 per unit.
This isn’t rocket science folks. If I’m negotiating a volume deal for anything and I’m paying retail prices, either I’m an idiot, I’m being raped, or both.
// Excel is definitely not as good as Gnumeric when it comes to some statistical functions. Its accuracy is also suspect in places. //
Examples? Proof?
Oh boy…
I’m not the guy that originally posted on the subject, but I think you’ll find that many people can’t use Excel because of precision errors. IIRC, in some cases, Microsoft decided to trade speed for accuracy. In others, they just traded accuracy for some unknown quantum.
Since I’m not the original poster, I don’t have articles or tests to point you at, however, I have read for years people complaining about MS Excel’s crappy accuracy. Especially so for very large numbers.
In case the other poster doesn’t come back, I recommend you check out google. I’m betting you won’t have much trouble finding articles/complaints.
Microsoft can’t be compared in the least. Sure, they might blend their pricing as they are under one roof (OS and apps), however, everything I’ve seen says they blend their pricing so that they are more readily hide the fact that they are raping you on BOTH ends rather than raping on one end to take a large hit on the other. Again, like I said, the situations are completely different.
You’re ignoring the fact that MS doesn’t just create an OS and Office. It’s hard to argue that MS’ pricing couldn’t be lower with the amount of money they have, but they do have a number of business units that operate at a loss, and they do have a research arm that operates independently of the retail/development arm (though they do occasionally develop things that other parts of MS find useful). They combined their server with their developer tools (in terms of how profits/losses are reported) to squeeze out roughly 1/4 the profit of either the client OS or the Office software (Information Worker) division. Despite Windows costing less than Office, it made more money (almost as much as combining “Information Worker” and “Server and Tools”) simply by selling significantly higher numbers. MSN normally hasn’t made a profit, but apparently it has recently, either due to restructuring or better sales (or both), but is the last profiting arm of Microsoft. They are losing money in the Embedded market, entertainment (XBox and games), and “Business Solutions” (which includes most of their recently acquired e-commerce and financial software aimed at large business use, probably with a lot of services and configuration rolled in).
People keep talking about how the future of computing isn’t in the desktop, but in convergence and new devices and so on. These are the markets Microsoft is losing money in, and Microsoft has been touting the move to mobile computing and entertainment convergence as much as anyone else. None of this, though, is the point of the case MS is defending against. They’re simply trying to determine whether or not MS overcharged a certain segment of the market, and without any real information on the class bringing this suit, it’s hard to say whether or not they really have a case. It’s certainly not against the law to use profits from one business sector to fund losses in another, if the prices being charged in both sectors are within the range of normal competition. Microsoft wasn’t the one to set the prices in any of the businesses in which it is currently taking a loss.
http://support.microsoft.com/default.aspx?scid=kb;EN-US;78113
Given that it’s a Microsoft site, it’s not comparing itself to other applications. However, it does go into some detail as to how and why Excel may be inaccurate for certain calculations, especially with very large or very small numbers and numbers with very long decimal values.
…and you’ll find that special OEM pricing should obviously be LESS than $50.00. I guess I don’t understand you are in such a hurry to ignore it. If retail should cost no more than $50.00, then volume EOM pricing should be something like $20-$30 per unit.
Here’s a quick question, though: where, in the DoJ antitrust trial, did they address consumer pricing at all? The whole case was regarding OEM and ISV deals, competition with other software vendors, license violations with other large corporations (IBM, Sun), and so on.
This isn’t rocket science folks. If I’m negotiating a volume deal for anything and I’m paying retail prices, either I’m an idiot, I’m being raped, or both.
One problem there: the DoJ settlement doesn’t allow negotiation for Microsoft’s pricing. Every OEM has to pay the same price for MS’ software, tiered by volume at the same rates for every OEM. This is why there were so many complaints from companies like Sony after the settlement was announced, because some companies had already negotiated better deals with Microsoft than they got under the settlement agreement, due to exchanges in other areas (for instance Sony or IBM could give MS licenses for certain IP to reduce their Windows license costs, but now that’s not permitted).
….obviously, you don’t understand how whacky that logic is or you wouldn’t of posted.
They are leveraging their monopoly position to enter into loss markets so that they can, in turn, force others out of the market once they establish a foot hold. Entering a loss market is not good for any business. The only reason they can do so is because they are raping us left and right. They enter the loss market in hopes of future chances to rape us, in turn, allowing their monopoly to continue.
You also completely ignore the fact that the amount of money they have has ZERO to do with their current pricing. Their current pricing is based on the assumption that people have no choice but to pay what they insist you pay. Period. The price they charge would only cause their reservce to shrink, not disappear. The fact that people don’t have an option is the reason they have the kind of cash reserves they do. If they were to lower their pricing to what they should be charging, they would not only still be profitiable, but they could still enter into loss markets. Just the same, even without their huge cash reserve, they would then be forced to COMPETE in those loss markets or withdraw, just as any other competative company must do. As is, they can enter into any number of loss markets without a worry because they have two things going for them. One, an illegal monopoly which the government has refused to address, in spite of the fact that they have historical precident established [IBM] on how to deal with them. And two, illegal pricing to help future proof their monopolies in what are current loss markets.
As for your research comments, that’s laughable. MS has a huge R&D budget but they do little actual research. If they were doing real research, you’d see innovation. There is none coming from Microsoft. There hasn’t been…ever. Even still, given the prices that they should be charging, there would be plenty of money for them to do actual research, should they decide to actually do any.
So, by in large, most of your comment can be completely ignored.
I personally feel that Microsoft does over charge in some areas of their products. Right now I think their Operating System is charged fairly, maybe a little higher then it should. I mean isn’t Windows XP Professional like 190 bucks, compared to Apples latest OS 10.3 which was like 129 bucks (at least where I live). I think that price is just, but not close to the rest of the market for that operating systems.
The big thing I have is Microsoft Office, that suite is expensive. They have been dropping the price for it, but it’s still out of control. The only real beef I have with Office is the Windows version is around 200 to 300 dollars. Compared to the Apple version of Office which is like 500 bucks! Anybody see a difference here? I realize the Apple Office doesn’t have the customer base as Windows Office, but my god that’s a BIG difference. And let me remind Microsoft, NOT EVERYONE IS A STUDENT!
Can you believe that! If your a student you can get software for HALF the price. Now they are either losing a large amount of money offering their software that cheap (which originally retailed much higher), or that’s the actual price the software should be at.
All I know is, Microsoft and the rest of the industry do make software a little bit expensive then it should be.
Here’s a quick question, though: where, in the DoJ antitrust trial, did they address consumer pricing at all? The whole case was regarding OEM and ISV deals, competition with other software vendors, license violations with other large corporations (IBM, Sun), and so on.
Yes, because if you can establish retail pricing, which has tons of supporting information available, you can better determine EOM pricing. I believe I even stated this above. If you are paying more than retail for a volume EOM deal, you’re being screwed. Is this really that hard to figure out? Shesh. Come on already.
The rest of your statement can be ignored because it’s just plain silly. The point remains. If you are paing retail or more than retail pricing for a volume deal, you’re being screwed. Why is that so dang hard to get into your head??? Also notice that I used a generalized reference, on purpose, to highlight the stupidity of it all. Ignore common sense all you want, it doesn’t change that you have to be pretty foolish to not understand how retail pricing plays a role here.
I personally think these cases are ridiculous. The rising cost of gasoline in this country, now that’s a real issue (and unlike choosing what software we can purchase, we don’t really have a choice w/ petrol now do we?). Price fixing amongst the utility companies <– another real issue. There are plenty of cases where we don’t have much control over what we pay for a service/product. Software is not one of these cases. My question is this; who’s to say whom paid too much for software? The pricetag was visible, monies exchanged hands, end of transaction. I’m sick and tired of hearing about this crap after the fact. CAVEAT EMPTOR
I think you make some excellent points. Just the same, you have to balance the volumes. Apple has, what, 1-2% of the desktop market? Anyone care to confirm that number? If they charge $129.00 for an awesome, and innovative OS, which targets sales 1-2% of Microsoft’s, what does that tell you Microsoft’s OS pricing should be? That’s right, it should easily be a small percentage of what Apple charges.
Some quick ‘n fun BS-fun numbers:
If apply has 1,000,000 customers and it cost them $10,000,000 to develope, that means they could sale it for $10.00 and break even. If Microsoft has 98,000,000 customers, and it cost them $20,000,000 to develope, that means that they can charge $0.20 per copy and break even. Obviously, these numbers are overly simplistic and complete BS, however, they do help highlight just how much MS is raping the world. In otherwords, even at $50 per retail copy, MS would be very profitable.
this is american business (really all business) at its finest. Amorality reigns.
What will we hear next? “We’re sorry but linux was hard to stop so we had to start using violence but we didn’t overcharge.” I know this sounds over the top but MS has shown no limits on how far they will go to control the market. I doubt they’d resort to violence but how far will they go.
This is not the way to run a world. I think we (the US) need a permanent amendment to the constitution to limit the influence of coporations. The EU should follow. We also need to make political contributions by corporations illegal. The workers in the those companies are already represented. Double representation is not fair and what we have now is essentially a system of bribes and corruption.
net: go EU…punish MS.
1) They use Floating Point numbers. Hint: its not just very large or very small numbers; .47 can’t be represented as a FP number (this goes for any multiple of 10 also; thus, 4.7 and 47 are also non-existant). The normal practice is to use something like .46999999999999999 which is then displayed rounded to .47; however, this causes problems when doing math on the fields. Example: .47 * 101,010,101,010,101.00 gives 47,474,747,474,747.50 which should be 474,747,474,747,47.00 and thus Excel’s answer is .50 off.
2) They claim to support matix math but don’t know how to do it. Example: [ 1 1 | 1 1 ] x [ 1 1 | 1 1 ] = [ 1 2 | 2 1 ]; this is a very well know math problem however Excel gives the product as [ 1 1 | 1 1 ] which is just wrong. Even my little pocket calculator can do matix math better.
@Harky: “if Microsoft would lower the prices of all their softwares… WHO would then want to go OSS”
Don’t forget, that this will result in lower earnings and hence lower R&D. Furthermore MS than has to decide if it’s really worth going for other markets than software (i. e. if it’s really a good idea to sell XBoxes for less than the product cost..)
I’m pretty sure that MS will lower their price as soon as their earnings will start to fall. They already did this in some cases (e. g. Munich)
@Adek336: “if not Microsoft we would still be using old, primitive wordprocessors or spreedsheets.”
I’m pretty sure this is wrong. Their would be more competition and better products. Compare the situation with IE which has fallen way behind without any big competitor.
@DV: “there are other companies that do the same.”
I know. But the situation is quit different. They 1. do not have a monopoly and 2. do not use earnings to enter new markets (or do you know a health care company selling Gameboys?)
@Mike: As “Anonymous” already stated: You need to take some economics courses, badly.
“The amount of profit they make is neither your business nor your concern, unless they harm you directly.”
They do:
1. They overcharge for their products.
2. They reduce competition to zero giving the customer the choice of MS or noting.
3. With their monopoly tax money, the kill competition in markets which harms customers in general e. g. how many companies do you know which can operate at a loss (i. e. smart phones, Xbox, et.c) for years to kill competitors and possibly superior products out of any market?
“Please, government, please save us from the Microsoft beast!”
Believe it or not: this is exactly the duty of a government. If a free markets leads to a monopoly, only government has enough power to fuel competition in a reasonable time – and to the benefit of it’s citizens..
“Grow up.”
I’m older than you.
“We’re sorry but linux was hard to stop so we had to start using violence but we didn’t overcharge.”
That’s sounds like the same logic used to explain some of the creative campaign financing in the Clinton/Gore reelection. If you follow the double representation argument you’d also have to eliminate contributions by PACs, unions, public interest groups, social activist groups, FOSS, etc. Politicians will never vote for an ammendment that would cut off a big supply of campaign donations. Show me a politician who’s not corrupt and I’ll show you a someone who’s not in office.
The best way to deal with companies like MS is to stop buying their products, and their stock.
Photoshop is what…$600-$700? If you’re a professional that needs Photoshop, you can afford to make the investment. Office (non-OEM) tops out at about $500 last time I checked. My point is the only people that have a real need for a professional tool like PS or Office can already afford it. Tools or software that are used in commercial environments cost a lot because they’re going to be used to make money. It’s the same reason a business telephone line costs more than a residential one. Non-commercial, home users should stick to progs like GIMP, Wordperfect Office, MS/Apple Works, etc. A co-worker of mine bought a home computer and settled for MS Office Basic, which is a less expensive version of MS Office that excludes some stuff he won’t need for a home computer.
I’m no MS-fanboy either…can’t wait to get my check for the BeOS settlement in fact!
” If you follow the double representation argument you’d also have to eliminate contributions by PACs, unions, public interest groups, social activist groups, FOSS, etc.”
yes and that would be a good thing. It would mean politicians would have to focus on the actual voters.
“The best way to deal with companies like MS is to stop buying their products, and their stock.”
I am confident that the market will evolve a solution to MS. Its called linux and open source. However, limits on MS’s behavior and/or punishment for their behavior when they go beyond the norms of our society are valid.
the MS fans want no law when it applies to MS’s deeds (anything goes) but they and MS want law enforced when it suits them. You can’t have it both ways.
for example, MS is using the legal system to sue linux through SCO. MS relies on the courts for enforcement of contracts with customers, suppliers, and employees (non-competes). MS lies on the law to protect MS from traditional crime and piracy. MS relies on the US government to represent MS in trade disputes with foreign nations (when MS does not get its way). MS relies on the rule of law to maintain an orderly society (lack of rampant crime) to enable it to do business. the examples are endless. busines needs laws.
If they want a “free market society” to behave as they do then they might be surprised with what they get. Of course that is not what they want. They just don’t feel laws should apply to them when they are not beneficial to them.
Sorry pc fan boys you can’t have it both ways.
Appearantly MSFT lawyers aren’t so good.
Could microsoft have violated the conditions of the Be Inc settlement “We acknowledge no wrongdoing”.
competition is a lot more than “it’s called linux”… btw.
In a free market society in which MS lives, they can charge what they like. You can buy it or not. If they did it in a monopoly situation, that is slightly diferent, but only slightly. Don’t like the way they do busines? There really are viable alternatives. I sintalled Linux as a desktop years ago to see if it realyl was viable. I have not purchased a MS product since.
Anybody who claims they really have no desktop competition have never *truly* used the competition. Borrow a MAC for a month, Run a Linux LiveCD on your PC without even installing to preserve your precious Windoes PC for a month. 80% of the population usign computers would never miss Windows, Office, or even Internet Explorer. .. or just continue to complain. It’s your call.
While we are at it, let’s make sure that everyone understands that OSS, or “Free Software” is free as in “freedom of speech”. It does NOT reflect cost. It reflects yoru ability to modify code to suit your needs. Not the needs of a marketing team.
You know, I have to agree with jayson knight. Maybe ms charged too much or maybe they didn’t. But in the end does it really matter? Come on now, there are a lot worse things happening in the world that affect you even more strongly. A few hundred dollars (in the US). Do you really get that upset over a purchase that some of you don’t even make?
You know, if you want to accuse microsoft of crazy prices, why don’t you look at some other companies like adobe?
“They just don’t feel laws should apply to them when they are not beneficial to them.”
That’s exactly correct. A free market system requires that the rule of law must always prevail. But with politicians readily for sale, new laws can always be purchased. MS should be punished for their behavior. And it must be something more serious than a minor depletion of their cash reserves.
“I don’t feel that windows is too expensive”
Are you kidding I can get SuSe 9.0 pro for less than WinXP home.
Windows is way too cheap. They should charge much more for it.Everyone knows that only rich people can afford computers. As a matter of fact Microsoft should charge $20 just for the security patches. It is the consumer’s fault if they get a virus so why should MS give these patches away for free. Windows Media Player is worth at least $39.99 by itself. Because then Microsoft will wither and die all the faster.
My ass you aren’t
I will simply defer to all of my historical posts here and on /. wrt your comment. Please pack it in dry ice 😉
Seriously, I tend to take a very pragmatic view of MS. They have done a lot of damage to the advancement of alternative operating systems (ie. BeOS) by crippling the free market with restrictive OEM contracts (esp. the dual-boot issue). Those are the issues worth fighting for. My point was that when it comes to the price of MS Office, which is geared toward commercial environments, its price seems right in line with other pro packages geared toward commercial environments. In my office, Office is actually the cheapest software package we have…you don’t want to know what something like “Bloomberg Professional” costs!
MSFT’s apology can be translated into:
“We feel really bad about what we did. We’ll have to live with the guilt for the rest of our lives. Isn’t that punishment enough?”
Only looking at Office and the OS, MS could be profitable with prices as low as $50. So obviously, the customer is being ripped off.
I guess if MS Windows cost should cost like $50, an OS like Zeta should cost like 2$???
Maybe you even should get paid to install Linux…
One sign of a monopoly is that the monopoly in question can ask more for their profuct without losing market, or without losing any significant market.
In a healthy market, the company in question will relatively sell less because consumers will chose an alternative.
What i find funny is thar Microsoft denies this, while they agree on the other point of the overal monopoly.
Well, with secret OEM deals against BeOS you kinda accomplish a higher price for your own monopoly product. The same is true for embrace & extend.
The question is which amount of money is fair so that they’ll never do it again. It has gotta be much, and it has gotta be more than fair for the past years with a too high, unethical, illegal market share.
Finally, this also brings forth: “we’ve been wrong and we won’t do it anymore”. I take that rather as “we’ve been wrong and we will chose more stealth methods” but then again i’m cynical regarding this. I hope they’ll surprise me and will directly compete! They have the money.
They are leveraging their monopoly position to enter into loss markets so that they can, in turn, force others out of the market once they establish a foot hold. Entering a loss market is not good for any business. The only reason they can do so is because they are raping us left and right. They enter the loss market in hopes of future chances to rape us, in turn, allowing their monopoly to continue.
Entering new markets is not an illegal practice for a monopoly. Using money gained from monopolized markets is also not illegal. What is illegal is to leverage the existing (monopolized) product in a way that makes your product in the new market indespensible. Prices for comparable products are rarely far off of the prices for the Microsoft products in those markets where they are “raping us”, except in the cases where the competing product is free of charge. In those areas where they are losing money, their products are often the same price as competitors, primarily because the competitors (and the losses anyone is willing to take) tend to set the prices.
Beyond that, these markets aren’t widely considered loss markets, they’re simply markets in which Microsoft is losing money. In most cases their losses have been reduced if they’ve gained market share, but in some cases they’ve met with major competition (ie entertainment (XBox & games), ISP services, handhelds, smartphones, etc), and it takes them quite some time to gain even a foothold in the market.
You also completely ignore the fact that the amount of money they have has ZERO to do with their current pricing. Their current pricing is based on the assumption that people have no choice but to pay what they insist you pay. Period. The price they charge would only cause their reservce to shrink, not disappear. The fact that people don’t have an option is the reason they have the kind of cash reserves they do.
Cash reserves have a tendency, in a public corporation, to require maintenance. Shrinking cash reserves are viewed as a bad thing by investors when you’re a company that has a history of building such reserves. If their current pricing is based on the assumption that people have no choice to pay what MS insists they pay, why is it not higher? Why is it that similar commercial products are priced at similar levels?
If they were to lower their pricing to what they should be charging, they would not only still be profitiable, but they could still enter into loss markets. Just the same, even without their huge cash reserve, they would then be forced to COMPETE in those loss markets or withdraw, just as any other competative company must do.
These are mostly new markets in which most of the competitors operated at a loss for years before Microsoft even entered the market, and in which much of the competition built their way out of those losses, and in many cases have secured market shares that almost make Microsoft look timid. Microsoft operates at a loss in an area where 2 corporations (Sony and Nintendo) support their entire welfare on the profits of the business, simply because MS didn’t understand the market properly before they entered. The same can be said in most of these other areas: someone else cornered the market some time ago, MS didn’t understand the market when they entered it (and is losing money primarily for that reason), but over time they have learned more about the market and are trying to adapt. 15 years ago no one would ever have thought that Sony’s most profitable business would be game consoles, everyone knew Nintendo was the reigning king, and if Nintendo ever lost it would be to Sega. My girlfriend has a Palm or “Palm-Pilot”, even though it’s made by HP and runs an MS OS. Her brother and father are on AOL, and who would’ve thought 15 years ago that AOL would buy up Time Warner (though now they’re in a bit of turmoil over which devision really runs the show)? My ISP is my cable company, yet MS is still trying to compete for that space. People don’t always withdraw from a market just because they’re not profiting on the market. Sometimes they see something on the horizon that smells like cash and keep going for it until people stop investing in them.
As is, they can enter into any number of loss markets without a worry because they have two things going for them. One, an illegal monopoly which the government has refused to address, in spite of the fact that they have historical precident established [IBM] on how to deal with them. And two, illegal pricing to help future proof their monopolies in what are current loss markets.
The government tried to address the monopoly, and the lawyers and the judge that originally ruled on the case botched it badly, after years of work. Even if they start again today with a new case at the federal level (instead of state and class suits like these), it will be years before they can finish building another case against them. Illegal pricing is precisely what is trying to be proven in this case, and the DoJ settlement has already set hedges against that to leave Microsoft open to quick penalties if they modify OEM pricing in ways outside the scope of that agreement.
As for your research comments, that’s laughable. MS has a huge R&D budget but they do little actual research. If they were doing real research, you’d see innovation. There is none coming from Microsoft. There hasn’t been…ever. Even still, given the prices that they should be charging, there would be plenty of money for them to do actual research, should they decide to actually do any.
You’re confusing things in this area. What I’m talking about is the Microsoft Research division, which isn’t an R&D house (the research in R&D is not seperable from the development). The pure research environment that they claim to be working on with MS Research doesn’t generally fit well with an R&D department, as the R&D department would have to do further research to see how a pure research project fits into development of existing or future products. Beyond that, I’ll leave it to you to look around the MS Research site for their explanations of what has been contributed to Windows and Office from work done at MS Research. I think it’s far more interesting to look at the things that haven’t made their way to shipping products, just as it is when anyone outside of Microsoft publishes research papers in computer science and related fields.
Lowering prices won’t solve anything. It’s not just the expense that people object to, tho that’s part of it. It’s how Microsoft seems to stifle competition in the way that they do business. On basis of principle, I will never buy another Microsoft product, no matter how cheap they may become. I even go out of my way not to, like supporting Logitec for input devices, etc.
That’s exactly correct. A free market system requires that the rule of law must always prevail.
Are you kidding? A free market system requires that law does not touch or affect the market, hence why a free market system does not exist in most civilized parts of the world (because a pure profit motive almost always undermines the stability of the market and eventually undermines the government itself). When the government imposes taxes and tarrifs on the market and it’s products, furthermore when they start imposing anti-trust legislation on the market’s participants, the market is no longer free.
We have a government regulated capitalist economy simply because no one has yet figured out a better way to do it. In a free market the consumers are regularly screwed because the government has no control over the actions of the producers; in a common socialist market the government controls the market to such a degree that the deficiencies and corruption of power in the government leaves the consumers regularly screwed because there is no reward for work and no incentive for the government to loosen the very controls that give them power. These are very definitely the two extreme cases, but they serve as the example for why most of the world’s governments have chosen to stay somewhere in between. Unfortunately, people have an easier time understanding things in black & white, so these systems are often simplified to best suit the needs of the person explaining them (as I may have done myself).
“Are you kidding? A free market system requires that law does not touch or affect the market, hence why a free market system does not exist in most civilized parts of the world.”
IMHO a market dominated by monopolies is also no longer free. A market is only free as long as the basic laws of supply and demand hold. When a company gains a monopoly and starts to dictate what goods will be produced and the price of those goods, the consumers get screwed. Similarly, if a company can employ unfair/anticompetitive business practices to drive competitors out of the market segment and prevent other companies from entering the market, the market is also no longer free. In those cases it’s the duty of the appropriate governmental entities to pass and enforce laws so the market remains free. This is where my rule of law comment comes in. If the laws set up to govern businesses are not enforced it can lead to a condition where the actions of a company in one market segment adversely affects the entire market. Remember the rationale of the Standard Oil breakup? The ability to set whatever price they wanted for oil products was great for Standard and its investors, but bad for the overall economy. Unfortunately it gets cloudy when the companies are allowed to make large political contributions to people writing regulatory legislation. The same holds true when governments see the businesses as nothing more than taxable entities. The real trick is finding the point at which the level of regulation is just enough to keep the company honest without causing detrimental effects on the company, consumer and the market as a whole.
” A free market system requires that law does not touch or affect the market”
um….no. The idea by mr adam smith who coined the term “free market” is that competition is supposed to regulate the market instead of government. That is not a lack of law and certainly not a lack of laws in the broadest sense in society. You are referring to pure anarchy not a free market.
“In a free market the consumers are regularly screwed because the government has no control over the actions of the producers;”
again no.. The theory is that competition would regulate the market and make it most efficient, as opposed to gov intervention. That mechanism (competition) would result in the greatest benefits to the consumer.
” in a common socialist market the government controls the market to such a degree that the deficiencies and corruption of power in the government leaves the consumers regularly screwed because there is no reward for work and no incentive for the government to loosen the very controls that give them power.”
you are watching too much fox news. In a totally state run government (which generally only happens in communist or totalitarian societies) all industry may or may not be owned by gov. Most implementations of “socialism” have not been so….just look at western europe.
The US condition is a textbook perfect example of facism. Government and industry are one. The problem is not that government is controlling industry and screwing up. The problem is that industry controls government and through this control industry creates a mechanism to supress competition and it damages the consumer.
Well shit! That changes EVERYTHING!!! >:P
“If they want a “free market society” to behave as they do then they might be surprised with what they get. Of course that is not what they want. They just don’t feel laws should apply to them when they are not beneficial to them.”
Great post! Thank you! Exactly my point when i discuss the “free market”. The “free market” in the USA seems to me rather minarchist. It _has_ regulators. But if you want regulations on customers (buyers), you should have regulations over companies (sellers) too.
Copyright, patents, and such are all methods but those who claim ie. Europe isn’t a free market while ie. the USA is have a big plate before their head because the US government for sure regulates the market. It is hard to say which one is more free (for example Europe doesn’t have software patents) and i don’t know which one is, but none is entirely free.
Ofcourse this whole argument can also be taken to “free society”; when the government regulates the people it is less free.
Also see this great entry of Wikipedia: http://en.wikipedia.org/wiki/Free_market
I’d rather live in this free market/free society but alas, we live in these current societies. When it turns out against you while previously you’ve used to before you (MS has; copyright, patents, etc), don’t whine.
Sorry doesn’t pay the bill, never did, never will… Do they really think that “sorry” will wash everything away like a sponge?
Yeah, welcome to Microsoft SpongeB0B 2004