In-Reply-To: 
Message-ID: 
MIME-Version: 1.0
Content-Type: TEXT/PLAIN; charset=US-ASCII


On Fri, 2 Jun 1995, William P Densmore Jr. wrote:

> dave oliver wrote:
> We've seen a lot of conflicting information on this up-coming Microsoft
> Registration Wizard.  The entire issue sheds some interesting light on
> both Microsoft and people out here in the field who are sometimes a little
> too eager to see the company in a bad light.

For the handfull of still small voices out here in the wilderness of the 
internet land, there are dozens of "Reliable sources" that seem to feel that
Microsoft can do no wrong.   The success of Microsoft has depended 
largely on lawsuits, vaporware, "reverse engineering" (a polite word for
piracy), buying companies with their own money, extortion, and promises
which which were not meant to be kept.  Yet there have actually been
several publications which salute Bill Gates and Microsoft for it's 
integrity.

> As originally posted to the net, the Wizard was thought to be a "virus"
> type program that sought to discover all your software and report what
> it found back to Microsoft.  I had the image of an old East Bloc Foreign
> Intelligence Service with data pouring in from all over the world being
> analyzed by guys with strange accents and being sold out the back door 
> to some "marketing black market" for American dollars instead of rubles.
> This is the "bad cop" scenario - published first and eagerly passed around
> among newsgroups.

There is a big difference between a "License Manager" program which you 
voluntarily run with the intent of managing your licenses, and a "Trojan
Horse Virus" which hides a security breaching system within a popular
application.  The internet crash of 1987 was caused by such a virus.
I'm sure my system administrators would not be thrilled to find out that
they have just spent $30,000 on fire-walls only to have Microsoft publish
the IP addresses of every node on the "Safe Side" through an
unsecured route.  Worse yet, such license managers would publish the
addresses of unsecured workstations, providing the largest possible
exposure.

> Later word, states a bit more calmly that the Wizard is really a software
> assistant that helps a site administrator with software registration 
> procedures so that the company (Microsoft) can provide better customer
> support to software users.  This is the "good cop" scenario.  Not too many
> newsgroups focus on those companies who try to give high-quality support, 
> so I can not be sure if Microsoft ran this idea by some customers first.

This is a bit like "News Speak".  We can talk about the Greybar Hotel 
(prison) and it's fine fitness program (chain gangs), and entertainment
(beatings by the guards) and social activities (gang rapes).  Now we
have Microsofts customer service program (piracy reporting scheme) and
software registration program (wired directly to your Credit Card through
the MSN account).  Wait until some poor unsuspecting user has to reformat
his hard drive and restore his backups then discovers that his Mastercard
has been hit for $1000 in "Software Registration Fees" because Microsoft
can't tell the difference between a reformatted Hard Drive and a pirate.

> Hidden between these two "cops" is the fact that Microsoft wants to know
> who is using its software.

Why.  If I need support I will have to call their $3.00/minute ($180/hour)
"hot line", spend 30 minutes wading through their automated response system,
and spend 20 minutes playing 20 questions about my serial number, disk 
drive number, social security number, credit card number, and the serial 
number of my Motherboard ROM.  At the end of this $300 phone call, they
will tell me that they have a fix that will be available in 3 months, and 
that I can buy the software upgrade at that time.  Meanwhile, that quarterly
report is due to my Vice President in 2 hours.  What was that about 
Microsoft's terrific customer support?

> Let's face up to something perhaps most people 
> dont want to admit: software theft is RAMPANT, mostly because people assume 
> that the chance of getting caught is virtually nil.

More importantly, because there are certain software vendors who like to 
hike their prices 4000% in 6 months because the "perceived value" went
up.  Never mind that the company would never have bought the product in 
the first place if they knew that they were going to have to pay 
$500/copy for 500 copies because the files generated by the first
50 copies purchased at $50/copy can't be read by anything else.  It's like
Guido's insurance policy.  If you don't buy his insurance, you will have
an accident (he'll accidently dislocate your shoulder).

Other than a bit of Media Hype, what makes the word processor produced by
Microsoft so much more intrisicly valuable that the Andrew package which can
be legitimately owned for under $30/copy.

Half the country is trying to figure out how to cut their budgets enough 
to be able to afford the megamonster computers that will be needed to
run NT.  Why not slash the budget in a big way by slashing out software
that costs a staff-week, and requires hardware that costs a staff-month.

> This is an unfortunate, 
> base, human weakness that even the most virtuous "normal" people seem to 
> have.
When Microsoft appropriated several billion dollars worth of NSF software 
to support it's access to the internet and paid nothing to any of the 
thousands who contributed time and money to it's development, who showed
concern for them?  Microsoft then turned this same software into products
which it used to adversely impact the very people who designed it.  This
is like being asked by the police officer to give your gun to the man who
has promised to blow your kneecaps off.

> Is this fair, then, that Microsoft wants to know who legitimately 
> uses its software?  Or is it a huge invasion of privacy?  If it IS an 
> invasion of privacy, would we take the hit to get better customer service?

Has anyone ever done a through audit of Microsoft's software?  What are the
odds that such an audit would leave Microsoft owing several billion to
NSF, Digital Research, Wang Labs, Xerox, DEC, Sun, AT&T, Lotus, BT, and 
Novell. Instead, Microsoft is buying these companies with their own money.

> Though I do not always agree with the pricing and distribution strategies
> of software companies, I *do* agree that the authors of software need to
> be renumerated for their work.

This would be a reasonable assumption, except that many authors have been
forced to forfeit their royalties because Microsoft has established a
software "Monopoly".  Very few developers for Windows have become abundantly
wealthy without paying at least 30% of their pretax revenues directly to
Microsoft in the form of "Tribute" royalties.  The Windows NT market has
become a Joke in terms of profitibility, and Windows95 is a customer 
relations nightmere.  If developers don't provide 32 bit versions for
Win95 their applications will force Windows into "Thunk Mode".  If
they try to charge an upgrade price, they risk losing their market to 
Microsoft.

> It seems that because software is "soft",
> most people dont see the inherent value of a single copy, or realize 
> that it takes lots of people to write, document and support (note I have not 
> mentioned the sales side).

I have been on production teams which implmented projects costing $150 
Million to develope from scratch, using 15 different CPU types, 9 
protocols, 12 brands, and STILL come up with a system that could be
reproduced for very little money.  Microsoft charges $700 for each copy
of the Microsoft "Bundle", and has sold $100 Million copies.  Their
"Support" (For users, not developers) consists almost entirely of
the Automatic Voice response "hot-line" at $180/hour, and semi-annual
upgrades costing 30% of the original purchase price.  The justification
is based almost entirely on "percieved value pricing".

Compare this to the highly competitive Unix market where $60 gets you
every imaginable kind of software.  At $100/user, you get frequent
upgrades (weekly or monthly), and for $1000/server/month you can have
it installed buy a degreed engineer who will support you with source
code as well as binaries.

The primary source of advertizing for Unix has been the Internet.  It isn't
because they couldn't afford better, but because they could make a 
substantial margin (5000%) with little more than source code and the mere
request for negotiation of licensing agreements.  The first question they
ask is "How much do you want to spend?".  The best answer is "40% less than
it would cost to do it myself".  The same software can license for as
much as you are willing to pay.  I've seen simple packages such as
"firewall-gateway" sold to two different customers.  One paid $5,000, because
he knew he could build it from scratch for $10,000.  Another paid $60,000
because he knew he could make $100,000/month.  Both were pleased with their
respective "deals".

> This costs money, and if we are to continue to 
> get software that is easy to install and use,, money needs to flow 
> back to the authors.
There is no problem with authors receiving reasonable compensation for 
reasonable effort.  If a bit of advertizing sells a few more copies
at a slightly higher price, so much the better.  On the other hand
buying 45 full-page ads in every major publication that provides
editorial content which blesses your product and discredits all
contenders is like trying to convince everyone that anyone who
can't see your invisible suit is a fool.

> Microsoft is of course a huge author of 
> software, and they are trying to do something about making sure they 
> get the proceeds from their work.  In many senses, that point is fair.

Microsoft can hardly claim a monopoly on software development. Yet it
is their Monopolistic control of operating systems that enables them to
practice extortionary pricing structures and royalty collection practices.
Were it not for this monopoly, people who didn't want to pay the high
prices for Microsoft could go to other companies and buy other products.

The extortion comes when one group gets cut-rate copies of Office and
starts distributing documents amongst themselves.  Later, when other
users are considering OA software, there is some sort of "Edict" which
mandates "Microsoft only" products.  Now, if Joe User wants to work
at home to get that report done on time, he has to dig into his own pocket
for a $5000 computer and the $700 "Bundle", even though all he needed
to produce a workable document was the $700 computer and a $70 bundle.


> Of course, it is Microsoft's weakness that their "dominate the world" 
> attitude is way too close to the surface.  It doesnt appear that the 
> Wizard takes a "trust people first" attitude.

Given a company that has pirated and double-crossed nearly everyone and
delivered products two years late.... You expect them to trust anyone?

> It is not clear in what
> form information goes back to Microsoft,

Guaranteed it will be in a form that only Microsoft can use, and can only
be used by Microsoft Products.  Guarenteed it will be in a form which will
give Microsoft a monopolistic advantage.  This "Gift Horse" contains
everything required to kill all opponants.

> and it is not clear how they
> will use the information they get internally (though they've apparently
> stated they will not "sell" the information to 3rd parties).

Officially or unofficially?  Officially, it would be used for billing.  
Unoficially, remember that love-note you wrote to your girl-friend...
it will show up on your boss's e-mail if you make trouble.  You don't
even have to upset Microsoft.  Bill Gates has friends on both sides of
the congressional Isle.

> It would
> have been enough for the Wizard to search out only Microsoft products. 
> How, for example, could information on non-Microsoft products be useful 
> to Microsoft Customer Support?
Simple justification would be identifying conflicts with "plug-n-play".
Of course it could also tell Microsoft which competitors are potential 
threats and help them write driver "Killers" that would work much the
way Microsoft wrote "killers" that rendered Stacker disfunctional.

> Taken together with the MSN, this ability
> to have a near real-time software market penetration data base for 
> multi-vendor products is pretty powerful stuff.
Very close to absolute power.  Power corrupts...  Even if "Saint Bill"
is benevolent, what about his Leutenants?

> From a company that is 
> ALREADY pretty powerful stuff, it is a bit hard to stomach, even in the 
> "good customer service" light.
Add a bit of a "Mail dump" capability, and you can even have the "Thought
Police".

> On the other hand, most Americans seem to have no problem with the fact
> that their banks, their credit card companies, their insurance companies,
> and their favorite retailers are widely trading information on buying 
> habits, credit, income, etc.

At least with these, I have the Illusion of Privacy.  If I don't want
VISA to know how many hamburgers I eat, I can get Cash from the ATM
and I won't be turned over to the Insurance company as a health risk.

> And, I can see absolutely no benefit to the
> customer from all this horse-trading.  So, what's the big deal about 
> telling Microsoft about the software we use?
If Microsoft can kill all competitors or buy them out with their own money,
then Microsoft can double it's prices again.  Today, it isn't about money,
it's about Power.  Almost anyone at Microsoft could track e-mail and
personal drive contents, search content without warrants, and broker
information to almost anyone.  The right information, in the hands
of the right people, can be very powerful.

> Or, are we just interested
> in punishing Microsoft for its "dominate the world" attitude?  I 
> personally believe that people who do not like the Registration Wizard
> should "vote with their feet" and start buying other people's products.

Ever try "Voting with your feet" in a corporation where a corporate 
officer has mandated "Microsoft Only" products?  What's really fun
is when you move to three different jobs which are "Unix Friendly"
when you interview, and hire some big gun who mandates "Microsoft
Only" within days after you start.  If I were the paranoid type,
I would be worried.

> That is much more likely to keep Microsoft "in line" than a smear 
> campaign.

You have got to be KIDDING!!!
Microsoft has built its entire empire by mass purchasing enough press
ads to influence the editorial policies of practically every major
publication.  Try going to the MIS director and telling him that you
can provide full network capable software and a complete office automation
suite for 10% of what he is paying now.  Even though you are telling him
that he can buy Escort and Taururs instead of Mercedes 600s and Jaguars,
he things you are trying to sell him a kiddie wagon.

Software pricing is 99% agreement.  If I can convince you that my Web server
is worth $500,000 BECAUSE I CHARGE $500,000 for it, you will pay.  At 
that point, being human and therefore addicted to being right, you will
never be willing to admit that the source code you could have bought
for $500 was actually a better deal in the long run, even with the $50,000
support person who incorporates every upgrade and innovation within 30 days.

> dave oliver

	Rex Ballard
	Standard & Poor's/McGraw-Hill
	Opinions expressed do not necessarily reflect
	the Management of the McGraw-Hill Companies.



From rballard@cnj.digex.net Wed Jun  7 00:53:42 1995
Status: O
X-Status: