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On 2 Jul 1996, Orc wrote:

> In article ,
> Darin Johnson  wrote:
> >> > If I want Unix on P6-class hardware, I get to pay for it.  If I want NT
> >> > on P6-class hardware, I get it when I buy the machine.  If I _don't want
> >> > NT on P6-class hardware, I get it when I buy the machine, too. 
> >
> >WHAT????  This is the same sort of thing that Microsoft got in trouble
> >for before.
> 
> No, I believe what got them in trouble was the exclusive licensing
> bit; "if you want any sort of discount you can't bundle any other
> operating system."  Now it's "Hi, we're Microsoft and we've sold
> 200 million copies of Windows in the last 3 years; we don't
> particularly care if you bundle some operating system that's maybe
> sold a million copies, but we'll offer you a good price if you'll
> make your machines salable by bundling our latest OS."

There is a very thin line between bundling and monopolistic exclusion.
What Microsoft wasn't able to do legally, it has tried to do
through technology.  They ask the vendor how many PC's he thinks he might
sell, and offer him a "lump sum price" for this estimate.  Remember,
Microsoft prices are based on "snake-oil and soda-pop" marketing known as
"Percieved Value Pricing".  In the same way that Coca-Cola uses
advertizing and promotion to get people to buy soda-pop, that costs 10
cents/gallon to produce, for 3 cents/ounce.  It is no coincedince that
Microsoft and Coca-Cola both have stock prices running at nearly 40 times
earnings (in other words, it would take 40 years to recoup your
investment).

I can by "generic cola" for as little as 25 cent/litre because they are
willing to sell it at 5 times their cost (isn't that generous of them :-).

I can buy a "Linux Based PC" for a fraction of the price of an identical
"Microsoft Solution" because the vendor community is willing to sell the
product for only 10-20 times their cost.

It should be an interesting fall.  You may start seeing a number of 3rd
party vendors such as Corel and Lotus "throwing in" not only a Linux
compatible version of the software, but a Red-Hat or SlackWare
distribution as well.  A number of database vendors have started doing
this over the last two years, especially since "Access" pushed them out of
the NT market.  Besides, royalties and media for Slackware in quantities
is less than just the "binary right to link to the DLL" from
Microsoft.

It's ironic that after waiting 14 years for a multitasking multiuser
operating system with the blessing of "somone as big as IBM",  it arrives
with a bundle of applications that excludes third party vendors.

> >Then again, this could be the same sort of overpriced underpowered
> >machines that mass-market stores sell, those claimed to be bundled
> >with $2000 worth of software (crap like M$ Encarta, M$ Animals, etc).

Remember when the first VCR's came out for $2000 each?  Or the first
Televisions cost a months pay?  Linux actually makes the "Appliance
Computer" a real possibility.

Because it there is compatibility and there is free market competition for
the best service and support (rather than relying on copyright and patent
monopolies), a whole new dimension of software/hardware is now possible.

Not only can "appliance PC's" be built for under $500, but they can get
their software, and frequent upgrades, via the internet.  Applications
like word processors, browsers, servers, games, and development languages
can be purchased for prices ranging from $1.00 to $5.00 (since you are
ONLY paying the royalty costs, not distribution/marketing).

You can earn "bounty" by fixing bugs reported via internet news-groups.

> Look in the computer magazines; most of the vendors there prominently
> state that Windows 95 or NT are bundled with their hardware, and those
> who don't still include one or the other (with a few still offering
> 3.1, though those copies are probably illegal.)

It is still acceptable to sell Windows 3.1 with PCs that don't have MPC
capability (no CD-Rom Drive).  Many of the small "Chop Shop" dealers that
sell "Custom Built" machines are quite eager to sell Linux powered
machines, often referred to as "Internet Specials" (due to their common
use among Independent Internet Service Providers).

Of course, the opportunity for OEM's and VARs is also quite good.  They
can offer "Introductory" packages based on Linux, and when the customer
approves the prototype, they can bring in Sun, HP, SGI, or IBM Unix boxes,
along with "industrial strength" (Politically Correct :-) production
versions.

> >Anyone who thinks that they must get software packaged with their
> >system is deluded.  You do not ever get NT for free.

Nothing is "free", not even Linux.  Assuming my time is worth $50/hour, it
costs me $200 to do a "Linux Install" on an unfamiliar PC.  Then there is
always the "cost" of learning and "playing" with the thousands of
applications that are bundled in.  Emacs basics can be learned in 2 hours,
but the full power of emacs requires several weeks to learn.  Simple
MS-DOS equivalent commands can be learned in a few minutes, but the real
power of Perl, Awk, Sed, and Lex/Yacc take several months to fully
develop.  Of course, you will be more productive within a few days (Unix
originated the concept of Rapid Application Development).  We haven't even
touched on the subtleties of TK/TCL, Java, or Smalltalk/X.
 
> Bundling is a pretty spiffy way to sell units.  It's like the gasoline
> tax; the money is taken away while you're buying something else, so many
> people don't even register it as a tax, but part of the cost of gasoline.

Gates learned this strategy back in 1977.  If you sell a piece of software
for $500, the dealer will buy 1 copy and turn his back while customers
make 10 copies.  If you sell the same piece of software to the
manufacturer for $200 and have him install it at the factory, customers no
longer have an incentive to steal (or go to the "Disreputable Dealer" for
that matter), and dealers have to give away competitor products as
"Throw-ins" to close the deal.  Some dealers are starting to use "Linux"
as the "Throw-in", offering to install it for the customer.


> >> > I fully
> >> > expect that NT will be on 80% of the desktops in the world within 18
> >> > months, after the P6 becomes the 1997 commodity chip.
> >
> >And if not, will you eat crow, or make yet another prediction?

The interesting thing is that Linux might actually be right there next to
it.  Remember, Linux can easily be put on a spare partition or a spare
drive of an NT machine.  In fact, it will be probably start to be common
to see 2 partition and 3 partition PCs with NTFS, FAT, and e2fs (linux)
partitions.

Many people can't completely wean themselves from their Windows
environment.  If my boss wants my report in Microsoft Word format, it
doesn't matter that I can compose an HTML document with a WYSIWYG editor.
It would be corporate suicide to give him a "Read-only" document that he
can only view with Netscape (wouldn't it?).  After all, he can't remove my
name from the report... He'd have to link in to my URL on the departmental
server.  That would be terrible, wouln't it? :-),

> The question is how fast the P6 boxes will push off the 486 boxes.
> The people who buy prebuilt machines will, by and large, stick
> with the OSes that come with those machines.  

An even more interesting question might be, what's going to happen to
those 486 boxes?  If that "Boat Anchor" gets turned into a full-featured
corporate intranet server, complete with News, Web, SMTP E-mail, and
gateways to the internet firewall, the bright soul who does it is likely
to get some positive recognition.  His boss will look great because he is
showing off the "Latest Technology" on a budget that is less than the cost
of the annual "Microsoft Office Upgrade".  The boss might even be willing
to buy an X-Server package for that NT workstation.  Next thing you know,
he has the best of both worlds.

> And you may have
> noticed that MS operating systems come with a lot of the machines
> sold these days; and, after the stunning success that Win95 has
> (not) been, it's quite likely that that particular albatross will
> be dumped in favor of pushing The Operating System Of The Future(tm)(r)(C)
> onto desktops.

Mr Gates has been trying to "get it right" since 1990 when he released
Windows 3.0.  We had a "technology fair" where they were proudly
displaying Microsoft Windows 3.0.  Down the row, 6 feet away, was a table
crowded with people looking at a sun loaded with perf-meters, bouncing
balls, scrolling news, e-mail, news, and Sun-Write, all running in tandem
along with a 12 sheet Lotus 1-2-3 spreadsheet interactivly updating
multiple views.  By the end of the third day, the Microsoft rep had gone,
the Windows Demonstrator was spending most of his time on the Sun, and the
technology Guru's were bringing in their V.P.s to show them why they
should by the $8000 Sparc instead of the $6000 Windows 3.0 PC.

Today, that same demonstration can be replicated by putting a Pentium 166
running Windows NT next to a Pentium 75 or a 486 with a basic graphics
accellerator card (ATI or S3) running Linux.  In fact, you can create some
great demos using GNUplot, a news feed, and a few web surfing "Robots".

Just to be fair, it's fun to put a few Java apps on each machine, but use
the Linux machine as the Server for both.  Hide the boxes under the table
and watch your boss oogle over the "Linux Powered Boat Anchor".

> >I fully expect you meant to qualify that statement, as in 80% of new
> >P6 systems or such.
> 
> No, if I was talking about P6 boxes, I'd say 99%.

A more likely and interesting scenario.  As Linux hackers proliferate,
they will begin using NT flavors of tools like PERL (which has now become
the defacto "scripting language" of Windows NT), TK/TCL (can someone whip
up a VB like "drag and drop" utility for TCL/TK please? - it should only
take about 90 minutes :-), and JAVA (Sun has earned a shot at one big
"money maker").  This will ultimately result in "transitional"
applications which allows the same application to run on either Windows NT
or Linux (Or any other version of Unix for that matter).

"TIMBER" (what you say when something very big starts falling).


>                  ____
>    david parsons \bi/ orc@pell.chi.il.us
>                   \/
> 
> 

	Rex Ballard - Director of Electronic Distribution
	Standard & Poor's/McGraw-Hill
	Opinions expressed do not necessarily reflect
	the Management of the McGraw-Hill Companies.
	http://cnj.digex.net/~rballard




From rballard@cnj.digex.net Wed Jul  3 17:57:07 1996
Status: O
X-Status: 
Newsgroups: comp.os.linux.advocacy,comp.os.ms-windows.nt.advocacy