MESSAGE
| DATE | 2003-05-15 |
| FROM | From: "Inker, Evan"
|
| SUBJECT | Subject: [hangout] Microsoft Up to No-Good Again!
|
Report: Microsoft ready to slash prices to beat Linux
By Scarlet Pruitt, IDG News Service
MAY 15, 2003
Source: IDG News Service
In an effort to win big government and institutional contracts when up
against Linux, Microsoft Corp. is prepared to draw from an internal slush
fund to offer its software at deep discounts or even for free, according to
a published report.
According to today's online edition of the International Herald Tribune
(IHT), last July Orlando Ayala, then a top Microsoft sales executive, sent
an e-mail authorizing senior managers to draw from a special fund in order
to win contracts where the software company looked likely to lose against
open-source Linux software.
"Under NO circumstance lose against Linux," the IHT quoted Ayala's e-mail as
saying.
Microsoft representatives in the U.K. declined to comment on "leaked or
speculated internal documents" but did issue a statement saying that "the
issues raised in the [IHT] story touch programs that the company has adopted
to make technology available to customers at low prices."
At the time the e-mail was reportedly sent, Ayala was the No. 3 executive at
Microsoft, in charge of sales and marketing. He has since been transferred
to lead a new business focused on small and medium-size companies, the paper
said.
Although Linux has a tiny share of the desktop software market compared with
Microsoft's more than 90%, the cheap, open-source alternative does have a
growing share of the server software market, and it has been gaining
attention with governments looking to shift to what some see as a more
stable, low-cost option, particularly in emerging markets.
The IHT report details other aggressive strategies said to be employed by
Microsoft, such as offering discounts on the hourly rates for its corporate
consulting services and covertly collecting information on competitors. The
tactics, if true, could potentially run the company even further afoul of
government regulators, which have been pursuing Microsoft for years over its
dominance in the PC software market.
Late last year, after Ayala's e-mail was reportedly sent, Microsoft finally
reached a settlement with the U.S. Department of Justice to loosen its grip
on the desktop software market by sharing some source code, unbundling
products and taking a more evenhanded approach toward competitors.
The European Union is also scrutinizing the company and has generally
stricter antitrust laws than the U.S. Steep discounts given by a dominant
software provider could potentially violate EU antitrust laws, the IHT said.
Representatives for Microsoft in the U.K. wouldn't comment on possible EU
regulatory action in light of the report, saying only that the company
continues to work constructively with the EU for a resolution of its case.
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