Telstra Used Linux To Get Microsoft Discounts 237
awful writes "Last year Slashdot ran a story about Australia's largest telco moving to Linux desktops. Turns out it was all a way to get some tasty discounts from Microsoft. The Australian is reporting that Telstra just signed a four-year deal with MS for $AU15-20 million, for 40,000 users. No figures yet on how much of a discount Telstra got, but MS might want to rethink handing back all its cash to investors if this is how they're going to do business from now on ..."
Go Back Three Spaces (Score:5, Interesting)
If this sort of thing isn't direct evidence of the sure eventual demise of the Business Model as Bill Knows It, then I don't know what is.
"Thank you for calling Microsoft Corporate Sales--in order to direct your call, please enter 1 on your touchtone phone if you are oblivious to Linux. Enter 2 if you have priced a Linux solution for your enterprise. Enter 3 if you have considered a Linux operating system..."
They're paying $500 per user. (Score:3, Interesting)
Of Course (Score:4, Interesting)
Telstra's commitment to Linux (Score:2, Interesting)
Re:demise? (Score:4, Interesting)
Having a sort of "dual" price structure though, I think, is a more serious crack in the dike even than making a foolish "vision" call (OS2).
I'm sure that MS will eventually shape-shift to fit a changing marketplace (MSLinux (TM) maybe), but clearly this kind of easy manipulation on the part of customers does not bode well for the status quo.
Re:They're paying $500 per user. (Score:3, Interesting)
Re:Badly Needed? (Score:2, Interesting)
Not all that suprising.... (Score:4, Interesting)
Maybe I'm just a cynic and my logic is flawed, but it doesn't suprise me that one monopoly should use get into bed with another monopoly.
When I did work for the state we used this method (Score:4, Interesting)
MS Sales rep: "This is the best deal we can give you"
Client: "OK thats fine. Our IT staff is suggesting moving to Linux"
MS Sales rep: picks up a cell and calls the office....."uh-hu"..."linux"..."uh-hu"....hangs up phone. "Ok how about this deal on a Open License package. We can knock another 20% off."
The Microsoft sales team has been ordered to win over Linux at all costs and they mean it.
Why is this big news? (Score:2, Interesting)
So again, is it just because it's Microsoft? "Oh no, Microsoft had to lower their revenues!" Guess what? Telstra's cost of switching is starting to rise slowly, as they keep with MSFT.
Jeez. "News."
-calldown
Barely a dent (Score:4, Interesting)
Besides, with MSFT the nickle and dime treatment never ends. You pay, pay, pay. Not to mention all the other software you have to buy to keep their crap running right.
Personally, I think it was a bad choice. But if you're going to stay with MSFT, then that's the way to deal with them.
MS will still make a profit here (Score:4, Interesting)
Of course they are willing to burn a lot of cash to maintain market share. MS have yet to have a quarter that comes near to breaking even in their mobile biz. They can afford to wait their time and burn cash in the mobile sector to keep their hands on corporate business.
Re:Ahh... competition (Score:2, Interesting)
Re:Go Back Three Spaces - Or not - XOR not not (Score:2, Interesting)
Re:They're paying $500 per user. (Score:5, Interesting)
Given that it's Australian dollars, and that it likely includes all the goodies (Exchange, SQL Server, etc) along with actual support, I'd say this is a hell of a good deal.
Linux devaluates Microsoft's golden eggs (Score:2, Interesting)
I read somewhere that the Windoze family of OS'es, and the Office softwares are THE big money-makers for M$, and other products are just riding along on that capital.
A story like this just shows that from a customer's point of view, Windoze/Office have value (that M$ can cash in on), but having Free/OSS alternatives, lowers that value.
So making Linux a more attractive alternative, lowers the net value of Microsofts golden eggs. How nice...
Re:Ahh... competition (Score:3, Interesting)
Re:Why is this big news? (Score:3, Interesting)
Re:One of the primary difficulties (Score:4, Interesting)
This is known in the world of microeconomics as "perfect price discrimination" [revisionguru.co.uk] and is indeed a very good thing. Also in the "Price Discrimination" category are "student discounts," and those "travel discount guides" you see at every [US] fast food place, with coupons for motels at a few dollars below the normal rate. All firms would like to achieve perfect price discrimination, where each individual pays the maximum he's willing to pay for the good or service.
Competion (Score:2, Interesting)
Re:They're paying $500 per user. (Score:3, Interesting)
Maybe windows and office, but likely not exchange. Telstra has bought Sun's Java Enterprise stack (unlike the Java Desktop System which they only talked about).
So it looks like Microsoft on the desktop, but Sun on the servers.
Re:Telstra are scum... (Score:2, Interesting)
to see just how totally fscked internet access is here just look at this
http://australianit.news.com.au/articles/0,7204,1
sure prices have finally started to drop but, as they drop so does the quality, and yes while it may be hard to believe, the "service" can get worse, although not sure how far it can fall
from personal pain, the tel$tra cable service is third rate, and thats on one of the rare good days
so far today its dropped out 14 times, then comes the mail server which I have been unable to talk to for over 2 years
not forgeting the news server which all of a sudden will not even resolve
call the helldesk, to be told "you need to use a supported OS, before we can sort your problem", er hello, I am using a Mac, but no thats not enough seems I have to downgrade OSX to 10.2 before they will talk to me
After 18 years in the IT business (data comms, infrastructure design etc), I should know whats happening, but no, some trained monkey with zero experience and a single digit IQ, tells me they he knows its my problem, even after I proved them wrong every time I have had a problem in the past.
these are the same idiots who told me "I would be able to ping the mail server if I ran outlook", yes really!
and no, I cannot change ISP, all down to my only voice line being pair gained, which rules out ADSL and even a dialup if speeds >28K are wanted. And just guess who owns the local loop, yes tel$tra.
Re:Go Back Three Spaces - Or not (Score:4, Interesting)
Even with the discounts, the sales are still profitable (they have to get below ~15% profit before Bill starts looking for the exit) but the days of 'gag a maggot' margins are nearing their end. This leads, necessarily, to the question of how long MSFT stock will remain at its current levels.
And, if MSFT stock options become less attractive, will they be able to retain their programmers for the same cash wages?
A loss of profit margins leads to a loss of stock value which leads to a loss of programmer income which leads to a brain drain. Responding to the brain drain by upping the cash component of the wages narrows the profit margins even further.
This cannot be good for Microsoft.
Re:Ahh... competition (Score:4, Interesting)
Think: US taxpayers pay for the military budget. Military helps invent things for the tech industry (like the Internet). Tech industry uses this free R&D to profit. That is the government subsidizing businesses. Not strict free market.
Think: Import/export tariffs.
Think: The recent article [slashdot.org] on Slashdot describing public subsidies of football stadiums.