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After my expose piece on Microsoft last week, I promised one reader that I wouldn't write about Microsoft again for awhile. Unfortunately, I think I
have to break my promise and here's why: As I've written about previously, the
real key to desktop Linux gaining momentum is to get retailers to sell
computers with Linux preinstalled. Sure, some people are smart
enough to download software from our web servers then burn a CD and
install it, but the majority of people want to buy a computer, plug it
in and have it ready to go. Getting Linux computers onto store shelves
sounds easy -- what store wouldn't want to stock computers for $200-300?
(I just bought a computer for $249 and upgraded the RAM from 128MBs to
256MBs for 30 bucks and it is a solid little performer!) Consumers
really want affordable computers and any retailer who stocks them sells
large quantities of them. It seems like it would be an easy decision,
right?
There's one additional dynamic that comes into the equation -
Microsoft's money to discourage retailers who start selling large
numbers of LindowsOS computers. Microsoft routinely offers financial
inducements to computer companies to not carry LindowsOS computers. With
$40 billion in the bank, it's an easy decision for them to use a few
million dollars to block Lindows.com from major retailers. Every month
that Microsoft keeps their monopoly position, it is another billion or
so in profit. You've probably heard rumors of such behavior in the past
and maybe you're skeptical because the tales are, not surprisingly,
light on facts. So allow me to give you the facts from one such
retailer to convince you.
LindowsOS computers have been available from TigerDirect, a
popular mail order technology business, run by a savvy CEO, Gilbert
Fiorentino. After selling thousands of LindowsOS computers in the
last few months, TigerDirect describes their experience with LindowsOS
in their most recent catalog, saying they have found it to be "faster,
leaner, and more stable than Microsoft Windows," mentioning how
"...LindowsOS never crashed, even in extreme testing situations," and
then go on to say that they are "more enthusiastic about the LindowsOS
than ever."
We've met with TigerDirect in the past and they've remarked what
great sellers the LindowsOS computers have been for them and how they
were surprised at the demand for Microsoft alternatives. However, at
these same meetings, they talked to us about e-mails and phone calls
from Microsoft attempting to bribe them to stop selling LindowsOS
computers.
While TigerDirect has resisted Microsoft's pressures in the
past, recently Microsoft has stepped up orders to their staffers to increase
the financial incentives to impede LindowsOS sales at TigerDirect. At
some point, Microsoft's monetary inducements become so large that it makes
economic sense for just about any retailer to abandon LindowsOS - no
matter how many computers they might be selling. TigerDirect is in the
business to make a profit and if Microsoft will guarantee them a profit,
nobody can begrudge them for taking it.
Microsoft's latest offers to TigerDirect are extremely
lucrative and I wouldn't be surprised if they ultimately cave to
Microsoft's pocketbook. Microsoft is giving TigerDirect unheard of
discounts on Microsoft software, allowing them to sell Microsoft Windows
XP for just $50 to all of their customers who have purchased LindowsOS
computers. TigerDirect is paying less for some copies of Microsoft
Windows XP than even the largest Microsoft customers like Dell. Besides
radically discounting their software, Microsoft is agreeing to spend a lot of marketing
dollars to advertise their products through TigerDirect and more
specifically to past LindowsOS computer buyers. Additionally, Microsoft is
paying TigerDirect to collect market research on LindowsOS computer
purchasers, to figure out other ways to counter this threat to their
monopoly (see exact copy of an actual survey Microsoft was using, here).
TigerDirect is receiving this favorable treatment from Microsoft because
of their dealings with Lindows.com and they've been told there are more
"opportunities" if they reduce or eliminate working with Lindows.com all together.
It won't be unexpected if TigerDirect stops selling LindowsOS
computers, but I do think it will be shortsighted. The only reason
Microsoft is offering such treatment to TigerDirect is because of their
relationship with Lindows.com. Once they cease that relationship, they
can expect Microsoft to revert to their previous style of business.
Customers will also lose out if TigerDirect gives in to
Microsoft. Lindows.com is a competitive threat to Microsoft, which is
exactly why they will be offering LindowsOS computer users the ability
to purchase Microsoft Windows XP for $50. It's a good thing that
LindowsOS users have the option of purchasing Microsoft Windows XP for
$50 when the going price is $100-200, because it means that some people
are already paying less for their software because of Lindows.com.
However, if LindowsOS is removed from the shelves, the special pricing
will be gone as well.
Fortunately, there are new retailers signing up every day to
sell LindowsOS computers and fill the demand for desktop Linux.
Just one new example from this week is Explorer Micro, who
now offers LindowsOS across their entire line of computers,
starting at just $249.
We'll find out in a couple of weeks, when LindowsOS 4.0 is released, whether TigerDirect
will continue to sell LindowsOS machines or if they succumb to the
monetary enticements of Microsoft. I hope they keep giving consumers
choice, because healthy competition is how we all get the best deals
and version 4.0 is a phenomenal product. While we wait to see how
the TigerDirect story will end, there might still be time to buy a
LindowsOS computer from TigerDirect and be included in the "Microsoft
Windows XP for $50" offer. If not, look to the growing list of
retailers selling LindowsOS computers because they'll be next on
Microsoft's hit list.
-- Michael
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