Don't be fooled by a sweetheart deal, said Linspire CEO Michael Robertson. Companies -- and government organizations
-- deliberating whether to buy Windows or Linux may find themselves tempted by a sweet price cut from Microsoft. But, Robertson cautioned, this may be the proverbial free first hit -- after which the customer becomes hooked, and the price, in one form or another, soars higher and higher.
After the stirrings that Microsoft might be gaining a contract with the Dutch government caught his attention, he posted an open offer to the Dutch prime minister, proposing that he could sell them a superior desktop operating system at a lower price. In this interview, Robertson sounds off on Microsoft's business strategies around the world, and the tide that is flowing toward Linux.
In your Michael's minute, "Open bid for Netherlands government," you make an offer that could save them something like $150 million. What has come of that offer?
Michael Robertson: Well, nothing; we just faxed it to them two days ago, so we haven't heard anything back yet. The reason we did that was to try to push toward an open bidding process. It didn't look like they were going down that path.
Have other vendors thrown their hats into the ring now?
Robertson: I should explain that we've not seen the real proposal. All we've seen is some second-hand knowledge that says, 'Hey, there's the proposal; it's for 260,000 machines; it's for the OS office suite and some servers.' That's it. That's part of why it's such a disturbing issue -- because only Microsoft has seen the specifics of the proposal. I think that's never a good thing, when not only can a company not even see the proposal, much less bid on it. So, we were trying to anticipate what their needs were without having seen the proposal.
Is Microsoft more active in fighting open source in Europe than in other countries?
Robertson: In Europe, they have this inherent pro-Linux mindset. I think Microsoft is well aware of that. This is no secret, right? A lot of these governments have said they were going to lean toward -- or be very open-minded -- toward Linux and other open source technologies. You haven't really seen many U.S. government equivalents do that. I think the overall mindset is much more open to Linux.
What Microsoft is trying to do, in my opinion, is tie organizations -- in this case, the Dutch cities government administration -- to a long-term contract. So, even as Linux improves and makes wins, they'll already have committed to Microsoft for many years into the future.
Are you seeing other countries that want to use Linux?
Robertson: There are a couple of government entities that have reached out to us for a proposal, but they haven't done it publicly yet.
Our hope is that in a lot of government contracts, they require at least two vendors -- dual-source, they call it -- because they don't want to get locked into just one place to buy it. If they do, that [vendor] will ultimately have a very powerful position to raise prices and things like that. We would like to see governments start awarding at least part of the contract to a Linux company. We think they'll get a better price on their Microsoft software if they choose to buy some -- and it makes for healthy competition. We're encouraging governments to not just look at going wholeheartedly to Linux, which would be a big undertaking, but to start taking small baby steps in that direction.
Has Microsoft been anticompetitive in other countries?
Robertson: We did see an issue where we were working closely with the United Nations on a Linux bid and at the last minute they stopped working with us. Two weeks later, Microsoft [and the] United Nations announced a very large contract. I don't have proof of Microsoft doing anything terribly underhanded, but we were working very closely with the United Nations, and we had some very detailed proposals. Then all of a sudden all we heard was 'No!' from the United Nations, nothing more. Microsoft has a gigantic sales force, and they're out looking for areas that are considering Linux.
I should stress that some places were hesitant to mention they have come to us and asked for a proposal, because Microsoft will come in and give them really terrific sweetheart deals if they think there's a risk of losing business to a Linux company.
For example, we have a couple of very large enterprises we're now working with that we haven't publicly announced, because if we do that before it's 100% deployed, [we know that] Microsoft is likely to come in and give them a sweetheart deal. Microsoft really doesn't want Linux to gain any traction, and as soon as there are a couple of keystone customers or government divisions working with Linux, I think that sets a very bad precedent for Microsoft. They'll do anything to prevent those very first toeholds.
Now that Linux and other open source software have become fairly mainstream, do you think Microsoft will be able to maintain its share of the market?
Robertson: I honestly don't see how they can maintain their share of the market because their market share is [something in the] 90% [range]. The only way you can get to that kind of market share is if you have a monopoly. They've enjoyed a monopoly for many years, but Linux is breaking their monopoly. So I think that the question is: How much market share will Microsoft lose? That's the real question. Is Linux going to just get to an Apple level of 3%, 4% or 5%? Will Linux do significantly better and get to the 25% market share like it's done on the server? I don't see how Microsoft can stop the tide that is moving toward Linux.
Does Linux turn the heads of people making IT purchases on its own merits, or do decision makers still think mostly about money?
Robertson: When we talk with IT guys, there's just an enormous frustration with spyware and viruses and with the never-ending security hassles that Microsoft Windows has. That's what we're hearing from a lot of IT guys, that cost is actually secondary to these never-ending support issues from security issues. They're just fed up with the security vulnerabilities and that's what's compelling them to look toward Linux.