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Microsoft disparages open-source TCO with year-old case study

By | December 3, 2008, 7:31am PST

Summary: On December 3, Microsoft issued a press release entitled “Microsoft Gives Businesses Lower TCO Versus Hidden Costs of Open Source.” The message: Open source software costs businesses more than Office and other closed-source Microsoft products.

There are lots of internal rivalries within Microsoft. One of the most constant is the battle between the Windows/Office teams and the open-source team at the company.

Microsoft’s open-source team is continuing to try to build bridges with open-source providers — emphasizing Microsoft’s interest in making open and closed source products more interoperable in order to help customers. Microsoft Chief Software Ray Ozzie has made open-source interoperability one of his cornerstone platforms since he joined the company in 2005. At the same time, however, Microsoft’s Windows and Office teams are continuing to use total-cost-of-ownership (TCO) and customer case studies to prove that Linux and Open Office end up costing customers more than free/open-source software.

On December 3, Microsoft issued a press release entitled “Microsoft Gives Businesses Lower TCO Versus Hidden Costs of Open Source.” The subtext: Speedy Hire, a British company, is saving $1.48 million within five years by dumping open-source software for Microsoft products.

The Speedy Hire case study is not new. It dates back to December 2007. So why is Microsoft touting it today? Perhaps due to the recession and desire by companies to find ways to cut costs by using more free software? Or maybe to counteract the press around a former Microsoft developer’s new book celebrating the joys of open-source software? Or maybe it’s just one more attempt by the Softies to bang the OOXML drum, given a fleeting reference in today’s press release to a need to standardize around a single document format?

Of course, Microsoft has the right to compete against open-source software and to use any legal means it likes to do so. But the mixed messages coming out of Redmond are somewhat confusing.

Is Microsoft really advocating customer choice and offering to help smooth interoperability hurdles? Or is all the talk about interoperability just a smoke screen designed to cover up Microsoft’s real message that Windows, Office and other closed-source software is what users should be deploying, regardless of the corporate rhetoric?

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Topics

Software, TCO, Microsoft Corp., Speedy Hire Case Study, Roi/Tco, Open Source, Tools & Techniques, Finance, Managerial Accounting, Management, Mary Jo Foley

Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

Disclosure

Mary-Jo Foley

Freelance journalist/blogger Mary Jo Foley has nothing to disclose. WYSIWYG (what you see is what you get). I do not own Microsoft stock or stock in any of its partners or competitors. I have no business ventures that are sponsored by/funded by Microsoft or any of its partners or competitors.

Biography

Mary-Jo Foley

Mary Jo Foley has covered the tech industry for 25 years for a variety of publications, including ZDNet, eWeek and Baseline. She has kept close tabs on Microsoft strategy, products and technologies for the past 10 years. In the late 1990s, she penned the award-winning "At The Evil Empire" column for ZDNet, and more recently the Microsoft Watch blog for Ziff Davis.

Got a tip? Send her an email with your rants, rumors, tips and tattles. Confidentiality guaranteed.

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RE: Microsoft disparages open-source TCO with year-old case study
makrejktt2901-24353668065513681736555950048637 Updated - 11th Nov
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1.48 Million?!
Stuka 3rd Dec 2008
Does the study actually list where this kind of money was saved? Because I honestly do not see it. There would have to be a HUGE difference in IT cost to account for that.
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RE: Microsoft disparages open-source TCO with year-old case study
Loverock Davidson 3rd Dec 2008
Sounds right on target to me. Microsoft has always provided a lower TCO due to the ease of use of Windows, abundance of management tools, and skilled employees. Factor those in and its easy to see how this study came about and why it is true.
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So you're counting
kozmcrae 3rd Dec 2008
the Microsoft crap they threw out too? Yeah, that's right. It wasn't pure Open Source, it was mixed.
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Do these studies ...
MisterMiester 3rd Dec 2008
...take into account CALs? or compliance management? or software audits? or the FV of money? If not then the study is worthless.
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If you read the case study ...
RationalGuy 3rd Dec 2008
... you will see the notion that the savings were exclusively due to getting rid of hidden costs related to open source TCO is kind of misleading.

It appears that the company in question was a hodge-podge of 10 different companies, and the project that got rid of the open source products was a larger consolidation project. In addition to collapsing disparate infrastructures in one common system (for example AD and Exchange), the company was able to restructure its existing licensing.

Because the switch to MS was part of a larger effort to eliminate waste and gain efficiencies, that is not to say that a similar effort not using MS technology would not have yielded similar results. In other words, are they saving money because they got their act together using MS technology, or are they saving money simply because they got their act together, and would have saved money regardless of the technology vendor?

Link to case study:
http://www.microsoft.com/casestudies/CaseStudy.aspx?casestudyid=4000001130
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This seems to be fairly common practice
NonZealot 3rd Dec 2008
Because the switch to MS was part of a larger effort to eliminate waste and gain efficiencies, that is not to say that a similar effort not using MS technology would not have yielded similar results.

How many times have we seen people claim that if a company got rid of their paper MCSEs and moved to Linux with competent admins, that everything would be better? Couldn't the same be accomplished by getting rid of their paper MCSEs and hiring competent Windows admins? Of course. There are plenty of cases where a Linux project has failed and invariably, the blame is put where it should be: on the people. Interesting how the same is never considered when something fails on Windows.

In other words, are they saving money because they got their act together using MS technology, or are they saving money simply because they got their act together, and would have saved money regardless of the technology vendor?

I agree but I think it does truly destroy the argument put forth by ABMers: it is impossible to succeed on the Windows platform. It clearly is possible and has more to do with the people than with the technology. Both have their advantages and disadvantages and both can be made to succeed (or fail) based on the quality of the people involved. Anyone who believes otherwise is a fanboy for (or against) whatever platform they are talking about.
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So a fair comparsion to TCO ...
MisterMiester 3rd Dec 2008
... between Linux and Windows would be both systems need to have competent people working behind the scene, correct? So the study is already debunked since replacement of one efficient system with competent people for another based solely on cost is not represented. grin
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It's not that the study is debunked ...
RationalGuy Updated - 3rd Dec 2008
... because it's clear that consolidating on MS technology is saving this company a lot of money. I just find the connection to OSS to be a bit dubious -- it's falsely setting this up like a zero sum game.

It's the distinction between "MS delivered value BECAUSE they got rid of OSS" and "MS delivered value AND they got rid of OSS".
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Well maybe debunked is too strong ...
MisterMiester Updated - 3rd Dec 2008
..., but I agree with you that it's very dubious that Microsoft is framing the argument in this manner.
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If it's impossible to succeed on Windows ...
RationalGuy 3rd Dec 2008
... then I wouldn't have a career. Sure MS products have faults -- and I can always name way more of them and describe them all in depth better than the MS bashers can.
However, MS has always focused on delivering value by solving business problems. Consequently, the technology can succeed in a wide range of applications.

Of course, it's very easy for untalented people to implement poor and mediocre solutions using MS tech that simply limp along. In that regard, I agree with you that ultimately it's the people who make the difference.
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Rightly or wrongly
thelivo Updated - 3rd Dec 2008
A case study by a vendor saying why its product is so great is not worth the paper it's written on.
Lies, damn lies and statistics.
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hmm
gnesterenko 3rd Dec 2008
I guess its time to throw out all my medications then. I mean, they were all tested by the companies that sell them. They must be lying. All natural herbs for me from now on...

"The views expressed here are mine and do not reflect the official opinion of my employer or the organization through which the Internet was accessed."
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Small problem here ...
MisterMiester Updated - 3rd Dec 2008
I guess its time to throw out all my medications then. I mean, they were all tested by the companies that sell them.

In the United States there's a governmental agency that provides oversight to the pharmaceutical industry called the Food and Drug Administration (FDA) and drug testing does fall under their jurisdiction. Maybe you've heard of them? wink
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More damage control from Microsoft ....
MisterMiester Updated - 3rd Dec 2008
... because of the feature stories recently in Business Week about open source and cost savings. grin

Edit:

BTW if anyone wants to read the articles here's the linky ...

http://www.businessweek.com/technology/content/nov2008/tc20081130_069698.htm
0 Votes
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Expect better prices from MS soon.
TripleII-21189418044173169409978279405827 3rd Dec 2008
Their latest TCO studies have been of the effect "We can be as cheap as other solutions" in the long run. All these TCO studies do is cloud the issue, but enough people have saved enough (and spread the word in a grassroots way) such that the next step will be the natural step in competition, lower prices. Home and Student Office is now $69, probably never to go up again. In the enterprise, they will soon have to start making the same cuts as in the consumer market.

In all, that is good for consumers, the only ones to be hurt will be MS's money losing internal operations, they will have less money to spread on all the money losing fronts,

Here are some examples, it will be impossible for MS to charge $79 for Windows 7 on the netbook segment. How many OEMs will re-classify or just balk at paying $10 for Windows 7 for the EEE and $149 for the "medium" version of Windows 7 on their "regular" laptop line.

In any case, you can't believe any TCO where the sponsoring entity has a vested interest. If you do, then you might actually believe that HP "recommends Vista".

http://boycottnovell.com/2008/12/01/leaked-oem-vista-ad-incentives/
This is how Microsoft gets all those Vista advertisements all over the place, including big OEMs. They pay you for it. It?s an advert, not a sincere recommendation.

TripleII
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Companies have to pay for advertising?
NonZealot 3rd Dec 2008
This is how Microsoft gets all those Vista advertisements all over the place, including big OEMs. They pay you for it.

Wow, I never knew!

You stress what I believe is Linux's biggest weakness on the consumer desktop: a total lack of effective marketing. Nothing, and I mean nothing prevents Ubuntu or Red Hat or Novell from paying HP to "recommend Linux". If they can't afford it then tough. Dr. Pepper probably can't afford to advertise as much as Coke. Tough. That's life in a capitalism based market.
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You miss the point.
TripleII-21189418044173169409978279405827 3rd Dec 2008
It is misleading.
http://www.merriam-webster.com/dictionary/recommend
to present as worthy of acceptance or trial b: to endorse as fit, worthy, or competent

The strictly confidential nature of the leaked agreements should be the first clue, they are mis-representing that HP, Dell, etc all recommend Windows on it's merit. The fact that it is paid for in normal advertising has to be disclosed.

Take any TV commercial, there is a reason why "paid endorsement" shows up in small print at the bottom of the screen or some variation thereof, without it, it is deceptive advertising, the entire point.

Yes, I know none of this applies to MS, they can do what they want, but doesn't mean it is above board.

TripleII
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Where does it say this?
NonZealot Updated - 3rd Dec 2008
HP, Dell, etc all recommend Windows on it's merit.

Where does it say: HP recommends Windows because it will .

If were deceptive then yes, this is false advertising. However, it is 100% true that HP recommends Windows, there is nothing false about it.

Take any TV commercial, there is a reason why "paid endorsement" shows up in small print at the bottom of the screen

Hmm, to be honest, I don't think I've ever seen that show up at the bottom of the average 30 second commercial. I've seen it in infomercials but the phrase "HP recommends Windows" is hardly pretending to be a long paper about why HP recommends Windows, it is much more like a 30 second commercial.

This is really no different than paying a celebrity to "recommend" your product in a commercial. Anyone who believes that celebrity isn't being paid to "recommend" that product is seriously naive.

Apple is getting into huge trouble because they claim that the iPhone 3G is twice as fast and half the price. These are statements of fact that are patently false and is why their commercials keep getting banned in the UK. HP does recommend Windows so the phrase is not false in any way.
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Do you know what recommend means?
TripleII-21189418044173169409978279405827 3rd Dec 2008
Seriously, read the linked in definition, from Webster. If you don't know the difference between "recommend" and "paid endorsement", there is nothing I can do. Do any of these seem familiar?

"I am a non attorney spokesman"
"Paid actor re-enactment"


http://www.soupornuts.com/the-price-of-paid-endorsement-vs-the-cost-of-lost-credibility/
The price of paid endorsement vs. the cost of lost credibility

There's the rub, MS is deceptive about using paid endorsements AS IF they were recommendations.

On your assertion that HP recommends Vista, you lose completely on that point.

http://gadgets.boingboing.net/2008/08/08/hp-to-microsoft-were.html
HP openly admitting that it inflates the headcount. By selling license for Vista but actually pre-installing XP on new computers, it dodges Microsoft's efforts to prevent it selling the older software even as it helps fluff the numbers.

Jane Bradburn of HP's Australian subsidiary told APC that its customers want XP, so that's what they get.

All while you can see the "HP recommends Vista" the entire time. grin Want 12 more examples where OEMs refuse to use Vista internally while "recommending" Vista?

Another example of paid vs unpaid recommendations.
http://overtonecomm.blogspot.com/2006/01/undisclosed-paid-endorsements.html
PRSA strongly objects to any paid endorsement that is not fully disclosed as such and is presented as objective news coverage. Such practices are clearly contrary to the PRSA Member Code of Ethics, which requires that public relations professionals engage in open, honest communications and fully disclose sponsors or financial interests involved in any paid communications activities.

Again, what part of undisclosed paid endorsement hiding as a "recommendation" is unclear? It can't get any more plain that the above, and you are a smart person, but you will have a hard time hiding this as symantics. Exactly similar to Vista Ready vs Vista Capable. You are (were?) a staunch defender at least as far as I remember.
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Point by point
NonZealot 3rd Dec 2008
If you don't know the difference between "recommend" and "paid endorsement", there is nothing I can do.

I fully understand it, I wonder if you do? A recommendation is just that: I suggest that you purchase this product. That is, by definition, a recommendation. That recommendation could be made for many reasons, one of which is through a paid endorsement. Again, if HP said: HP recommends Vista because Linux won't allow you to surf the Internet then that would be false advertising. HP isn't lying. They are recommending Windows.

"I am a non attorney spokesman"

Is HP a "non OEM" pretending to be an OEM when they write: HP recommends Windows? No, HP isn't pretending to be anyone else. That disclaimer is because you have someone pretending to have certain qualifications when they don't, in fact, have those qualifications. It would be like saying "I'm not a doctor but I play one on TV and I recommend Tylenol". They can't get away with saying this is a doctor recommended product but no such problem exists with HP because they aren't pretending to be anything they aren't.

"Paid actor re-enactment"

And this has what, exactly, to do with Paid actor recommendation? The disclaimer there is for the re-enactment bit.

Sorry but those 2 examples above don't cut it.

The price of paid endorsement vs. the cost of lost credibility

You just provided a link to someone who happens to hold the same opinion you do. How on earth does that prove that your opinion is more correct?

Jane Bradburn of HP's Australian subsidiary told APC that its customers want XP, so that's what they get.

You lost it with this phrase. If I was a doctor and I recommended Tylenol but all my patients wanted Aspirin, and, assuming Aspirin wasn't going to hurt them, that is what I would give them. In fact, you really do yourself a disservice here because while you are trying to prove that HP is paid to enforce the sale of only Vista, you provide proof that customers could still easily get XP if they wanted. You just argued against yourself.

PRSA strongly objects to any paid endorsement that is not fully disclosed as such and is presented as objective news coverage.

Great. Now you need to show how HP putting HP recommends Windows on their website is being presented as objective news coverage.

Exactly similar to Vista Ready vs Vista Capable. You are (were?) a staunch defender at least as far as I remember.

Hmm, probably not since I never felt too strongly one way or another about that one. I do remember responding once that I didn't believe a computer had to be able to run every feature of an OS to be considered capable of running that OS. My home server running SuSE is incapable of running Compiz and Compiz if a feature of SuSE. Is my server SuSE capable? Of course it is. I'm not a staunch defender of that whole thing though because I don't think it was handled particularly well.

Let me finish by saying I do understand exactly what you are trying to say but I still disagree with it. You suggest that the term "recommends" means that the recommendation must be made with no financial incentive. I simply disagree. Consumers have some responsibility for taking facts and recommendations, putting it all together, and deciding for themselves. Anyone who does anything only because it was suggested to them is being foolish. If they don't care to learn more, chances are that Windows will work just fine for them even if Linux would happen to work better. If they do care and start asking questions, I would expect HP to answer honestly. MS shouldn't be allowed to pay HP to say that Linux can't surf the web but I don't see any issue with MS paying HP to recommend Windows to those looking to buy a computer.
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I agree with you in spirit
RationalGuy 3rd Dec 2008
they are mis-representing that HP, Dell, etc all recommend Windows on it's merit

I understand everything you're saying about why it should be disclosed that these recommendations are really paid advertisements. However, I think there's a certain amount of latitude in that it's reasonable to assume that the average consumer can tell this is not a sincere endorsement.

It's hard to imagine how a company (i.e., a non-person) can recommend something. It's like when newspapers endorse political candidates - who (or what) is actually making the endorsement (the owner, the editor, the staff, the building, an actual newspaper)?

Regarding forcing a consumer to buy Windows when they buy a computer from another company, I agree with you 100%. Even if you can't get your OS of choice, you should always get a "No OS" option. I have a much bigger problem with this than with the "recommends Vista" thing.
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You can try it for yourself.
TripleII-21189418044173169409978279405827 3rd Dec 2008
Call any OEM, ask them for something other than Windows. They will say the "recommend" Windows. Ask them "OK, what don't you recommend but will provide me". The distort what the work "recommend" actually means. With the paid advertising, corrupting the word, it recommend actually means, in this instance : The enforcement of only one OS by a 3rd party vendor through money paid to us to enforce said OS only

It really is on weakness that can't be beaten if one had the money to spend going after the OEM lock. (Course, be prepared to spend Billions, but no doubt you will win, simply based on the actual definition of the word "recommend").

TripleII
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It means no such thing to anyone without an agenda
NonZealot 3rd Dec 2008
With the paid advertising, corrupting the word, it recommend actually means, in this instance : The enforcement of only one OS by a 3rd party vendor through money paid to us to enforce said OS only

Really? How is HP forcing you to buy Windows? A recommendation is just that: a recommendation.

There is a good example of a company being paid to enforce the use of only 1 other company: restaurants that only serve Coke products. Try asking for a Pepsi in such a restaurant and you won't get one. HP will sell you a Linux computer so I don't see how you can justify your assertion that HP has been paid to enforce the sale 1 and only 1 OS.

Of course, this also ignores the fact that you have no right to demand that HP sells you Linux, OS X, or OS/2. If HP only wants to sell Windows, they should be allowed to do so and if you don't like it, buy a Mac, build one yourself, or have one of the millions of local computer stores build one for you. Yes, yes, I know the DoJ found MS guilty on this point but a court also found OJ Simpson innocent of murder. Courts do make mistakes. happy
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No, back to tying.
TripleII-21189418044173169409978279405827 Updated - 3rd Dec 2008
Go to HPs consumer website and show me any laptop on their main page where the tied OS of Windows is not mandatory. I do agree, nobody has the right to demand HP or any OEM install anything other than Windows if it so chooses, however, it should be (especially part of the DOJ settlement) to purchase any product without enforced purchase of a 3rd parties products.

Your restaurant example is not valid, they WON"T ENFORCE that I must by Coke over having water or anything else. That's the difference, you must buy Windows if you purchase ANY Sony, Toshiba, Gateway, etc product. I brought these OEMs in because they are examples where, under NO CIRCUMSTANCES, can you purchase a computer without the enforced purchase of Windows.

The court did not make a mistake, and it is right in there on the toilet paper settlement, an unenforced provision where purchasing Windows can't be mandatory when purchasing a computer. The DOJ settlement is an example of political corruption at it's finest.

TripleII
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Incorrect ...
MisterMiester Updated - 3rd Dec 2008
Yes, yes, I know the DoJ found MS guilty on this point but a court also found OJ Simpson innocent of murder. Courts do make mistakes.

No a jury found OJ Simpson innocent while a Judge found Microsoft guilty NOT the DOJ who was the prosecutor. That's why the case reads United States V. Microsoft.

Microsoft had their day in court and they lost. They also lost in the EU, in South Korea, and Japan also dinged the boys from Redmond. Do you see a pattern here? wink
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Point takem, post conviction, DOJ was useless.
TripleII-21189418044173169409978279405827 3rd Dec 2008
Also, it doesn't really matter how many times they are found guilty, when enforcement or the lack thereof is paid for does it matter. Even the EU, endless delays, and 5-6 years later, MS is just about ready to disclose the complete APIs, lol.

Look, all I want to point out it Windows has OEM control despite DOJ settlments that are not enforced and recommend is not on the up and up.

Juries, the American law system, sometimes absolutely corrupted, but in this case, I think you will be hard pressed to find people who think MS was railroaded.

Peace.

TripleII
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Tangent on OJ
RationalGuy 3rd Dec 2008
No a jury found OJ Simpson innocent

OJ was found "not guilty", not "innocent". There's a real distinction. Not guilty means that the prosecution didn't build a strong enough case to establish his guilt. Innocent implies that his lack of guilt was positively established.
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You are 100% correct
NonZealot 3rd Dec 2008
Bad example, thanks for the correction. There are several cases though where people have been found guilty only later to be found innocent through DNA evidence.

My point stands even if my example was poor: courts are not infallible. I've never accepted the argument that something must be true because a court said so. The court accepted the statement that consumers could not buy an x86 compatible computer without paying for Windows while completely ignoring the fact that consumers could walk down the street and buy an Apple computer. They never, even once, explained what an x86 computer could do that a PPC computer couldn't. They never, even once, explained what made Apple so unique that it was able to buy chips from Motorola and build their own OS. Nothing prevented HP from buying chips from Intel and building their own OS or releasing it with OS/2. Sure, they might have to give up selling Windows but that didn't stop Apple. Apple had twice the marketshare back then than they do now and they never sold a single copy of Windows.
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Microsoft must have paid them to stack the deck.
darkonc Updated - 3rd Dec 2008
For example, if you read the article, they talk about how they were using a distribution that doesn't have automatic software updates. Either they did this 10 years ago, or they're using some hole-in-the-wall distribution that was never meant to be used on commercial desktops (like Damn Small Linux or Knoppix).
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Usual conspiracy theory from a Linux zealot... nt
transposeIT 4th Dec 2008
nt.
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I don't see how this is mixed message...
blu_vg@... 4th Dec 2008
Take Novell... Windows has provided a Netware client in the box in many, many versions for interoperability. Yet, they compete against Netware. I don't think anyone sees that as a mixed message, though, right? Should it really be any different for open source?
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So what's new?
Ole Man 4th Dec 2008
Since when did Microsoft EVER NOT attack open source?

http://slashdot.org/articles/01/06/01/1658258.shtml

Ballmer Calls Linux "A Cancer"

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=60173

User queries prompt new Microsoft attack on open source

http://www.techworld.com/opsys/features/index.cfm?featureid=4174

Microsoft's open-source whizz under dual attack
Suspicion from his own company and the open-source community.

By John Fontana, Network World (US)

Microsoft's Sam Ramji is like a turkey knocking on Thanksgiving's door. Ramji has the unenviable task of stretching his neck out into the open source world as Microsoft's representative. And on top of it, his employer has preheated the oven with years of hubris, sleights of hand and broken promises.

The Sisyphean task was evident last week in Portland at the Open Source Conference (OSCon). Ramji, who runs the Open Source Software Lab for Microsoft and is the company's director of open source technology strategy, gave a 15-minute presentation highlighting Microsoft's work with open source, the company's first code submission ever to the PHP community and a $100,000 investment to become one of only three Platinum sponsors of the Apache Foundation (Yahoo and Google are the others).

Then it turned ugly.

The first questioner from the audience wanted to know what it would take for Microsoft not to claim patent infringement violations in open source code. His inquiry was followed by whoops, whistles and thunderous applause.

The next question was about trust, as in why should we trust you this time? And the next referenced what the questioner called the "Office Open XML debacle" and accused Microsoft of using its power to buy international standards.
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RE: Microsoft disparages open-source TCO with year-old case study
Jackie150 1st Oct 2009
Microsoft has got testers so panicked now about being fingered as sources of leaks that even if and when they do get the SP1 code, sexy lingerie I?m doubtful anyone will dare say anything
0 Votes
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RE: Microsoft disparages open-source TCO with year-old case study
lingerie wholesale 13th Oct 2009
Microsoft has got testers so panicked now about being fingered as sources of leaks that even if and when they do get the SP1 code,http://www.dear-lover.com I?m doubtful anyone will dare say anything
0 Votes
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RE: Microsoft disparages open-source TCO with year-old case study
makrejktt2901-24353668065513681736555950048637 Updated - 11th Nov
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