Microsoft’s Munich sweeteners

Microsoft’s Munich sweeteners

There’s a riveting report on USA Today of the lengths to which Microsoft went to prevent the city of Munich defecting to Linux. Some details:

“Ballmer visited Mayor Christian Ude to assure him Microsoft would do what it takes to keep the city’s business. Documents obtained by USA TODAY show Microsoft subsequently lowered its pricing to $31.9 million and then to $23.7 million — an overall 35% price cut. The discounts were for naught.

On May 28, the city council approved a more expensive proposal — $35.7 million — from German Linux distributor SuSE and IBM, a big Linux backer.”

Note: the decision to go with Linux was not driven just by cost.

Apart from the whopping discounts, Microsoft also offered other inducements:

:For example, the company:

” * Agreed to let Munich go as long as six years, instead of the more normal three or four, without another expensive upgrade, a concession that runs against its bread-and-butter software upgrade strategy.

* Offered to let the city buy only Microsoft Word for some PCs and strip off other applications. Such unbundling cuts against Microsoft’s practice of selling PCs loaded with software.

* Offered millions of dollars worth of training and support services free.”