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To: antiRepublicrat
Microsoft has billions of dollars of cash on hand. They have reserved tens of millions of that specifically to offer software and services at a discount where a Linux bid is involved.

A fund wouldn't be needed unless Microsoft was paying the client to use the software.

And here's where you don't get it, I'll say it again: how can you beat a bid on software and services against free software when your software costs millions in the first place without taking what would be considered a loss?

OK. I'm going to help you through this. Say Microsoft sells a particular piece of software for $1000 retail... Yet it only costs them a few bucks for the box and CD. So their incremental profit margin on a single box CD is almost $1000. That gives their salesmen a lot of leeway on large-volume pricing, while still making a small (even $1) per-unit profit.

Also, Microsoft may have offered the services at a cheaper price than the open source bidder. The open source bidder may have over-charged. 30M euro for services and the software is free? That's about $2500 per seat. Maybe Munich got ripped off. You're over-analyzing the low-bidder, and not even questioning the high bidder. And yet you feel that you could write an objective spec? LMAO! Get real.

Commercial buying is almost always negotiable, as opposed to retail. The software that I have written and sell is avg. priced in the ~$6000 per seat neighborhood. Do I get occasionally offer aggressive discounts to keep out competitors? Absolutely. Is this illegal? Absolutely not.

205 posted on 11/20/2003 10:36:50 AM PST by TheEngineer
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To: TheEngineer
A fund wouldn't be needed unless Microsoft was paying the client to use the software.

MS obviously believes it's needed, because it's there and has been used.

Yet it only costs them a few bucks for the box and CD.

Extremely simplistic view. That $600 license for a piece of software is not to pay for production costs, which you seem to think are the entire cost of software. It goes for development, marketing and all sorts of stuff. It costs a lot more than $1 to make that CD. You also forget that in enterprise cases, this CD you talk of doesn't exist one per seat, so under your estimate the per-seat cost is closer to one cent.

The open source bidder may have over-charged. 30M euro for services and the software is free?

MS's original bid was IIRC about 36M Euro and they cut it to 27M using the fund and playing with licensing. How much do you think the software licenses were worth in the first place? Do you think 9M Euro?

208 posted on 11/20/2003 12:43:56 PM PST by antiRepublicrat
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