On Netbooks and Redmond, Death and Taxes

So, April has arrived, and along with it the countdown to that widely dreaded annual certainty, Tax Day.

Yes, April 15 is a date few Americans look forward to, yet it’s another kind of tax entirely that figured prominently on the Linux blogs in recent days. The topic there is known as the “Microsoft Tax,” and bloggers far and wide debated whether it’s something Linux users must pay.

The conversation was sparked by recent comments from Microsoft’s own Steve Ballmer, who suggested that Mac users pay an “Apple Tax” of about US$500 for choosing more-expensive Macs over PCs.

That, in turn, led Computerworld’s Preston Gralla to propose that Linux users pay a similar “Microsoft Tax,” because most PC hardware is still sold with Windows.

‘This Is Idiotic’

A flurry of nearly 100 comments greeted Gralla’s post, as well as almost 300 comments and more than 700 Diggs on

“This is why I’m going to build my next computer,” wrote Darkkshadow449.

On the other hand: “This is idiotic, people,” shot back Greenkayak.

“The simple comment that Macs are way more expensive than other computers is the obvious base for his statement; anybody trying to spin and contrive another way-overcomplicated theory is just so anti-Microsoft they can’t see straight,” Greenkayak continued. “Let’s get ourselves under control, please. If Jobs said the sky was orange, please don’t be one of those people who would staunchly defend that argument. It makes you look like silly zealots.”

Indeed, responses to Gralla’s assertions were varied and strong, so we here at LinuxInsider couldn’t resist taking a small poll of our own.

Wasted Time, Wasted Money

“Yes, users of GNU/Linux pay a tax to M$,” blogger Robert Pogson told LinuxInsider in an email. “They do it directly if they buy a PC or hard drive with that other OS installed, but they may also do it indirectly with any partner of M$ (nearly anyone in IT…) because a partner is required to promote that other OS.”

Not all taxes are paid in the form of money, either, Pogson asserted.

For example: “I waste time every day because some of the systems in my building run that other OS,” he said. “It complicates my life to have to deal with it. Instead of a secure LAN, I have a dangerous place, because every client running that other OS can spam the place if overrun by malware.”

In other words, “Time is money,” he noted.

Two Reasons

Linux users do pay a Microsoft Tax, Slashdot blogger hairyfeet agreed.

“If you look at the hardware on ANY OEM that sells Linux and compare it to theWindows offerings, you will pay more and get less with the Linux solution,” he told LinuxInsider in an email.

The reasons for that are twofold, hairyfeet added. “One, because Linux runs on less powerful hardware more easily than a MSFT OS, this gives the OEMs the ability to sell their weaker/slower/smaller hardware and make a tidy profit.”

The second reason, hairyfeet added, “is actually NOT due to MSFT, but to companies like Symantec, McAfee and others. They pay the OEM for the right to put trial software on new installs, which helps to supplement the price of the hardware.”

For Linux users, of course, “there really isn’t any money to be made on trial ware, as there is always a free tool that can do the same job, and the Linux buyer is usually more knowledgeable,” he explained. “So, for the OEM, it simply makes more sense to charge more for Linux.”

In short, “it isn’t about enriching MSFT or punishing Linux — as in most things, it is simply about the bottom line,” he concluded.

‘Absolutely Not’

Not everyone agreed, however.

Do Linux users pay a Microsoft Tax? “Absolutely not,” Monochrome Mentality blogger Kevin Dean told LinuxInsider in an email. “It’s kind of amazing to me that people see Microsoft and get all angry but don’t even think about the implications of ‘taxes.'”

Dean builds computers without operating systems. “I don’t pay Microsoft anything in that process,” he noted.

On the other hand, “I’ve never been given the option to ‘not buy,’ say, government-run schools,” which account for some 60 percent of income taxes in most places, Dean said, “and if I try to NOT pay that tax, men with guns come and take my house.

“Microsoft has NEVER done that and, therefore, has never levied any tax,” he added.

‘No,’ but ‘Maybe’

Alternatively: “The short answer is ‘no,’ but the longer answer begins with ‘maybe’,” Slashdot blogger drinkypoo told LinuxInsider.

There are many Linux systems integrators that sell systems preloaded with Linux, and several vendors that sell systems with no operating system at all, drinkypoo noted.

On the other hand, “having to pay for Windows driver development and signing that you’re not using is far more insidious — and dramatically less avoidable,” he added.

‘Things Are Changing’

If nothing else, “the Microsoft tax is getting easier to avoid,” Montreal consultant and Slashdot blogger Gerhard Mack concluded.

“The other day, I walked into a supermarket and found machines with Ubuntu preinstalled placed in a prominent location,” he told LinuxInsider. “Things are definitely changing.”

Ballmer’s comments, it turns out, inspired bloggers to ponder not only the Microsoft Tax; several also wondered if Ballmer were, in fact, admitting defeat in the netbook arena.

‘Is Ballmer Conceding Victory?’

After all, “who’s going to pay extra money just to get the Windows logo on a netbook, when they can get the same features for less with free software … ?” wrote Glyn Moody in the Open… blog.

Along similar lines, Cnet’s Matt Asay asked, “Is Ballmer conceding victory to Linux netbooks?”

Is Microsoft “dying” in the netbook arena? Now that’s a topic sure to whet the appetite of many a Linux blogger.

‘This Guy Needs Hannibal Lecter Restraints’

“Just the other day, I was thinking that the shift in Microsoft’s PR strategy was working, as we’ve seen very little of Steve Ballmer in recent weeks,” wrote seltaeb4 in a comment on Digg.

“Then, I see this. And read the things he said. This guy needs Hannibal Lecter restraints.”

On the other hand: “Linux fan here. Buried for being stupid tech journalism at its worst,” charged Sealbhach.

Once again, we took to the streets for some more insight.

‘Hilarity Itself’

“Steve Ballmer may be the closest thing the corporate world has to Donkey Kong today, but he’s not an idiot,” drinkypoo said. “At least, he’s not a complete idiot — he knows that netbooks are a big part of the future, and if he wants a job, Microsoft needs to be part of that future.”

Microsoft has already “successfully wormed their way into the OLPC project, which puts a very serious crimp in Linux in education,” drinkypoo added. “To assume that Microsoft would give up on Linux on netbooks because of a statement about an alleged $500 Apple Tax is hilarity itself.”

Indeed, “Microsoft cannot afford to give in on the netbook war,” Mack agreed. “More Linux machines mean more users comfortable with Linux and more demand for Linux apps and hardware support. Microsoft also risks finding themselves pinned between Linux on the low end and Apple on the high end, so you can expect them to battle this to the end, even if it loses them money.”

‘Sheer Cluelessness’

Ballmer’s comments didn’t concede anything, Dean agreed. Rather, “Ballmer proved merely that he doesn’t understand why people would want another product. He doesn’t ‘get’ that Apple computers are an experience from the UI to the cardboard box the shiny hardware comes in.”

Microsoft “makes a tiny piece of a generic computer marketplace,” and Ballmer “doesn’t even realize how insignificant his piece is in the grand scheme of things,” Dean added. “Perhaps it’s better that Ballmer doesn’t outright say Linux won. Everything else out of his mouth has been sheer cluelessness, and him mentioning Linux might actually do more harm than good. ;)”

Is Ballmer giving up on netbooks? “Not a chance,” hairyfeet exclaimed. “Is he happy that netbooks exist? Nope, they are a low margin item which they are having to keep XP around for because Vista is too bloated.”

What may give the netbook to Linux “is Steve Ballmer — but not by conceding defeat,” hairyfeet added. “If the rumors are true that Win7 Starter is going to be sold here and it may end up on netbooks, THEN Linux will be a shoe-in. It is going to be the biggest ripoff since Compaq had their motherboards rigged in the early ’90s to run a half volt off so you could only use ‘Compaq RAM’ at 4 times the price.”

‘We Are the World’

Finally, if Ballmer is admitting defeat on netbooks, “it is the only point where he and I agree on anything,” Pogson asserted. “M$ would be wise to get out of netbooks. Otherwise, customers who pay $100+ for that other OS on a large PC will wonder why buyers of netbooks get a discount.”

Netbooks are “an example of what happens when a segment of a market is not locked in,” Pogson added. “A monopoly cannot force that segment to buy. M$ can pay folks to take their stuff temporarily, but it is not a long-term success like they had with the browser wars.”

Put simply, “there is no one to drive from the market with GNU/Linux,” he said. “We are the world. With moves to thin client, virtualization and Web applications, more of the world will not be locked in. Good.”

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