[Ossm-members] Comparing Windows with Linux and UNIX - pismo od Steve Ballmer do partnerite i mozhnite klienti na MS

Gjoko Jovanovski zlochko at on.net.mk
Thu Nov 11 11:15:13 UTC 2004

Oct. 27, 2004

Customer Focus: Comparing Windows with Linux and UNIX

In the thousands of meetings that Microsoft employees have with customers
around the world every day, many of the same questions consistently surface:
Does an open source platform really provide a long-term cost advantage
compared with Windows? Which platform offers the most secure computing
environment? Given the growing concern among customers about intellectual
property indemnification, what's the best way to minimize risk? In moving
from an expensive UNIX platform, what's the best alternative in terms of

Customers want factual information to help them make the best decisions
about these issues. About a year ago, a senior Microsoft team led by General
Manager Martin Taylor was created to figure out how we could do a better job
helping customers evaluate our products against alternatives such as
Linux/open source and proprietary UNIX. This team has worked with a number
of top analyst firms that have generated independent, third-party reports on
cost of acquisition, total cost of ownership, security and indemnification.
Some of the studies were commissioned by Microsoft, while others were
initiated and funded by the analysts. In each case, the research
methodology, findings and conclusions were the sole domain of the analyst
firms. This was essential: we wanted truly independent, factual information.

At the same time, our worldwide sales organization is going even deeper with
customers to understand their needs and create a feedback loop with our
product development teams that enables us to deliver integrated solutions
that support real-world customer scenarios, and comprehensively address
issues such as manageability, ease of use and reliability.

I'm writing to business decision makers and IT professionals today to share
some of the data around these key issues - and to provide examples of
customers who opted to go with the Windows platform rather than Linux or
UNIX, and how that's playing out for them in the real world. Much more
information on this is at www.microsoft.com/getthefacts.

Total Cost of Ownership and Acquisition Costs

In the past few years, you haven't been able to open a computing magazine or
visit a technology Web site without running into an article about Linux and
open source. Not surprising: who doesn't like the idea of a "free" operating
system that just about anyone can tinker with?

But as the Yankee Group commented in an independent, non-sponsored global
study of 1,000 IT administrators and executives, Linux, UNIX and Windows TCO
Comparison, things aren't always as they seem: "All of the major Linux
vendors and distributors (including Hewlett-Packard, IBM, Novell [SUSE and
Ximian] and Red Hat) have begun charging hefty premiums for must-have items
such as technical service and support, product warranties and licensing

Yankee's study concluded that, in large enterprises, a significant Linux
deployment or total switch from Windows to Linux would be three to four
times more expensive - and take three times as long to deploy - as an
upgrade from one version of Windows to a newer release. And nine out of 10
enterprise customers said that such a change wouldn't provide any tangible
business gains.

Yankee also noted that, for larger organizations with complex computer
networks, it's important to look beyond Linux's initial low investment cost
and consider all of the TCO and ROI factors.

This is exactly what one of our large enterprise customers, Equifax, did
recently. Equifax, a $1.2 billion U.S.-based enterprise with 4,600 employees
in 13 countries, needed more computing power than its mainframe systems
could deliver for rapidly searching the company's vast marketing database.
They spent several months conducting an internal analysis, which proved
that, compared with Linux, Windows would realize a 14% cost savings and
shorten their time to market by six months. (Equifax Case Study)

Another comprehensive, non-sponsored study by Forrester, entitled The Costs
and Risks of Open Source, drew a similar conclusion: "The allure of free
software is accelerating the deployment of open source platforms, but open
source is not free and may actually increase financial and business risks."

In early 2004, Forrester conducted in-depth discussions with 14 companies
that had been running Linux platforms for longer than one year to see what
the costs really were. Several key themes emerged:

    * Few companies know what they're really spending. Only five of the 14
kept detailed metrics - and each of those five found Linux more expensive
(5% to 20%) than their current Microsoft environments.
    * Preparation and planning activities took 5% to 25% longer for Linux
than Windows.
    * Training for IT employees was significantly higher for Linux than for
Windows - on average, 15% more expensive. The reasons: training materials
were less readily available, and customers spent more on training to
compensate for the lack of internal knowledge about Linux.
    * All 14 companies said it was difficult finding qualified Linux
personnel in the marketplace to support their Linux projects. When they did
find third-party help, they had less leverage negotiating hourly rates than
with Windows consulting resources.

One of our mid-market customers, Computer Builders Warehouse (CBW), came to
a similar conclusion. CBW builds computers to order for education,
government, and corporate customers. Several years ago, it deployed Red Hat
and Mandrake versions of Linux to support its corporate, retail and
e-commerce applications. Challenged with high costs, CBW subsequently
migrated to Microsoft Windows Server System, and reduced its total cost of
ownership by 25 percent. It also consolidated its server population by 50
percent, reduced maintenance time by 50 percent, and boosted developer
productivity by 200 percent. These benefits - totaling $650,000 in savings -
are dwarfed by the millions of dollars in new revenue that CBW expects as a
result of bringing a key security and monitoring product to market more than
two years faster than it could have done using Linux. (CBW Case Study)


About three years ago, we made software security a top priority, and since
then we've invested heavily in a multi-pronged effort to improve software
quality and development processes, and to reduce risks for customers through
education and guidance, industry collaboration and enforcement. I think it's
fair to say that no other software platform has invested as much in security
R&D, process improvements and customer education as we have at Microsoft.

Still, Linux has often been touted as a more secure platform. In part, this
is because of the "many eyeballs" maxim of open source software that claims
a correlation between the number of developers looking at code and the
number of bugs found and resolved. While this has some validity, it is not
necessarily the best way to develop secure software. We believe in the
effectiveness of a structured software engineering process that includes a
deep focus on quality, technology advances, and vigorous testing to make
software more secure.

A number of third-party reports have questioned how safe the Linux platform
really is. For example, a recent independent study by Forrester, Is Linux
More Secure than Windows?, highlighted that the four major Linux
distributions have a higher incidence and severity of vulnerabilities, and
are slower than Microsoft to provide security updates.

According to Forrester, Microsoft had the lowest elapsed time between
disclosure of a vulnerability and the release of a fix. They found that
Microsoft addressed all of the 128 publicly disclosed security flaws in
Windows over the 12-month period studied, and that its security updates
predated major outbreaks by an average of 305 days.

Other independent sources of data show similar conclusions. According to
statistics posted on the security Web site Secunia, Red Hat Enterprise Linux
3 has averaged 7.4 security advisories per month, compared with 1.7
advisories for Windows Server 2003.

And as Yankee Group noted in its Linux, UNIX and Windows TCO Comparison
study, "Linux-specific worms and viruses are every bit as pernicious as
their UNIX and Windows counterparts - and in many cases they are much more

This was a deciding factor in farmaCity's selection of Windows over Linux.
Headquartered in Buenos Aires, farmaCity is a rapidly growing Argentinian
drugstore chain with 50 outlets and 1,200 employees. Although farmaCity's
growth in recent years was a testament to its success, the company's aging
technology infrastructure had become a hindrance to further expansion. After
careful analysis, farmaCity concluded that Windows would reduce network
administration by 30 percent compared with Linux, and would also simplify
identity and desktop management. But the core reason for selecting Microsoft
was the increase in network security, complemented by the ability to reduce
patch-deployment time by 50 percent while cutting unsolicited e-mail by
half. (farmaCity Case Study)


Increasingly, we're hearing from customers that another factor in their
consideration of computing platforms is indemnification. In 2003, we looked
at our volume licensing contracts to see what we could do to increase
customer satisfaction, and a top issue we heard about was patent
indemnification, which then was capped at the amount the customer had paid
for the software. So later that year, we lifted that cap for our volume
licensing customers, who are most likely to be the target of an intellectual
property lawsuit.

Today, when a volume licensing customer - a business or organization ranging
from as few as five computers to many thousands - licenses a Microsoft
product, we provide uncapped protection for legal costs associated with a
patent, copyright, trademark or trade secret claim alleging infringement by
a Microsoft product. We do this because we are proud to stand behind our
products, and because we understand that being on the wrong end of a
software patent lawsuit could cost a customer millions of dollars, and
massively disrupt their business.

No vendor today stands behind Linux with full IP indemnification. In fact,
it is rare for open source software to provide customers with any
indemnification at all. We think Microsoft's indemnification already is one
of the best offered by the leading players in the industry for volume
licensing customers, and we're looking at ways to expand it to an even
broader set of our customers. It's definitely something businesses want to
think about as they're building or expanding their IT infrastructure.

It was certainly a factor for Regal Entertainment Group, the largest movie
theatre chain in the world. In 2001, they moved to Red Hat Linux. After
evaluating Linux in their business for several months, however, they
migrated to the Microsoft platform - not only because of lower TCO, stronger
support and services, and greater reliability and manageability, but because
they were more fully indemnified on IP. J.E. Henry, CIO of Regal
Entertainment, told me that "reduced risk was a decision factor in selecting
Windows over Linux. We needed to minimize our exposure to the distraction of
potential IP infringement claims, and we had a big enough open source
presence to be concerned. With the way that Microsoft stands behind its
products, it's one less thing that I have to worry about."

UNIX Migration

One of the hot topics among enterprise IT and business decision makers today
is the costs and benefits of migrating enterprise resource planning systems
(ERP) from costly, proprietary UNIX environments to Windows or other
platforms. ERP integrates various company functions such as human resources,
inventories and financials, and links a company to its vendors and

An independent, qualitative survey of organizations that recently completed
a migration of their SAP or PeopleSoft ERP system from a UNIX environment to
the Microsoft Windows Server platform found a more than 20% reduction in the
number of servers required compared with UNIX. The survey, by META Group,
found that in one large telecommunications company, consolidation on Windows
allowed a greater than 50 percent reduction in the number of required

The survey also found a more than 50 percent improvement in areas such as
reliability, accessibility and scalability; significant savings in cost
management, IT staffing, performance monitoring and vendor management; and
measurable savings in technical support and training. More than half of
business function decision makers also saw significant improvements in areas
such as consistency, accuracy, reporting enhancement and performance.

"Windows is now a mainstream option for the vast majority of ERP projects,"
META Group concluded.

A great case study is the Raiffeisen Bank Group, the largest private bank
group in Austria with about 2,600 branches. It wanted to reduce costs and
provide better customer service by consolidating the number of servers in
its branches by 50 percent. Raiffeisen investigated migrating from UNIX to
either Linux or Windows. After evaluating the possible solutions, the
company found that Windows Server 2003 would provide the most economical
solution along with better performance, while giving bank employees an
integrated view of customer information that they needed to improve customer
service. (Raiffeisen Bank Group Case Study)

One of our mid-market customers had a similar experience. Grand Expeditions
is a consortium of luxury travel companies that significantly reduced its
Web development and hosting costs, and improved site reliability and
performance, by moving from a combination of Linux- and UNIX-based servers
to Windows Server 2003 and the Windows Server System. The new system was up
and running in just 60 days, and is saving Grand Expeditions $200,000 a
year. (Grand Expeditions Case Study)

In Closing...

There is no question that customers are benefiting today from a healthy,
competitive IT industry. Competition requires companies to really focus in
on what customers want and need. At the same time, customers have a clearer
opportunity than ever before to evaluate choices.

For example, BET.com, the Internet portal created by Viacom subsidiary BET
Networks, did an in-depth comparison of Red Hat Linux and Windows Server
System. They found that Windows offered 30% lower TCO, was more secure and
reliable, and enabled quicker time to market. As BET.com's CTO, Navarrow
Wright, said: "When I looked at all the costs - not just the straight price
of software - a Windows Server System-based solution made better financial
sense than sticking with our Sun and Oracle environment or switching to
Linux. We decided to migrate the whole enterprise from various software
vendors to standardize all of our software on Microsoft."

By implementing Windows Server 2003, Windows XP Professional, Office
Professional Edition 2003, Exchange Server 2003, Content Management Server
2003 and Visual Studio .NET 2003, BET.com conservatively estimated that its
workforce will increase productivity by 25-30%, while saving significantly
in licensing and redevelopment costs.

As organizations increasingly rely on IT to perform mission-critical
functions, and with complexity a growing challenge, choosing the right
computing platform for the long term can make the difference between profit
and loss, and between future success and failure. And it's pretty clear that
the facts show that Windows provides a lower total cost of ownership than
Linux; the number of security vulnerabilities is lower on Windows, and
Windows responsiveness on security is better than Linux; and Microsoft
provides uncapped IP indemnification of their products, while no such
comprehensive offering is available for Linux or open source.

The vision and benefits of an integrated platform are what distinguish
Microsoft's approach to software. The Windows platform today offers an
unmatched level of value, applications availability, simplicity, security
and productivity. For Microsoft, this is truly a cross-company effort that
requires the server and client operating systems to seamlessly deliver great
usability and manageability features, applications that deliver compelling
scenarios, and tools that enable developers and ISVs to easily and quickly
build new applications on the platform.

It's important that customers have all the information they need when making
critical and expensive IT decisions. If the evidence at our
www.microsoft.com/getthefacts Web site doesn't sufficiently convey the
benefits and value of the Microsoft platform, we want to hear from you so we
can work even harder to get that information to you. If you would like to
have a more detailed discussion about your company's IT needs, email Martin
Taylor at martinta at microsoft.com.

Steve Ballmer

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