[AccessD] Fw: Customer Focus: Comparing Windows with Linux and UNIX

Rocky Smolin - Beach Access Software bchacc at san.rr.com
Wed Oct 27 22:16:12 CDT 2004


Steve sent me this personal message.  Wanted me to know.  Thought you all 
should as well.

Rocky

----- Original Message ----- 
From: "Steve Ballmer" <steveballmer at ceo.microsoft.com>
To: <bchacc at san.rr.com>
Sent: Wednesday, October 27, 2004 7:34 PM
Subject: 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 
migration?

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 you and other 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.

This email is one in an occasional series of emails from Microsoft 
executives about technology and public-policy issues important to computer 
users, our industry, and anyone who cares about the future of high 
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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 
indemnification."

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 - 
http://www.microsoft.com/windowsserversystem/facts/casestudies/CaseStudy.aspx?CaseStudyID=15528)

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 - 
http://www.microsoft.com/windowsserversystem/facts/casestudies/CaseStudy.aspx?CaseStudyID=15131)

SECURITY

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 
(http://secunia.com/product/2535#statistics_month), 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 
stealthy."

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 - 
http://www.microsoft.com/windowsserversystem/facts/casestudies/CaseStudy.aspx?CaseStudyID=15269)

INDEMNIFICATION

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 
customers.

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 
servers.

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 - 
http://www.microsoft.com/windowsserversystem/facts/casestudies/CaseStudy.aspx?CaseStudyID=15519)

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 - 
http://www.microsoft.com/windowsserversystem/facts/casestudies/CaseStudy.aspx?CaseStudyID=15397)

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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