The e-mail memo was sent last July but leaked this week and
reported in the International Herald Tribune and New York
Times.
According to the newspapers the head of worldwide sales, Orlando
Ayala, sent the e-mail to fellow senior executives. It instructed
that if a sale to a government or institution was falling through
then executives could withdraw from a special fund in order to
discount the software - or even offer it free if that was
needed.
In particular the e-mail stated, “Under NO circumstances lose
against Linux”.
Microsoft has long denied that Linux and the open source
software community are a threat but according to The Register,
Steve Ballmer finally came clean at a meeting in Berlin last
week.
When asked about the attention Microsoft is now focusing on
Linux as opposed to its earlier unconcerned attitude, The Register
reports that Ballmer “simply smiled and responded that 'we were
neither unconcerned nor unaware of Linux; we just tried not to show
it!'”
Microsoft has admitted that it has two funds to support its
approach on Linux. Microsoft spokesman Jim Desler told Reuters
yesterday that one fund dealt with the government and educational
market while the second was used to tackle rivals selling the Linux
system.
Desler called this the “business investment funds." He said: "We
use them in the case of a major competitor - in this case it was
IBM - dropping prices for services consulting and Microsoft
responding with a program to compete."
Discounting by companies in a dominant position can be a breach
of EU competition law if it is carried out to exclude a competitor
rather than on the grounds of sales generation. This may result in
more action against the company from the European Commission which
has been investigating Microsoft since 1998 with a ruling due later
this year.
