CyberTech Rambler

July 10, 2008

Divide and Conquer

Filed under: Uncategorized — ctrambler @ 11:41 am

I took no much notice when the web was circulating on the fact that BECTA cannot fulfill a freedom-of-information request on its dealing with Microsoft because it contains commercially-sensitive information. After all, every big deal anyone strike anywhere will have commercially-sensitive information, so why should I care.

In truth, some information deemed commercially sensitive are rather seen as rather stupid. For example the redacted version of Microsoft/Novell’s agreement blackout information about delivery dates which Novell must deliver OOXML compatibility in and the clincher? Those compatibility stuff is going to be open-sourced.

Then I see this The Inquirer article, saying that the sensitive information is price. On itself, nothing new. Business contract usually requires both parties to keep price secret. Even lawsuit gets settled for “undisclosed sums”.

This is the classic “divide and conquer” technique which create an uneven playing field for suppliers and consumers. Most of the time, it is beneficial to suppliers rather than the consumers. Why? Only the supplier has a picture of how the market is for its product. Consumers do not have any market data on to make their decision. [In fairness, under normal market condition, all parties know roughly where the other stands. From a consumer view point, play one supplier against another and you can have a fairly accurate picture of the market. For suppliers, having to bid against the same party over-and-over again will give you a picture of the market as well]

However, lets not forget Microsoft has a monopoly on PC and had abused its dominant position before. EC said that. If Microsoft agreed to an ridicuously low price or insist on bundling as part of the deal for BECTA, or other organizations, then there may be a case for abuse of dominant position, since it put rivals at unfair disadvantage. Consider this: If Microsoft bundle some educational software with Windows/Office, then other vendors of similar educational software will be disadvantaged as it will be more difficult to sell to BECTA. This is similar to Windows Media Player bundling. We cannot know unless the terms of the deal and condition are make public. In the alternative, the deal must be scrutinized by the EC or the monopoly commission. We see none at present.

Sure, BECTA had itself submited complain about Microsoft to the EC. I see this as posturing to secure a better deal in the future, rather than BECTA whole-heartedly believe it had been wronged. I would not be surprise if BECTA goes the way of SUN Microsystem and Real Networks once the complain gains traction.

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