[Linux-aus] Microsoft drops prices to compete with Linux on low-cost laptops

Glen Turner gdt at gdt.id.au
Tue May 13 13:09:42 EST 2008

> The worst thing that Microsoft can do to FOSS and Apple is to drop the
> prices to realistic levels and drop the multi version crud.
> Eg. <$100 for Vista Ultimate and <$100 for Office 2007.

Hi Kym,

They seem to be doing that for some market segments. Uni students
can pick up Vista Ultimate and Office 2007 for $150 (see the offers
from time-to-time at www.itsnotcheating.com.au).  Even so, it's
rare to meet anyone in an engineering discipline who uses Windows,
and science uses Linux extensively.

Microsoft partners faced with a Linux-using account can call on
special resources within Microsoft --- there's a team dedicated
to this and they can drop license fees considerably.

I expect Microsoft to continue to pick areas where it faces
competition and use a dramatic reduction in pricing as one of
their responses.

Over time this isn't a great strategy, since as corporates renew
licenses they'll take a long hard look at the sort of deal that
Microsoft is willing to do for everyone but them.

But it buys them time to come up with something better and denies
revenue to their some of their competitors (who need the money more).

I don't count Apple in that category. Apple are succeeding because
they are the only company which makes sexy hardware. So much so that's
this is now just expected of Apple.

I do think they've dropped the ball recently. Normally Apple are
the creator of new market segments, and gains the monopoly revenue
from that. In the lightweight notebook area it's Asus who have
taken Apple's role.  Worse still, the MacBook Air was very late
and the Dell XPS M1330 is a better machine.

Anyway, Apple lives or dies by their hardware. The only software
deal they needed was for Microsoft to continue to provide
Office Mac. Without .DOC support and good .XLS macro support
Apple would never have been able to sell into corporates.
OpenOffice.org is far enough along that Apple need never do that
sort of deal again.

Interestingly, Australia seems to be Microsoft's testing ground
for Linux-competitive strategies at the moment (itsnotcheating,
OOXML, etc).

But even Microsoft's worst isn't that bad.  Linux is here to
stay. Microsoft can either get along with it or not. If it
chooses "not" then Microsoft antagonises its largest customers
(ie, the customers that are currently buy Microsoft's products
that aren't Windows, Office or XBox -- that is, the customers
who buy the high margin products).

Cheers, Glen

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