Windows pricing for OEM : unfair advantage

[CougTek]

I came across an article at Ars Technica giving hints about the price of each Windows license Microsoft charges to OEMs. For me, a small computer seller, it's revolting. That gives them such a tremendous advantage over me in the low-end market that it's completly unfair. I must pay some 100$ more than they do for a 500$ computer. How can I make money under these circumstances?

Of course, I could target only mainstream and higher-end markets, but since two-thirds of the sales occur in the low-end, less-than-500$ segment, I better quit right now.

This is unfair, completly unfair. I could understand a 20%-30% advantage for them due to volume, but paying less than a third of what I have to pay, that's :bibber:. Reading this incites me to do a Michael Douglas in Falling Down day.

 

[timwhit]

You could start selling computers with a Linux distro installed. Your licensing fees will then be 0.

 

[MaxBurn]

Does some of the lower price factor in that they don't have to support it, the OEM supports it? Seems the OEM copies are still bundled with a support option.

Funny this hasn't come up as a monopolistic behavior. Think that's only because the alternatives are either free or not able to be purchased separately?

 

[Mercutio]

My understanding is that MS charges tier-1 OEMs $20 - $30 for Vista right now. I can match the total machine price but any attempt on my part to earn a profit on hardware is going to kill the sale. So I don't even try. I round up to the nearest $10 and that's what I charge.

Probably 85% of the systems I sell are less than $500 though oddly enough I've put together about a dozen i7s now. The segment that's missing for me is the $500 - $1000 system.

 

[CougTek]

Does some of the lower price factor in that they don't have to support it, the OEM supports it? Seems the OEM copies are still bundled with a support option.

I would gladly take care of the support (I already do, people can't understand that I'm not the one responsible for the OS's mess) if MSFT would provide me with 30$ licenses.

As for Linux, I tried to offer it, but no one here is interested. Many still pay for MS Office while OpenOffice could do everything they need simply because they feel more familiar with the expensive Microsoft suite. People not wanting to learn new softwares is the main reason why I still sell WinXP on the tremendous majority of my systems.

 

[MaxBurn]

Hmm, seems students can get win7 home premium for $30.

http://windows7.digitalriver.com/st...=gkx-2QoBAkgAAF7YfhUAAAA@&rests=1253234988022

 

[Mercutio]

"Real" schools here get Office and Windows for $10 through a technology sharing agreement. That's one of the ways I deal with putting together cheap computers, since I put together a lot of machines for college kids.

 

[CougTek]

That's great...if you live in the States. The rest of the world is left out in the cold.

 

[Mercutio]

Coug, I'll trade you in a heartbeat. You get unabashed pluralistic culture, a functional economy and a working health care system, and our college kids can buy Windows for $10 if they go to a state-funded school.

I think you win.

 

[timwhit]

Coug, I'll trade you in a heartbeat. You get unabashed pluralistic culture, a functional economy and a working health care system, and our college kids can buy Windows for $10 if they go to a state-funded school.

I think you win.

Their weather is worse than our's though.

 

[ddrueding]

Their weather is worse than our's though.

And you are in Chicago. That is saying something. (70C and sunny, thanks)

 

[Mercutio]

That's only an issue for people who think that "going outside" means doing something other than walking 10 feet between a door and a car.

 

[ddrueding]

In anything less than 0F I don't even want to do that.

 

[CougTek]

That's only an issue for people who think that "going outside" means doing something other than walking 10 feet between a door and a car.

Oh no, here you don't go 10 feet between your door and your car. You open your door and you shovel the first two feet of snow that got blown off to your door. Then you walk another 6 feet and you shovel the whole two feet of snow that the sky shitted on every side of your damn car.

 

[Mercutio]

I have that here, too, except that my apartment complex usually takes care of the bit by the door before I wake up.

 

[sechs]

Just get attached garages people.

 

[LunarMist]

After that you still need to clear off the driveway.

 

[Stereodude]

Just get attached garages people.

You usually still have to get out of the car once you drive somewhere. :thumbright:

 

[timwhit]

I don't drive to work. So, I walk to the train and then walk to the office when I get downtown. I do this even when it's below 0F and when there is 6 inches of snow on the ground. No one bothers to shovel their sidewalks here, so the snow gets packed down into some really slippery ice after a couple days.

 

[Howell]

What is this snow you speak of?

Sorry, I don't really have a suggestion for the software pricing.

 

[sechs]

After that you still need to clear off the driveway.

Put the garage on the street.

 

[Stereodude]

Put the garage on the street.

Good luck with the building code on that one. :aok:

 

[MaxBurn]

Here's a plus for the small seller, looks like you can sell it with blessing early:

http://www.pcworld.com/article/172690/microsoft_oks_early_windows_7_pc_sales.html