Does Microsoft Charge too Much for it's Software?

Hi All,

I run a Service & Support company, which deals mostly with the SME market place.

When speaking with customers and they want Office 2003 and you tell them it's going to cost £320 the response is, "how much!"

So when your talking £320 x 5 or £320 x 10 that's alot of cash for a small company to swallow.

You would think that Volume Liecensing would be the answer, it's not for this number of PC's it works out more expensive!

Now, this is what is odd. Microsoft Small Business Server 2003 is great value for money! £800 for Windows Server 2003, ISA Server 2004 and Exchange 2003 with 5 CAL's!

So why can't it be done with other software, as they have gained that market?

One of the highest cost's on a new basic office PC today (not high spec!) is the OS so why not sell it for £49.99? instead of £89.99 (oem).

I agree it cost's money to develop software, but with office isn't 80-90% of the product done? Do they have to charge as if they were writing it from the start each time.

Don't get me wrong, I like MS and the software the produce, I want to sell more of it, but when your trying to sell a £320 to someone who can "get it of there friend" for £2, what do you do? Shop them and loose the customer and put myself out of business?

I do encourgae legal software usage, but it's hard at these prices.

What do you think?

Supply and demand

Honest question: why would the average customer choose to buy commidity software from a middleman, versus going to Costco/doing usability studies in Redmond/etc. ?

At my workplace we have authorized middlemen that sell hardware and services on behalf of Dell et. al.  We save many thousands of bucks by ignoring them and hot-dealing it on newegg and Dell Small Business.

answering the question another way, no, I don't think microsoft charges too much at all, esp. compared with the practice of its competitors.

Consider OSs: Apple OSX has gone through four releases in the time xp has been released; I'd qualify at least one of those releases as a "paying beta". Apple has charged users for most of the upgrades. In the same period WinXP has been significantly revised several times; each of the upgrades have been free. I'm happier buying my OS once rather than three or four times.

Even at a few hundred bucks, Office seems like a decent deal to me: you're getting five or six well-developed applications, and you tend to use them every day for years.

We get SQL Server on academic discount at my workplace; even so, I'd pay the ~$2000 retail willingly if we had to. When I started using SQL Server in 2001, it was tens of thousands of dollars cheaper than competitor products.

ASP.NET 2 -- the app platform -- is free, and Microsoft just got finished giving us free full copies of SQL Server 2005 and VS.NET 2005.

Some of us really like the quality and consideration that goes into Microsoft's developer stuff. The fact that its much more affordable than competitor products is gravy.

-KF

kenfine wrote:

answering the question another way, no, I don't think microsoft charges too much at all, ...

You say that because you live in the US and not in Europe. There is a big difference for no reason at all.

all software is priced to high.


But this is what the market accepts.  But  MS is having problems getting companies to upgrade on Office and Exchange servers are prime examples.

So the price to benefiet ratio is out of whack of a few products

You can get volume licensing for as few as 5 total copies of Office or Windows (all together 5, not 5 each).
http://www.microsoft.com/licensing/default.mspx
The site doesn't go into actual pricing as much, but you can get a better price there.  Or, buy from someone like NewEgg who sell OEM versions.  Again, cheaper.

ZippyV wrote:

You say that because you live in the US and not in Europe. There is a big difference for no reason at all.

You're right, I'm answering from my own experience. Regarding the EU: are there reasons for higher prices? One cause might be higher European taxes. Another might be Microsoft trying to avoid running afoul of EU restrictions regarding "undercutting" what is the accepted market price for software.

Is all software more expensive in the EU, or just Microsoft's?

DoomBringer,

This is one thing i hate about MS volumne Pricing and SA, when you try to find prices they are super vage and don't tell you a darn thing other than how great it is.

Priced all this crab out a few times a couple of years ago and the prices where almost twice as high as buying it out right  and sense MS has historical record of not meeting ship dates,  I start to wonder how many times  do I have to pay for the same product...

SQL went almost 6 years between updates.  Realisticaly the Server and Clinet OS has had no major upgrade and its going to be  6 or may be 7 years. 

Win2003 was a minor upgrade with no real reason to upgrade.  It was to fill the gap in products till longhorn Server shows up.  XP is nothing more than W2K with makeup...  There is no real pressing reason to move workstations....

Please try to understand i'm looking at as simply dollar bills. 

Software Assurance (SA) is nothing more than MS trying to increase and level out their revenue stream.  Its a neat idea on paper and makes sense if MS delievered product updates on regular schedule that are got haves and soloves pressing problems.. 

the Only truely useful feature in WinServer 2003 was the default lock down but that does not justify moving servers Sense any decent IT staff would have already locked down W2K Server

I would have felt pretty jaded if i brought SA. 

What I'd actually like to see, would be for Microsoft to sell each component of Office seperately. For those of us that only mainly use Word, it seems like a waste to buy all of the others. I've never created a Powerpoint presentation and I use the free 2003 Powerpoint Viewer to actually view them (thanks Microsoft for writing that ). I've occassionally opened up Excel to look at the odd spreadsheet now and then or churn out the odd graph or two. I've never run Access, and doubt that I ever will.

Naturally, the full Office suite would be provided as a bundle, cheaper than buying each component individually, so those that actually use all of it are happy as well.

Course, I'm perfectly happy still with Office 97, so if they already do this, I plead ignorance as I haven't looked to buy Office since then.

zzzzz wrote:

DoomBringer,

This is one thing i hate about MS volumne Pricing and SA, when you try to find prices they are super vage and don't tell you a darn thing other than how great it is.

Priced all this crab out a few times a couple of years ago and the prices where almost twice as high as buying it out right  and sense MS has historical record of not meeting ship dates,  I start to wonder how many times  do I have to pay for the same product...

SQL went almost 6 years between updates.  Realisticaly the Server and Clinet OS has had no major upgrade and its going to be  6 or may be 7 years. 

Win2003 was a minor upgrade with no real reason to upgrade.  It was to fill the gap in products till longhorn Server shows up.  XP is nothing more than W2K with makeup...  There is no real pressing reason to move workstations....

Please try to understand i'm looking at as simply dollar bills. 

Software Assurance (SA) is nothing more than MS trying to increase and level out their revenue stream.  Its a neat idea on paper and makes sense if MS delievered product updates on regular schedule that are got haves and soloves pressing problems.. 

the Only truely useful feature in WinServer 2003 was the default lock down but that does not justify moving servers Sense any decent IT staff would have already locked down W2K Server

I would have felt pretty jaded if i brought SA. 

Yeah, I wasn't able to find concrete prices in my 2 minute browsing experience.  In the past, I know I was interested in the 5 total copies thing, but I can't figure it out anymore.  I'll stick with NewEgg and OEM copies.
I disagree about Win2k3, especially on how much stuff there is in there for managing corporate networks.  2k3 really is inappropriate for use as a desktop, if anything, based on its price.  A lot of the power is under the hood, for sure.

andur wrote:

What I'd actually like to see, would be for Microsoft to sell each component of Office seperately. For those of us that only mainly use Word, it seems like a waste to buy all of the others. I've never created a Powerpoint presentation and I use the free 2003 Powerpoint Viewer to actually view them (thanks Microsoft for writing that ). I've occassionally opened up Excel to look at the odd spreadsheet now and then or churn out the odd graph or two. I've never run Access, and doubt that I ever will.

I think it was like that until Office 2000, as far as I know.

No, pricing is about right.

On a side note: if I recall correctly, in every market Microsoft enters the price of software drops. Except, of course, where its competitors are free. Like most open source.

reinux wrote:

I think it was like that until Office 2000, as far as I know.

And I thought they still do.

It's just a horrible idea. Pricing way too high/etc.

blowdart wrote:

kenfine wrote: Is all software more expensive in the EU, or just Microsoft's?

Pretty much all software and hardware. And it has nothing to do with taxes, or regulation, but simply that most companys STILL set European prices at $1=1€

(OK hardware has a bit to do with tariffs, but not much)

Even if you drop the difference between $ and € there is still a big difference:

Kryptos wrote:

Now, this is what is odd. Microsoft Small Business Server 2003 is great value for money! £800 for Windows Server 2003, ISA Server 2004 and Exchange 2003 with 5 CAL's!

Last year, I entered the Imagine Cup and I won this package. It was sent to me from the US and the price tag was still on it: Windows Small Business Server 2003 Premium with 5 Cal - 500$

The difference between 500$ and 800 £ is 903.72 $!
1 GBP = 1.75465 USD

reinux wrote:

andur wrote: What I'd actually like to see, would be for Microsoft to sell each component of Office seperately. For those of us that only mainly use Word, it seems like a waste to buy all of the others. I've never created a Powerpoint presentation and I use the free 2003 Powerpoint Viewer to actually view them (thanks Microsoft for writing that ). I've occassionally opened up Excel to look at the odd spreadsheet now and then or churn out the odd graph or two. I've never run Access, and doubt that I ever will.

I think it was like that until Office 2000, as far as I know.

Microsoft Word 2003 is still availible as retail box ( around $125,-) , but it is not cheap. I dunno if there is a OEM version of it.

It's a bit expensive if you are buying a pc (which is when most people buy a new office pack I assume), for around $140 you can get office basic 2003 (Word,Excel,Outlook) with your pc.

I personly think the biggest problem with office is that most people don't got a clue of what they really need, they only know what they want. Some people buy office, while they basicly could perfectly work with worksuite 2005 and some office viewers. A package which is a lot cheaper, but still they want office because they might once need to make a shopping list in excel or something like that.

If you buy windows together with your pc (OEM) like most people do, it is not that expensive at all. For that 100 euro you might be able to let some person from the shop install your pc at home, together with the wireless network and some explaining of how everything works, a 2hour job. That windows will serve you a lot longer that that 2 hours (mostly). It's amazing that the most people that buy a pc and complain about the price of windows or office are still able to buy a video card of 400 euro with no complaning.

If you buy a upgrade (retail box) a 130 euro, not expensive.
If you buy a full version (retail box) a 300 euro, you might consider in just buying a new pc.

btw. this is just a view for home users.

ZippyV wrote:

blowdart wrote: kenfine wrote: Is all software more expensive in the EU, or just Microsoft's? Pretty much all software and hardware. And it has nothing to do with taxes, or regulation, but simply that most companys STILL set European prices at $1=1€ (OK hardware has a bit to do with tariffs, but not much)

Even if you drop the difference between $ and € there is still a big difference:

Kryptos wrote:Now, this is what is odd. Microsoft Small Business Server 2003 is great value for money! £800 for Windows Server 2003, ISA Server 2004 and Exchange 2003 with 5 CAL's!

Last year, I entered the Imagine Cup and I won this package. It was sent to me from the US and the price tag was still on it: Windows Small Business Server 2003 Premium with 5 Cal - 500$

The difference between 500$ and 800 £ is 903.72 $!
1 GBP = 1.75465 USD

Either America is going through a depression, or they are ripping Europeans off. It should cost the same (I can't believe taxes would put the price up by that much). I think they make the CD/DVD's in Ireland, so shipping wouldn't be the reason for the markup.

Of course it is the same for all imports from the US. iPod: $299.99 or £209.99 (should be £170, so £40 markup). I think there is a similar difference with the Xbox 360 (but that just means they lose less when selling in Europe - but they lose more in Japan, thanks to the lack of interest).

ZippyV wrote:

kenfine wrote: answering the question another way, no, I don't think microsoft charges too much at all, ...

You say that because you live in the US and not in Europe. There is a big difference for no reason at all.

Um...the 'reason' you are looking for can be found with your governmental leadership.  Perhaps if they spent less time suing the crap out of MSFT for including a media player, MSFT wouldn't HAVE to charge so much for fear of being called 'anti-competitive'.

Write to your congressman (or whatever wacky equivalent exists over there...MP I think it is).