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Will Microsoft Subsidize WinXP For Lindows Buyers?
kinema writes "Ars Technica has an interesting little article about Microsoft's alleged "dumping" of Windows XP. It seems that Microsoft is selling XP through TigerDirect for only US$50 to customers who have purchased a Lindows computer." Note that Tiger says nothing like this on their site (No, you can't buy WinXP for $50 there); Lindows CEO Michael Robertson says (in the linked column) that "Microsoft's latest offers to TigerDirect are extremely lucrative and I wouldn't be surprised if they ultimately cave to Microsoft's pocketbook." PR ploy or reality, you decide.
I recently bought a bare bones, no-OS system from tigerdirect. I later received a survey from them via email that was a thinly veiled survey direct from Microsoft. They offered an $80 gift certificate off the purchase of XP if you filled it out. I filled it out anyway. It basically asked what OS you use, how many computers you have, what word processing program you use, and why (i.e. price, performance, features, etc.)
For several days, the Ars crowd has been discussing this. The discussion is worth reading through
This is what Micheal had to say about microsoft paying off TigerDirect:
After my expose piece on Microsoft last week, I promised one reader that I wouldn't write about Microsoft again for awhile. Unfortunately, I think I have to break my promise and here's why: As I've written about previously, the real key to desktop Linux gaining momentum is to get retailers to sell computers with Linux preinstalled. Sure, some people are smart enough to download software from our web servers then burn a CD and install it, but the majority of people want to buy a computer, plug it in and have it ready to go. Getting Linux computers onto store shelves sounds easy -- what store wouldn't want to stock computers for $200-300? (I just bought a computer for $249 and upgraded the RAM from 128MBs to 256MBs for 30 bucks and it is a solid little performer!) Consumers really want affordable computers and any retailer who stocks them sells large quantities of them. It seems like it would be an easy decision, right?
There's one additional dynamic that comes into the equation - Microsoft's money to discourage retailers who start selling large numbers of LindowsOS computers. Microsoft routinely offers financial inducements to computer companies to not carry LindowsOS computers. With $40 billion in the bank, it's an easy decision for them to use a few million dollars to block Lindows.com from major retailers. Every month that Microsoft keeps their monopoly position, it is another billion or so in profit. You've probably heard rumors of such behavior in the past and maybe you're skeptical because the tales are, not surprisingly, light on facts. So allow me to give you the facts from one such retailer to convince you.
LindowsOS computers have been available from TigerDirect, a popular mail order technology business, run by a savvy CEO, Gilbert Fiorentino. After selling thousands of LindowsOS computers in the last few months, TigerDirect describes their experience with LindowsOS in their most recent catalog, saying they have found it to be "faster, leaner, and more stable than Microsoft Windows," mentioning how "...LindowsOS never crashed, even in extreme testing situations," and then go on to say that they are "more enthusiastic about the LindowsOS than ever."
We've met with TigerDirect in the past and they've remarked what great sellers the LindowsOS computers have been for them and how they were surprised at the demand for Microsoft alternatives. However, at these same meetings, they talked to us about e-mails and phone calls from Microsoft attempting to bribe them to stop selling LindowsOS computers.
While TigerDirect has resisted Microsoft's pressures in the past, recently Microsoft has stepped up orders to their staffers to increase the financial incentives to impede LindowsOS sales at TigerDirect. At some point, Microsoft's monetary inducements become so large that it makes economic sense for just about any retailer to abandon LindowsOS - no matter how many computers they might be selling. TigerDirect is in the business to make a profit and if Microsoft will guarantee them a profit, nobody can begrudge them for taking it.
Microsoft's latest offers to TigerDirect are extremely lucrative and I wouldn't be surprised if they ultimately cave to Microsoft's pocketbook. Microsoft is giving TigerDirect unheard of discounts on Microsoft software, allowing them to sell Microsoft Windows XP for just $50 to all of their customers who have purchased LindowsOS computers. TigerDirect is paying less for some copies of Microsoft Windows XP than even the largest Microsoft customers like Dell. Besides radically discounting their software, Microsoft is agreeing to spend a lot of marketing dollars to advertise their products through TigerDirect and more specifically to past LindowsOS computer buyers. Additionally, Microsoft is paying TigerDirect to collect market research on Li