Microsoft to Sell PCs, Starting in India

kripkenstein writes "According to an Ars Technica report Microsoft will begin selling complete PCs, for the first time in the company's history. The program is aimed at customers in India. 'Dubbed the IQ PC, the machines will cost RS21,000 (about $525), are manufactured in partnership with Zenith, and will sport AMD Athlon CPUs. ... In some ways, the move to sell hardware is a natural extension of Microsoft's low-cost Windows initiative ... It may also be a response to projects like Intel's Classmate PC and the OLPC XO.' The Ars Technica summary is careful to state that they seriously doubt this will lead to Microsoft selling PCs in the US, yet the question must be asked: After Microsoft mice and keyboards, then the XBOX and Zune, Microsoft is increasingly becoming a hardware vendor. Is it only a question of time before Microsoft starts to compete directly with the likes of Dell and HP?"

Comments

oh but of course

[bmecoli]

I mean the best place to sell PCs would be the place where all the tech support is, right?

Re:oh but of course

[sconeu]

And this is the argument as to why MS won't sell PCs in the US.

They won't be able to foist off level 1 tech support onto the vendor, as *they* would be the vendor.

Re:oh but of course

[Rob T Firefly]

You would think so, but it turns out the Indian customers' tech support line will be answered by some underpaid guy in New York who speaks broken Hindi with a Brooklyn accent.

Good for them...

[chris098]

This really is just an extension of Microsoft's business model. From the article:

Aimed primarily at students...

If they can get students hooked to MS products when they're young, especially in these developing countries where the alternative may be Linux, then it's likely these students will continue using Microsoft later on in life, because they're familiar with it. It's a clever move, and really, I'm surprised it took Microsoft so long to start doing this.

Re:Good for them...

[Spy der Mann]

This really is just an extension of Microsoft's business model.

Yeah, but shouldn't they change their name from Microsoft to Microhard ?

Um... wait... nevermind.

All the more reason for Dell to sell Linux

[slazzy]

Time for hardware vendors to start selling more PCs preloaded with Linux. Why sell Windows when Microsoft is your competition?

Re:All the more reason for Dell to sell Linux

[CastrTroy]

Seriously. It's not a good idea for MS to mess with their distribution channel. With Dell starting to see Ubuntu, it's not a good idea to give the vendors and more reason to push Linux on their customers.

Emulating Sun and Apple

[Ngarrang]

Sun and Apple have made quite a good bit of business with this model. I am more surprised that Microsoft did not try this years ago.

Re:Emulating Sun and Apple

[shaitand]

'Sun and Apple have made quite a good bit of business with this model. I am more surprised that Microsoft did not try this years ago.'

I'm not, Microsoft's profits have dwarfed those of Sun and Apple combined and have relied on NOT doing this. Don't you think Microsoft selling PC's without paying themselves any licensing costs is going to have the likes of Dell and HP jumping the Microsoft ship faster than you can blink?

You would have to be crazy to promote windows when Microsoft has an inside edge on windows that assures nobody will have a computer that runs as well as those from Microsoft. Microsoft can do anything they want, including intentionally altering windows in ways that will cause it to misbehave on competitor hardware. This is a conflict of interest so glaring that is insane.

MS might get away with India... or not if the hardware companies are bright. But if MS takes this very far you will see a great deal more HP and Dell support for Linux and customization of Linux to work perfectly with their own hardware.

Re:Emulating Sun and Apple

[Hawthorne01]

They did. It did ok overseas, not so well in the U.S.

For Years Microsoft has been neutral to OEM's

[number6x]

For Years Microsoft has been neutral to OEM's. Could this move drive a further wedge between leading PC vendors and MS?

Is it a sign that Microsoft understands it cannot require OEM's to stop from selling alternate OS's and must enter the PC market itself?

Or is MS just licensing its brand name to go on the outside of the computer and making money for very little cost (something MS is good at)?

anti-piracy commoditization

[Speare]

It's simple, really. If the market doesn't see software as a product, but rather sees software as inseparable or an ephemeral customization of the hardware "appliance," then the only way to make a profit on software is to bundle it and make profits on the hardware it's installed.

Rarely do people copy a completed MS Word installation from one machine to another. They copy an installer. If there's no installer, there's one piracy vector down. If all the machines have equal deployed software images, that's another piracy vector down. However, if all the machines are alike, but some don't come with the Office and some do, will they start to copy those post-install files and try to get them to work anyway?

Re:Not Dell and HP...

[Intron]

HP used to be very competent in a small set of areas: the Alpha chip, Tru64 Unix, etc. Realizing that, they killed off those products. Now they are equally competent in all areas.

Wintel?

[Brian Gordon]

What happened to the MS/Intel alliance of old? Microsoft getting annoyed at Intel making chips for Apple?

Re:Wintel?

[EjectButton]

What happened to the MS/Intel alliance of old? Microsoft getting annoyed at Intel making chips for Apple?

Apple has nothing to do with this, Intel is fairly opportunistic and they see there is a significant potential for Linux growth over the next few years and having Intel hardware be the hardware of choice due to superior driver support can only help them. They have traditionally provided fairly good hardware support for Linux on the server side of things for obvious reasons, it appears that this is now being pushed out to more desktop/notebook oriented hardware. Most likely in anticipation of desktop Linux growth, especially in the corporate/government universe.
As far as a MS/Intel alliance, there has not been one to speak of for several years now. It's not that Intel is above collusion or dirty tricks, for example there was that deal they struck with Skype a while back trying to get Skype crippled on AMD processors. It's just that Intel, and many other hardware companies have felt for years that Microsoft is holding them back.

From Microsoft's perspective they have been in a position where most computer users in the world have to pay them a "Microsoft tax" if they want to or not, so the less things change the better because any radical hardware or usage changes (the internet) can only hurt Microsoft rather than help them. This clashes with the goals of most hardware companies, which are to one-up the other hardware companies and crank out new hardware revisions constantly to keep people in the habit of upgrading every year. Graphics processor capabilities have been advancing at an incredible rate the last few years, this is largely because gamers are constantly looking at upcoming games and thinking to themselves "man I'm going to need a new video card when that comes out". What would be an equivalent event for replacing the rest of the hardware in the computer? Perhaps the release of a new operating system, though this doesn't really work when it takes Microsoft 5 years and lots of delays between each version of Windows with only marginal changes, most of which have scared the corporate/government customers away from upgrading.

There has been bad blood between Intel and Microsoft for many years now, if you want further evidence here is an interview from late 2005 with Avram Miller Intel's "Vice President and Director of Corporate Business Development" from 1984-1999 http://www.pbs.org/cringely/nerdtv/transcripts/008 .html

Avram:I think another problem was the company was, I think, intimidated by Microsoft. It's easy to be intimidated by Microsoft. Microsoft is intimidating. And I think that many times Intel would have liked to have done something, but Microsoft didn't like it and Intel was basically a little bit afraid of Microsoft.

Bob: I talked to an Intel guy who told me that they were Microsoft's bitch.

Avram: Well, that might be a way to describe it. I wouldn't describe it exactly like that. One of the issues in this was that if you're a software company, you're used to selling upgrades. There really isn't an upgrade for a micro-processor. So, you need to try to push faster and faster the applications that use the power. And in the beginning, the companies were more aligned that way, but over time, they became less aligned that way.

Here is an example from another former Intel executive who testified against Microsoft in the anti-trust trial http://en.wikipedia.org/wiki/Steven_McGeady

* McGeady testified that Microsoft feared competition from Intel's software development: At an August 2, 1995 meeting Bill Gates allegedly threatened to terminate Windows support for Intel's new microprocessors unless they were able to "get alignment" between Intel and MS on Intel's Internet and communications soft

All directions at once

[glas_gow]

Microsoft is simultaneously going in all directions, which is identical to going nowhere fast.