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Microsoft pricing: You were warned

Nov 04, 20022 mins
Enterprise ApplicationsMicrosoft

We have met the enemy, and he is us.”– Walt Kelly,

Given that almost all technology companies are reporting less-than-expected revenue and earnings, Microsoft stands out with its report for the quarter ended Sept. 30. Stands out like a sore thumb.

The company reported record-high revenue. Now a lot of Microsoft’s revenue comes from licensing of operating systems and applications to computer manufacturers (aka OEMs) to bundle with their products. But all the major PC makers have reported lackluster sales during the past year or so. In that case, where did Microsoft make its money?

According to many business periodicals, revenue was boosted by the new, subscription-style licensing Microsoft adopted – and then forced on users with the threat of even higher prices should they not go along with the so-called Software Assurance program. Even CEO Steve Ballmer credited the revenue rise to the software-subscription ploy.

We pundits tried to tell you that signing up for Software Assurance was not going to be helpful to you; that the only way to save money was to refuse this gambit and make Microsoft rethink its position. But evidently when it came to the showdown, a lot of you blinked – then signed on the dotted line to set up your Microsoft subscription service.

Now not only are users and administrators locked in to the subscription price, but also it becomes hard to switch applications and operating systems. Not only is the business community giving Microsoft record revenue at a time when other high-tech companies are drowning in red ink, but it also is assuring Microsoft a de facto monopoly on the desktop for the foreseeable future.

We thought it was the politicians who were ignoring the voice of the people when the U.S. Department of Justice offered a watered-down settlement of its antitrust case against Microsoft. We were wrong. The people appear to want the monopoly.

Tip of the week

Adam Gaffin’s Compendium column lately has featured all sorts of alternatives to Microsoft Outlook – some good, some vaporware and some bizarre. But you should check – you never know when a gem will come to light!