Magic Quadrant for Enterprise Backup/Recovery

Microsoft has finally got its act together and started selling the full version of Windows 98 SE from its Web site - at the somewhat less than bargain estimated price of $209. As we've been pointing out for the past couple of days, (MS dozy Webbies story) the company seems to have been trouble figuring out the Ts and Cs of this particular permutation, but now it has. This version of the product is aimed at buyers who don't already have a Microsoft operating system that qualifies for an upgrade, and it's actually something of an innovation for Microsoft. The company has previously tended to sell upgrades at retail and full product via preinstalls on shipping PCs. This particular version, although marketed at the Microsoft site, is actually being fulfilled via online retailers, so Microsoft is clearly ring-fencing its own Win98 service pack and upgrades sales channel from its retailers - for the moment. Microsoft is also pushing an upgrade version for Win95 and Win 3.x users through the same channel, estimated price of this one $109. That's more in line with the usual price tag, and fits in with a probable street price in the $90 area. What you pay retail for the upgrade is of course more than what a lot of PC manufacturers pay MS for the full product. What MS appears to want for the full product at retail meanwhile is even more than MS charges IBM for NT Workstation when it's trying to screw SmartSuite and OS/2 (see trial reports passim). Finally, a little perspective about who's making most out of this process (three guesses). A former CompUSA staffer claims that Microsoft charges CompUSA around $97 a pop for Windows 98, and CompUSA usually sells it for $99. For Red Hat 5.2, on the other hand, the cost to CompUSA is approximately $29.95, and it sells for $39.95. Says our informant: "I got the general impression that Microsoft had somehow 'forced' CompUSA and other retailers into keeping such low margins." Microsoft's price to the retailer compared to what the company calls the "estimated retail price" would give the retailer a margin of approximately 10 per cent. But if the usual street price (which Microsoft happily dishes out when it launches products) is $99 or thereabouts, then there's really no margin at all for anybody except MS. We'd welcome further information on how MS keeps its price up and the retail price down. Note for non-US readers: Yes, we know we haven't covered non-US here. The international subsidiaries don't have their act together yet. But Software Warehouse UK is currently saying it has "Windows 98 V2" on order, priced at UKP 112 for the full version and UKP 59 for an upgrade. There's also a Japanese version of Win98 on order for UKP 220, we know not why. ®

Magic Quadrant for Enterprise Backup/Recovery