Feeds

Cheap PCs will damage MS software sales, says CFO

And our redoubtable bean-counter doesn't expect to make money from Win2k for another year yet...

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

Cut-price PCs may finally start to erode Microsoft's dominant position in the software market, company CFO Greg Maffei suggested yesterday at the company's analysts meeting. Maffei appears not to have floated the possibility of rival operating systems breaking into the market, but he was clearly concerned that the need for manufacturers to force the total price tag down would hit the company's applications revenues. Over the past few years Microsoft has been determined not to cut the price of Windows to OEMs, while PC prices have fallen. This on its own has meant that the company's slice of total revenue per PC has increased as a percentage, while bundling of Microsoft applications software on these PCs has given the company even more of the total. As you may have noted from our trial coverage, there does appear to have been a certain amount of linkage between bundled Microsoft applications and discounts on Windows licences. But from what Maffei says now, it seems clear that Microsoft won't be able to combine continued high pricing for applications bundles with holding the lion's share of the applications market. The company is unlikely to cut its prices to maintain market share, because it can still derive a lot of revenue from the corporate market, where Office is the de facto standard, so the likely result will be more bundling deals for rivals like Corel. Although Maffei appeared to be concerned about applications rather than operating systems, Microsoft should also start to come under pressure on the OS front, for similar reasons. As prices go down further, the company is going to face the choice of either cutting prices, or losing share. Maffei also had some interesting things to tell analysts about Windows 2000. As you may recall, when Microsoft introduced the Corporate Preview Program beta of Win2k earlier this year, strange stories started going around about Microsoft having an "internal" target ship date of October for Win2k. Officially of course it wouldn't go any further than 'on target for the end of the year,' but there seemed to have been a bit of briefing by the spin-doctors, nevertheless. Well, this is precisely not what Maffei has been telling the analysts. Windows 2000 is expected to be released to manufacturing at the end of calendar year 1999, he said. So it might be finished by then, but with OEM testing and actual manufacturing and distribution to be taken into account, February looks more realistic as a ship date. That's not what Maffei said of course, but the clear implication is there. And it could get worse. He did say that a "revenue upside" from Windows 2000 was expected in late financial year 2000. That means he's not expecting to earn money from it until late Q2 next year. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
Inside the EYE of the TORnado: From Navy spooks to Silk Road
It's hard enough to peel the onion, are you hard enough to eat the core?
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Mitigating web security risk with SSL certificates
Web-based systems are essential tools for running business processes and delivering services to customers.