German court ruling triggers 30% price cuts on Windows

Microsoft Germany has reacted to a court defeat by slashing Windows prices and radically revamping its licensing model. In July a German appeal court ruled that Microsoft did not have the right to stop dealers selling on software that the company intended should only ship with a new PC; this has effectively created a secondary market for Microsoft software in Germany, and the company is now attempting to adjust to this.

The new prices, which were obtained from a German distributor by Techchannel.de, are 20-30 per cent lower, and the software itself can now be sold separately. According to Techchannel, however, only the DSP (Delivery Service Partner, or OEM) versions of full-blown Windows wil be available at retail, and there will be no support on these. Boxed editions with the standard two free phone calls to tech support (Upside: more than you get if you're arrested) will only be available in upgrade form.

The five client version of Win2k server shows the steepest fall, down 31 per cent, while an upgrade to Win2k Professional is down 20 per cent. Both the full and upgrade versions of Office 2000 Premium are down 20 per cent.

The cuts themselves however, although welcome to German users, are less significant than Microsoft's acceptance that unbundled sale of OEM/DSP software has to be permitted. Anyone old enough to have been able to buy an original IBM PC back when it all started (The Register, sadly, is) will recall that once upon a time PCs and operating software were priced and sold separately, but in the interim Microsoft has been highly successful in switching the effective licensing model so that it gets a new Windows licence fee every time somebody buys a new PC.

This chokes off the secondary OS market, and makes it a lot simpler for Microsoft to fight piracy the way it wants to fight it. As, prior to the German ruling, it wasn't possible to sell on OEM versions of Microsoft software without breaching the Ts & Cs of Microsoft's licensing agreements, by Microsoft's definition all such sales were illegal. The appearance of OEM versions for sale on the market will make it easier for people to sell pirate copies of Windows software, but then that's Microsoft's problem. Just in Germany, for the moment. ®

Related story:
German ruling loosens MS lock on reselling Windows
See also:
Tecchannel story (in German)