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MS pushes business to Win2k via Win9x price hikes

There goes the air supply again...

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Microsoft displayed its habitual exquisite timing last week, following up on the profit warning by kicking Windows ME and Windows 98 out of its corporate volume discount purchase plans. Effectively this will make it harder and more expensive for companies to buy the older Win9x software, and will channel them towards buying Win2k instead.

Which is, er, more expensive anyway. Microsoft said the move is a response to increasing demand for Win2k in the enterprise and decreasing demand for Win9x, but the logic of why these factors should result in a price hike for 9x while the 2k price stays the same is beyond us.

WinME will be removed from the volume discount schemes on March 1st, while Win95 and Win98 will get theirs on June 30th. They'll be removed from volume licensing schemes at the end of this year, although existing schemes will be honoured. Given that WinME was never intended for the corporate market in the first place, and had been cunningly crippled to make it especially unattractive for business, it's probably weirder that it was on the corporate discount schemes in the first place than it is that it's now being removed. But the tell-tale presence of the geriatric Win95 on the death list does make you wonder - didn't corporate demand for Win95 fall off, and demand for Win98 strengthen, a couple of years back?

The companies most affected will be those who're running Win9x as their standard client OS. Note that they haven't even been able to buy Win2k for a full year yet, and if you factor in the evaluation, planning and training period it's actually perfectly rational and reasonable for many businesses to still be running 9x as the standard. Sure, post service pack they will now have a reasonable estimation of Win2k's capabilities and stability, but that doesn't mean it makes business sense for them (however much sense it might make to Microsoft) to switch wholesale now, just because they can.

The removal of the volume discounts does however impact on their planning quite considerably. The cost of the software has some importance, although the related need to spend on retraining and deployment sooner than anticipated is likely to loom larger. Theoretically they could carry on buying at the higher price through the channel and through OEM preloads, but that will become progressively more difficult as Microsoft tightens the screws.

You'll have noted that PC OEM web sites and sales literature these days solemnly intone in unison that they recommend Windows 2000 for business - this is not a coincidence. At retail Win98 is going to be progressively squeezed out by WinME, which is a far less useful OS for business anyway. At OEM level WinME again will progressively take over as the split between Win9x at consumer and Win2k for business becomes more formal. You'll still be able to buy consumer machines and hang them off corporate networks as clients, but it'll become more and more difficult to coerce PC suppliers to squirt Win9x onto corporate-spec machines, even if you dangle large volumes.

So you either do it yourself, painstakingly and expensively,* or you give in and go with the program. One wonders if perhaps this process relates to Sun's complaint to the European Commission, and the Commission's interest in Microsoft possibly using Win2k to leverage dominance in the server software business? Presumably Brussels is paying attention.

* Here's a question for the panel. How do you get Windows 98 onto a legacy-free PC that won't boot from a floppy, and that shipped with Win2k preinstalled, and therefore won't boot Dos? Not impossible, but a puzzle that The Register is currently investigating. The clue is that it will boot from a CD - but more of this anon.
Small update: We didn't actually know some SE CDs were bootable, and anyway ours isn't. Nor will the bios support a bootable USB floppy drive, so forget that one too. Nor will the floppy drive we've got support this anyway, even if the bios did. And finally, for the moment, we're not pulling the hard drive and putting it a proper machine, then putting it back. That is an inelegant solution. ®

Totally (honest) Unrelated Item:
Is the end looming for the Microsoft monopoly?

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