WCS - While MS offered a number of "package deals" to OEMs to move office, it was never free, despite what the invoice says... as far as SmartSuite, I did a deal a few years ago with a European OEM where IBM offered that product for $5 over MS, $3 over OS/2... that's pretty close to media cost.
There is no question that MSFT did aggressive deals on the edge of the envelope to move their products - as did IBM and others.
Where MSFT stepped over the line IMO was in the use of steep "per system" discounts to take the whole package - in other words, an OEM could get a REALLY good deal if they shipped Windows and Office on every box they shipped... even if the customer wanted another OS. The price was good enough that even if only 80% of the machines actually ran the MSFT products, they were still better off to take the per system deal. After that deal was cut, the OEM could charge whatever he wanted for the components - and many offered "free" office as an incentive. That was, of course, one of the practices they eventually discontinued under the original consent decree... but it was also relatively straightforward in comparison to the many "free" deals being offered today - free ISP service, free accounting software, even free computers. None of which are really "free".
It is your pricing argument which falls down... since even today, the big OEMs can get the combination of Windows and Office for less than even those "super good" per system discounts. So if MSFT developed the ability to exercise monopoly pricing, they never used that, since they charge less today for a much better product, and one which includes three components not even in the original suite. |
