Jon -
Your position reflects common understanding but is wrong on several factual issues. MSFT has used the same tactics to develop its core business almost from the start of the company. Something people seem to be forgetting is that MSFT have ALWAYS had a virtual monopoly on the client side of the PC operating system since day one of the IBM introduction!! but this monopoly was not worth anything until MSFT and others built the industry as it is today. Netscape had a very good run with a good product. Almost NO products in the PC space, hardware or software, can maintain market dominance for more than a year or so without changing and evolving. Netscape got lazy and decided to try to keep their market share without working to provide better value to the customer - instead they concentrated on hobbling their competitors. Netscape deserves to lose if they don't look to where the money actually comes from - users of the products.
If MSFT was really all powerful, why were they unable to unseat Intuit for the financial suite market? Because Scott Cook and the folks at Intuit kept innovating, providing better and more integrated products for their customers, expanding the range of services. MSFT would come up with a slicker, more integrated home checkbook, Intuit would change the rules and offer a value proposition where the MSFT functionality was not the most valuable aspect of the product any more. Intuit continues to kick MSFT's butt in this space.
As far as offering bundled related products, your information is just wrong. Large customers can buy the related products like office at a lower price than OEMs and have always been able to do so. This is a straight volume driven proposition. Outfits like Citibank can contract for larger volumes of application suites like Office than the big OEMs, since CPQ and Dell can not guarantee how many customers will buy the bundled products. None of the big players has ever preloaded Office on any of their major product lines to my knowledge. Reality in the market place is just the opposite of what you say - MSFT has been unable to generate much interest among OEMs for products like Office precisely because there is no obvious volume outlet and big customers can already get it cheaper buying direct. The company who has been the most aggressive here has been Dell who can integrate OEM software on an order by order basis more efficiently than anyone else. But even Dell can not compete on price with large corporate customer discounts direct from MSFT.
As I keep reminding people on this issue, DON'T GET SUCKED IN BY THE HYPE!! Look at the facts. |
