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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Harvey Allen who wrote (38159)	2/19/2000 12:57:00 PM
From: rudedog	Read Replies (1) \| Respond to of 74651

Harvey - re: Alexa Bona, a GartnerGroup analyst in London, told Reuters: "There are probably less than 10 people in the world who really understand this Well this moron is apparently not one of the 10... select licesing is well understood by the large corporate customers who buy via that route, and also by the LARs (Large Account Resellers) who sell select agreements. Careful analysis of the cost tradeoffs between buying via select and buying direct as part of an OEM purchase has been a part of DELL's field strategy for many years and most of the DELL field understands it quite well. CPQ is also a LAR and have account teams who can lay out the tradeoffs between Select and other purchasing methods. Select is just a volume purchase agreement, nothing magical about it. A customer commits to a certain purchase level over time and in return, gets a volume discount on the whole purchase, from day one. There is nothing to prevent that customer from buying product through any other sales channel at any time. Most big customers buy Select agreements because the discount structures are very attractive. The notion that the customer is "locked in" is also a little silly - when CPQ or DELL signs a volume purchase agreement with Intel, does that mean they are "locked in"?? Not really, it means that the manufacturer guarantees a certain price and delivery schedule on a range of products, in exchange for some minimum purchase commitments from the customer. MSFT Select customers can buy any products in a group - applications, operating systems, back office products - and can take those products at any time over the life of the agreement. The agreement is not for specific products, but for volume of products in a class. Large customers typically do a select agreement for most of what they plan to purchase over time, then fill in any differences through other programs - and at a higher price. This is not rocket science, this GartnerGroup guy must have just fallen off the turnip truck.