In a move that could play into Apple Computer Inc’s hands now it is committed to offering a shrink-wrapped Mac OS to run on any PowerPC-based machine built to the newly agreed standard, Microsoft Corp is turning an obstacle into an opportunity with Windows95 – and its OEM customers are not happy about it. Following […]
In a move that could play into Apple Computer Inc’s hands now it is committed to offering a shrink-wrapped Mac OS to run on any PowerPC-based machine built to the newly agreed standard, Microsoft Corp is turning an obstacle into an opportunity with Windows95 – and its OEM customers are not happy about it. Following the consent decree with the US Justice Department, the company is barred from doing per-processor model pricing, where people bundling Microsoft software with some of their machines were required to pay Microsoft a software royalty on each machine they sold, regardless of whether the customer wanted the software, so it has come up with a new pricing model for Windows95. According to US PC Week, Microsoft is offering OEM customers more than a dozen incentives to decrease their Windows 95 royalty payments, but these start at $55 before volume discounts, compared with the $35 per system to license MS-DOS and Windows. If manufacturers were to agree to all of the terms for licensing Windows95, they could reduce their licensing fees by $30 per system, sources said. One condition is that customers must agree to install Windows95 on at least 50% of their systems in the first month after Microsoft starts shipping the thing. Joint Windows95 promotional and advertising campaigns will get no monetary compensation from Microsoft, and OEM customers must pay for hardware certification and Windows95 logos. And the Market Development Agreement stipulates that only those signing contracts by March 1 will receive full discounts on royalties. Smaller firms are particularly exercised about the new terms, reckoning they benefit the giants like Compaq Computer Corp and IBM Corp. Microsoft argues that higher prices are justified because Windows95 has so much more built in. Apple has said that Mac OS pricing will be not be out of line with Windows pricing. Meantime Vobis Microcomputer AG, which now pre-loads OS/2 Warp (CI No 2,546), will terminate all its agreements with Microsoft on January 1, citing uncompetitive practices.