From: Hugh Whalen <HWHA@UNB.CA>
Subject: Re: Bundling and the price of NT
Organization: The University of New Brunswick
Date: Fri, 16 Oct 1992 15:08:37 GMT

In article <1992Oct16.122119.8388@netcom.com> xtifr@netcom.com (Chris Waters) writes:
>In <15OCT92.09363743.0185@UNBVM1.CSD.UNB.CA> Hugh Whalen <HWHA@UNB.CA> writes:
>
>>In article <1992Oct15.050157.29160@netcom.com> xtifr@netcom.com (Chris Waters) writes:
>
>>>probably because they feel that they can charge a slightly higher price,
>>>while still selling a lot of copies.  And, chances are good that the are
>
>>Not necessarily. This is where the arguement fails. They may think
>>that bundling will let them sell *more copies at the same price*.
>>This will also increase their profit.
>
>Ok.  I tend to doubt this in this particular instance, but I'll accept
>it as a possible.
>
>>This is one possible way of reasoning. Yours is another (legitimate)
>>way that they could look at this. I do not know the way they think.
>>You do not know the way they think. Bundling may or may not increase
>>the price. The point is that it may or may not increase the price.
>>We do not know. For you to say that it *will* is as baseless as it
>>would be for me to say it *will not*.
>
>And I didn't say "will", I said "probably".  All I have to go by is the
>fact that MS has announced "under $500", which to me suggests that the
>price will probably be somewhere between $350 and $500.  Furthermore,
>they're planning to offer systems like Win4Workgroups.  If NT is priced
>too low, it will cut into the sales of W4WG.  Since W4WG has lower
>ongoing cost WRT maintenace, it is to MS's advantage to sell more of the
>W4WG and less NT.  (Less NT only if that increases W4WG sales, OC.)
>
>Now, the server market *is* huge, and MS can expect to sell a *lot* of
>copies of NT into that market.  Whatever the reason, I think that MS
>thinks that they can maximize their profits from NT by selling it at a
>price which is *very* competitive with other networking systems.  I see
>NT as a network fileserver, not a standalone OS, and I really think that
>this is what MS intends.
>
>>>right.  And the fact that this leaves a gap in the market, which is
>>>currently being filled by OS/2, is gravy to the OS/2 users.  :-)
>>>--
>>>.
>>If Microsoft prices the thing incorrectly, you may very well be right.
>
>Actually, I think that the ball is in IBM's court on this one.  If NT is
>priced to be competitive with OS/2, IBM has the option of repricing OS/2
>to keep their edge.  OS/2 has less bundled features, so the bottom line
>(ongoing costs) is lower.  So, IBM *can* stay competitive (at least with
>NT--W4WG is another question).  Furthermore, IBM is a *huge* company,
>many times the size of MS.  They're in a much better position to offer
>OS/2 as a loss-leader than MS is to offer NT as a loss-leader.  Just a
>thought.
>
>Gee, OS/2 at Egghead for $9.95 per box!  (Well, I can dream, can't I?) :-)
>
>Anyway, I don't think that MS would be "pricing NT incorrectly" if they
>priced it in such a way that OS/2 was still competitive.  After all,
>OS/2 and NT seem to be aimed at different market segments.  It's more a
>matter of "if MS prices NT for the network fileserver market".  And I
>think that they have the potential to steal the filesever market, even
>if they charge $499.99!  For a standalone OS, that's kinda high, but for
>a network OS, that's a *great* deal!
>--
>Chris Waters    | the insane don't | NOBODY for President!
>xtifr@netcom.COM| need disclaimers | Because Nobody's perfect!!
>.

Ok, all of this seems reasonable to me. I suggest we end this
thread. I won't post anymore if you won't. :) :) :)
>.

Hugh Whalen                |Questions are the important thing. Answers
Faculty of Administration  |are less important. Learning to ask good
University of New Brunswick|questions is the heart of intelligence.
                           |Learning the answer .... well answers are
                           |for students. Questions are for thinkers.
                           |               -- Roger C. Schank



DISCLAIMER: Neither UNB nor I care what the other thinks.

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Newsgroups: comp.os.os2.advocacy