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Why Microsoft loves so many flavors?




A lot of people are either perplexed, amused or just totally annoyed with the dozens of flavors of several major Microsoft products. It could be some weird voodoo, a shrewd business strategy or a complicated marketing gimmick, nobody really knows except the guys over at Redmond.

Just look at Microsoft Office 2007 and all of its 8 versions – Basic, Home & Student, Standard, Small Business, Professional, Ultimate, Professional Plus, and Enterprise. The difference between each of these versions vary in the number of included core applications — Word, Excel, Powerpoint, Outlook, Accounting Express, Publisher, Access, InfoPath, Groove, OneNote and Communicator. These editions grew from 2 versions in Office 95 to eight for Office 2007. At this rate, we’re looking at 16 versions by 2019. *heh*

Then look at how Microsoft packaged their new OS, Windows Vista. A world record of six (6) editions – Starter, Home Basic, Home Premium, Business, Enterprise, Ultimate – each one priced accordingly from $199 to $399.

Why all these editions? Why can’t they just stick with one? Let me venture into some ideas:

  • Huge market share. Microsoft holds the largest market share of all commercial and free operating systems. Apple’s OS X is just 7.3% according to latest stats so they can comfortably settle with just one OS flavor. Microsoft still holds around 91% of the market. A market with varying degrees of users from home users to enterprise users, thus the need to segmentize the captured market.
  • Variable pricing. Having a huge market also means that the purchasing capacity of your consumers have a very wide gap. This allows Microsoft to charge double for corporate than for students, and Microsoft knows companies will still buy the more expensive versions.
  • Computing power. CPU speeds, memory and drive space are becoming bigger, faster and cheaper. Still, some segments of the market will have the low-end CPU and others the high-end. The various editions can easily adapt to those differences in computing power.
  • Productivity needs. This applies more with the Office suites. The variable pricing also means Microsoft can give more features, core applications to its Enterprise users compared to its home users.
  • Support levels. Charging the high-end users more allows Microsoft to allocate the extra income to provide enterprise-level support to its high-end users. Basically, the extra price of the more expensive editions already has support cost factored in.
  • Partnerships. Microsoft also has to put into consideration their huge list of industry partners — hardware manufacturers, software developers, and others.

I think Microsoft is sticking with its age-old proven formula – bundling. Why sell products or applications separately when you can bundle them and sell them all in one nice basket?



Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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5 Responses

  1. Shannon says:

    Yeah yeah, but where is the innovations? none. same old technology. Look at the Microsoft Touch? they say that it is the new technology, but it was an old concept. they just put some hype on it. ms s**ks!

  2. Shannon says:

    Yeah yeah, but where is the innovations? none. same old technology. Look at the Microsoft Touch? they say that it is the new technology, but it was an old concept. they just put some hype on it. ms $u(ks!

  3. Shannon says:

    Yeah yeah, but where is the innovations? none. same old technology. Look at the Microsoft Touch? they say that it is the new technology, but it was an old concept. they just put some hype on it.

  4. Hmmn…… two words…..

    Marketing Strategy…..

    :D

  5. Jon Limjap says:

    Microsoft is not fond of innovation, simply because it has become completely risk averse.

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