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Microsoft Maelstrom: Systems Builders Cry Foul | |
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| Time: 00:00 EST/05:00 GMT | News Source: CRN | Posted By: Todd Richardson | ||
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Solution providers challenged a top Microsoft channel executive during a public appearance last week, seeking answers to why the developer provides pricing advantages to large computer makers but not to the systems builder channel. The exchange, during a keynote address by Margo Day, general manager of Microsoft's U.S. Partner Group, galvanized systems builders last week at the Intel Solutions Summit here. | ||
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| #1 By 6253 (12.237.219.240) at 3/9/2003 2:11:14 AM |
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Probably the same reason that Allstate gets a better rate from the car rental companies than I could get by myself.
Probably the same reason that Amazon can buy books from the publishers at a fraction of what the Mom & Pop stores can. Probably the same reason that Dell sells those computers with their preloaded software to large companies for less than you could buy Qty 1 of the same computer from Dell. It's mind-boggling how people fail to understand volume pricing. At one time, there was a legitimate gripe that Microsoft favored certain OEMs over others despite equivalent volume of purchase, but that was resolved. Now Microsoft is simply offering quantity discounts. It's that simple. The little system builders want to get a discount "as if" all of their purchases were added together. Gosh, well why don't they actually do that? In the 70's, there were grocery store "co-ops" in the United States. Independent grocery stores formed these co-ops to pool their purchasing power and get the same discounts from manufacturers as the big chains like Kroger. The co-ops eventually fell apart because these same independent grocerers who wanted to cooperate also wanted to compete, so naturally there were political struggles which froze their decision making processes, slowed productivity, and resulted in high overhead costs which wiped out their volume savings. I think the system builders know they can't cooperate, but what makes them think they should get a discount from combining their purchases without actually combining their purchases?? |
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