Microsoft is slashing Windows licensing fees, but is it enough?Written by Alan Buckingham on February 23, 2014 - 06:07AM @alanbuckingham
It has come to light that Microsoft will be drastically cutting the cost of licenses for Windows. This doesn’t directly affect consumers -- you can’t buy Windows 8.1 for any lower cost than before. Instead, this reduction is for original equipment manufacturers (OEMs).
The move comes in answer to competition from low-priced Chromebooks that run a Linux-based operating system from Google. Perhaps Microsoft has finally realized that Scroogled isn’t the answer to the recent PC market woes?
To call the price slash drastic would be an understatement. According to Mary Jo Foley, “Microsoft is dropping the price it is charging OEMs for Windows 8 from $50 a copy to $15 a copy”. This will apparently affect only low-end PCs on the market, but would enable those devices to better compete with the increasing threat from Google.
That competition isn’t something to be dismissed, even if you are a Microsoft fan and Windows lover. Amazon sales rank the Google OS-based notebooks among the top sellers. Not everyone needs a system that is capable of rendering HD video. The fact is, most people are just surfing the web and checking email, and that doesn’t require Windows, Chrome OS will suffice nicely, thank you.
Foley points out “Microsoft has been criticized by PC makers for decades for its OEM Windows pricing. In the past, Microsoft has charged OEMs more than $100 a piece for Windows”. That forces the OEMs to raise prices, while still selling products at razor-thin margins.
Is this too little and arriving too late? Windows 8 already has a less-than-savory reputation in the popular opinion -- even if it’s just a few vociferous people. That is tough to recover from when it becomes a general perception problem.
Chromebooks, on the other hand, are selling like the proverbial hotcakes. Hence, Microsoft has a problem on its hands, and it is one that lacks easy answers. Perhaps slashing costs helps, perhaps Update 1, now officially announced, aids things. But it’s clear, at this point, Windows needs more than just a bandage for this wound.