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no one is going to spend $200 for an OS on a $200 computer

You can easily pay $20,000 for software to run on a $200 computer. Whether that represents value for money or not depends on what you're trying to do.




Microsoft has been successful largely because the cost of their product was hidden in the cost of the computers on which it is pre-installed. $200 total price point does not leave them much room to hide. Because consumers have been trained not to think of the operating system as a separate cost, but just part of the computer, I don't think you can convince them now that the operating system, by itself, is worth as much of the rest of the computer combined.

This is not quite as true for businesses, but even there the cost of site licenses for the Microsoft product stack needs to be questioned for employees whose needs are web browsing, email, and basic document editing. And, of course, the article shows that newer companies are coming to that conclusion already.


You might be surprised at the economics of Microsoft volume licensing. Businesses are not paying retail price for every copy of Windows and Office. And neither are most consumers. In fact I wouldn't be surprised if retail revenue of these products was insignificant and they exist only to implant the idea of "value" in people's minds.


Vista Home costs dell ~40$.


1. Did Microsoft charge more than that before Dell started seriously supporting Linux on their computers? (Honest question, I don't know the answer.)

2. $40 is a big cost to absorb when you are selling a $200 or $300 netbook.




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