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…..and we continue to generate almost a billion dollars in profit every month.

from Bill Gates’ e-mail to employees

I’m convinced this isn’t going to be the case for too much longer. The landscape is changing and MS is going to have to adapt quickly or lose marketshare.

For example, we just purchased a couple laptops at work, Compaq V5000Ts. The base price: $497! Oh, but wait….we needed to modify the order to a configuration more suited to a business environment. So, upgrade the OS from XP Home to XP Pro, for an additional $79, and then add MS Office 2003 Basic, for another $149. If we conservatively assume that the original OS, XP Home, would have comprised about $20 of the original $497, then we’ve got fully 33% of the purchase price ($250 out of the final price of $750) going to Redmond! As the cost of the hardware continues to fall, MS software looks less and less attractive.

It’ll be interesting to see what effect Vista’s hardware requirements will have on people considering the upgrade when Vista is finally released. If you’re running WinXP, then you more than likely have a “Vista Capable PC”, which won’t get you any of the whiz-bang graphics niceties. In order to run the Aero user interface, you’ll need a “Vista Premium Ready PC”, which means a graphics card with 128MB of memory (256MB for higher res). In recent years, we’ve seen a trend in which system builders have reduced or done away with video memory in favor of shared memory architectures. This means that the PC you you may have just bought from Dell with 512MB of memory, is actually running at 448MB or so once the video card claims its chunk of precious memory. What’s going to happen when Vista is released? Will this trend be reversed? Will system prices rise as a result?

Let’s not overlook the fact that there are alternatives. And good ones, too….

This entry was posted on Wednesday, June 21st, 2006 at 11:28 pm and is filed under tech. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.