I have never bought windows, only because of the insane cost.
200 dollars for Home Professional? What the hell is that? If Microsoft were to make it say, 70 for Home Basic or whatever, 100 for pro, and 150 for ultimate I think that would actually work out quite well. Same goes for Office.

Does anyone know why MS does this? It seems to me like they priced themselves right out of the market.
(I realize that MS gets most of it's money through OEMs and enterprises)

do you ever know what you are talking about?

besides mass effect 2

Priced themselves out of what market, exactly? There isn't exactly an OS market, but plenty of other software packages cost well over $200.

It takes a huge amount of money, time, and people to make Windows.

Um, something like Photoshop or Maya runs for $600...

http://en.wikipedia.org/wiki/Pricing

Maybe we can go through the whole list of frameworks and criteria and do an analysis

Also there is no such thing as Home Professional ... it's either Home or Pro and one of the reasons MS had the pre-order discount for W7 along with the long-running student discount is because it makes Windows accessible to those who wouldn't be willing or are unable to buy it at full retail price. The retail pricing is correct to "fill in the gap," so to speak -- it sells the copies of Windows that aren't sold to OEMs or to those targeted by the price promotions.

Short answer: Windows costs money because people are willing to pay money.

Long answer: What Pommy said.

Yeah. They have it. You want it. They set the price. You pay it, or you don't get it.

This whole "why is item x so expensive" thing is idiotic. Why are diamonds expensive? Because there are a lot of people out there willing to pay lots of money for them.

As someone already said, a lot of work goes into making an operating system or an office suite, so a sizable price is charged for it. It's not like those are the only things in the world that are expensive.

This makes a lot of sense until you discover Linux and OpenOffice.

There. Now my argument stands.

1.) I know 'monopoly' is a dirty word these days, but there's nothing inherently wrong with them. Microsoft, for example, is a natural monopoly. There are only issues when a monopoly uses their position to affect other industries.

2.) Rational monopolies (such as Microsoft) try to use the profit-maximizing price. Microsoft would lose money if they lowered prices. Microsoft would lose money if they raised prices. Hard to blame them.

3.) Microsoft also engages in price discrimination to capture consumer surplus: the people who would have been willing to pay more money for Windows are compelled to buy a more expensive edition. Again... hard to blame them.

Linux and OpenOffice are inferior goods. They're also marketed as complementary goods to support plans.

Bah. Crane has a kit with tank, bowl, seat, wax ring and flange bolts for like 100 bucks.

Well this has been enlightening, thanks.

Wait, they have a monopoly and there are free alternatives? Woah.

Because you touch yourself at night.

And if you pay full retail price for Windows, you're not looking hard enough. Easy to find an OEM version for $100-$180 depending on the version. Hint: Newegg

Which I can only use once.

THREAD OVER.

But in case it's not...

The joke is nothing has changed?

Look at it more carefully hurr.

And I just wanted to post a Monopoly pic in this thread. I suppose I can agree with most of your points Jon`C, with the one exception that OEM editions cost significantly less... and most people AFAIK do NOT buy Windows off the shelf but get it via OEM with a new computer. Not sure about businesses, they might tend more to buy copies to roll out a new OS to everyone at once but they might get bulk discounts too for that. I don't really know how it works.

Might be interesting to find some statistics on sales of Windows off the shelf vs OEM or other discounted package deals...

Plus the whole thing where every edition of Vista (and I think 7? Not sure) came on one DVD, which basically means you're paying extra for a special key to unlock more features from the DVD. Home Basic users got the same DVD as Ultimate users. If you skip the key entry, it has to ask you what edition you own! Something about that just seems wrong to me.

I suppose technically it costs them millions of dollars to make the very first copy of the OS, and then pennies for each subsequent DVD copy, and so they just average the cost out over the thousands/millions of DVDs they make. Makes a bit more sense in that light I suppose.

hahaahaha i get it now.

The considerations that go into pricing go a lot further than breaking even/cost-plus (especially when there's just a giant fixed R&D cost here and practically no variable costs) ... in this context it has a lot more to do with price discrimination and hitting all the willing-to-pay ranges, as well as exploiting (not necessarily in a bad way) price heuristics (although imo it has sort of failed at the latter)

This is why Microsoft is a natural monopoly, by the way. Developing software involves an enormous one-time expense, but selling software is almost free - it's generally front runner, just ahead of pharmaceuticals, for the title of Ultimate Economy of Scale.

Windows, Office, Photoshop, Flash, Steam.

I say generally. This covers products where the hard part is the implementation: you'll probably never be able to compete against an established product, just because they've had so much more time and money to spend on making their codebase gigantic. When you start talking about markets where ideas or engineering matter the most (Web 2.0 garbage, video games, compilers, any toy app you can hammer out in a quart of Dr Pepper,) the situation gets flipped on its head.

I do not agree with the pricing either. Sure you can say its a lot of Time and work into developing each version of windows but I'm sure from R and D to the shelf the cost of the OS itself including the wage pay for each employee involved is what Microsoft grosses in a week, maybe a month.

Jon'c is right. They make it, we buy it. That's the catch.

Well I mean I don't know any business that prices their products so as to only cover their costs ... besides the fact that "will this cover all of my costs" is not the primary determinant of pricing for most products (generally you pay attention to the margin and not how much of the cash flow can offset every other cost in the business) here is nothing "wrong" about charging more for a product than is necessary to break even on fixed costs ... that's like saying no company should have any profit because they they should only be looking to sustain themselves and not earn a penny more. I don't think companies have the obligation to try to make a product as affordable as possible to the consumer unless that's part of the value proposition (and it's not for Windows).

I'm pretty sure nobody tries to just break even.

General:

If you have a choice between working 40 hours a week at $20 an hour, or working 35 hours a week at $26 an hour, which are you going to choose?

You'd have to be pretty bad at math to choose the first job.

Generally I think modern corporations tend to be more interested in malevolence than in maximizing profits, but in this case? You can't blame Microsoft when you'd be doing the exact same thing in their situation.

Pommy:

It depends on your definition of costs. If you include opportunity costs most businesses are just about breaking even.

I would just like to point out that Apple charges $29 for Snow Leopard. It's marketed as an "upgrade" but it's actually the entire operating system. Their operating system isn't always this cheap but I think the "trust system" that they used was smart. It resulted in me purchasing an operating system for the first time in my life (other than student editions when I was in school). They only charge $79 for iWork, which is their office suite. One could argue that iWork isn't as powerful as Office but it'll suit the needs of the average home or student user. They're able to do this for obvious reasons (they're trying to sell hardware).

It's marketed as an upgrade because as far as the license is concerned it is an upgrade. It's the same with windows, the only difference is that Windows will actually try and make sure you're upgrading.

It's ironic that you talk about the "trust system", when you in fact break that trust with Apple by buying the upgrade version when you're supposed to get the full version.

Snow Leopard was just a bunch of garbage on my machine. It was a full OS that made my computer run worse.

Don't they outsource the manufacturing of most of their hardware these days anyway?

Considering all of the ways you can get Windows 7 without paying for it, the price of servers/storage/shipping for individual copies/downloads seems realistically high. The reason Apple sells their operating system so inexpensively is because they are in hardware and lifestyle, not operating systems. As long as people are buying their gimmicks products, they'll keep supporting them with inexpensive software. That isn't to say the quality is poorer, you're simply paying for everything when you buy the hardware/brand, not the software.

Clearly your immense gravitational pull had an effect on its workings.

Yeah, suck on that FATTY.

(plz don't ban me)

I have a strong opinion about OSX that the people who agree with me don't need to hear, and the people who disagree with me won't read. To put it simply, OSX is cheap and it's a marketing ploy to sell high-margin PCs.

That's an important distinction. My entire point, which others have re-stated after me, is that Apple can do things with pricing & "trust systems" that competitors can't do because they're in the business of selling hardware.


In theory, Snow Leopard should perform better than Leopard considering that many of the updates that were made were for performance. Maybe you have an older Mac? I've noticed significant improvements in various areas.


I have a relatively new iMac (I bought it last Autumn) that had Leopard installed. Instead of upgrading, I did a clean install w/ Snow Leopard. Why would I go out & buy a retail version of Leopard just so that I can upgrade to Snow Leopard when I already had a perfectly good install of Leopard on my Mac? Besides, one of their main reasons for doing it this way was to get more people running the latest operating system. They obviously knew that people would "cheat" & they obviously didn't really care. It's advantageous to them to have more people running a more current build.

It may well be cheap (I dunno, I'm a consumer and not a programmer!) but I just find it more pleasant than windows. The things I use my home computer for seem to fit in more with OSX than with windows.

Disclaimer: I've still only used XP and earlier. We've got vista and 7 machines in our office, but I haven't got one.

Oh and I fully admit there are things in even XP that I miss in SL: windows explored being one of them.

Ironically there is a well-known trick to let the upgrade Windows do a full install. Activation will go seamlessly (at least, it has, MS may yet drop a patch to not let that happen in the future if too many people do it).

There's no trick, you CAN install a clean install from an upgrade disk. I don't see how this is special of OS X, other than OS X letting you use the upgrade disk even when you don't have Leopard (Because it doesn't check, but the license does say you cannot do that).