To cushion the blow for customers who had done the math on the new prices for Windows 2000 (see Top Stories), Microsoft Corp has been comparing prices for Windows 2000 Server with those of Novell’s NetWare 5.0 when equipped with similar functionality. Microsoft wants to leave customers with the impression that Windows 2000 Server is considerably less expensive that Novell NetWare. While this certainly appears to be true, Novell is not requiring that customers buy all the extra features that make NetWare so much more expensive than Windows 2000 Server. Microsoft, as usual, is adding features to an operating system and undercutting the competition on price, but at the same time, it isn’t allowing customers the option of not using and therefore not paying for these features.
Similarly, it is charging lower initial license fees than it might otherwise be able to do if it were not pretty confident that customers were going to pay the higher upgrade prices down the road. In effect, the wary and smart Windows 2000 Server customers are going to subsidize the low prices that those on the bleeding edge will require before they will even think of moving to Windows 2000 Server. While this is not exactly exercising monopoly power, it is harvesting your customer base and it is a practice that most customers loathe.
Microsoft’s Windows 2000 pricing announcement also included a pricing comparison pitting an eight-way Sun Ultra Enterprise 3500 with 336MHz processors, 2Gb of main memory, 144Gb of disk capacity running Solaris against a Compaq ProLiant 8500 with eight Pentium III Xeons and the same memory and disk capacity running Windows 2000 Advanced Server. The Sun box, priced by an authorized Sun reseller, cost $196,000, while the Compaq Win2K machine cost $95,471. While Microsoft didn’t get into it, that Compaq machine would have about 75% more OLTP power, giving it almost three times the price/performance. But then again, none of that has anything to do with Windows 2000 Advanced Edition.
