Microsoft: Pricing Hardball
November 18, 2008
I think I cut economics the day low ball pricing was discussed. Even though I have worked as a consultant since my days at Halliburton NUS, I bill by the hour or the project. When I read “Microsoft Offers Dynamics ERP and CRM Users 0% Finance” here, I was a puzzled. The idea of a low price is one thing, but a low price plus zero percent financing means “free” to me. The news item in Manufacturing Computer Solutions said:
The deal is apparently available to new, qualifying customers on Microsoft Dynamics ERP and CRM solutions costing from $20,000 up to $1 million, and is spread over 36 months.
My hunch is that more pricing deals will be forthcoming as Microsoft seeks to exploit the structural weaknesses of Oracle and SAP, both recently downgraded by Merrill Lynch. What does this announcement mean to me? I think Microsoft will be offering similar deals for Microsoft Fast search and content processing systems. Will competitors grouse? Nope, I think competitors will have to respond or find themselves in a race with Microsoft taking the lead. Will Google cut its stratospheric prices for its GB 5005 and other high end devices? The company may have to respond. Free is a compelling proposition to some organizations.
Stephen Arnold, November 18, 2008
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