Dell and Mac OS X (from: Microsoft Monitor)
http://www.microsoftmonitor.com/archives/008821.html
Apologies for the two-day gap blogging. I was swamped with a big work project.
Blogs and news sites were abuzz yesterday about Dell CEO Michael Dell saying, according to Fortune, “If Apple decides to open the Mac OS to others, we would be happy to offer it to our customers.”
Right now, Apple fairly clearly indicated that it would not license Mac OS X to other computer manufacturers, even with the move to Intel chips. But Dell’s interest makes sense, because the company operates around a single premise: “Give the customer what he or she wants.” Call it, the high-tech version of Burger King’s, “Have it your way.” Mac OS X would be another configure-to-order option, alongside Windows and Linux.
Mac OS X would give Dell a great alternative to Windows XP or Windows XP Media Center Edition. More importantly, companies like Dell would like more leverage over what is paid Microsoft for Windows. The price PC manufacturers pay for Windows hasn’t much changed over the last 10 years, which can be said for consumers buying retail copies, too. But falling hardware costs have contributed to lower PC prices. As the price of the PC falls, the operating system increases as percentage of the cost of the PC. So hypothetically, if a PC manufacturer paid $100 for Windows on a PC with product cost of $3,000 in 1995, the OS would account for 3 percent of the total. Ten years later, that $100 for a PC with product cost of $300 would be one-third the total. Important note: The OS price I’ve given is arbitrary, to make an easy comparison. Based on court documents, PC manufacturers probably pay closer to $70 for Windows; but that’s a guess.
Microsoft’s Windows dominance gives the company greater ability to maintain the same operating system pricing, even as the cost of other components decrease. Microsoft justifies this by adding more functionality. Additionally, Microsoft’s U.S. antitrust settlement mandates that PC manufacturers receive the same contracts, which the company also could use to keep pricing stable.
A compelling alternative to Windows on the desktop (sorry, but Linux isn’t it), would let Dell offer customers more choice and create potential leverage with Microsoft over Windows pricing. And Dell could gain that benefit on the server, too, where Mac OS X costs less than Windows Server 2003. Big reason is client-access license pricing. Apple offers unlimited CALs for the $999 cost of the software. And JupiterResearch surveys do show that large enterprises are increasing Mac OS X purchases on the desktop and server.
Michael’s comment also could be construed as acknowledgment that Mac OS X is a very good operating system and potentially strong competitor to Windows.
Still, I’ve long suspected that “Dell” is a four-letter word over at Apple. While Apple is known for style and innovation, Dell is known more for configuration and stability. Newer Dell models are trendier than their forebears, but the company simply isn’t equated with style. But Dell will offer just about any configuration inside the box a customer could want, and that approach is a key differentiator. The point: It’s hard to ever imagine Apple CEO Steve Jobs and Michael Dell all huggy and friendly on stage the way Sun’s Scott McNealy and Microsoft’s Steve Ballmer have been. Of course, the Scott and Steve show was unimaginable 18 months ago, too.