CyberTech Rambler

December 15, 2008

Someone is trying to profit from Vista to XP downgrade

Filed under: Uncategorized — ctrambler @ 7:25 pm

Dell appeared to have tripled the charges to downgrade from Vista to XP. Given the economic circumstances, it is puzzling on why Dell wants to make it more costly for companies to buy Dell computers. (I am assuming the companies are the people most likely to want to stay on XP, rather than individual, partly because companies has more legacy compatibility problems and a lot of people would not even know the offer to downgrade exists.) All I can assume is Dell’s hand was forced by Microsoft (unlikely) or its sales department boffins make the calculation that Dell will earn more money by charging more.

Why I think it is unlikely that Microsoft forced Dell to do so? This increase in cost appears to be limited to Dell at present. If Microsoft forced Dell’s hand, we should see others raising the cost. May be Dell is the first to announce, I don’t know.

Another possibility is the cost of providing the downgrade per-unit increase because people are finally moving from XP to Vista and therefore we have less people to share the cost of preparing the downgrade.  That is possible but STILL cannot explain the trippling in prices. Most of the work Dell has to do is upfront work in preparing a separate hard disk line for XP. Once this is done, it is a problem of putting a different hard disk into the machine, something Dell already has the infrastructure to do since its strength is, and it pioneered the (limited) customization of computers at a large scale. If the problem is increased cost, we will only see a smaller increase.

That is why, right now, I suspect the real reason is Dell trying to make more money from doing the downgrade. Dell is seeing the demand, and like any company, wants to capitalize from it. If true, it says more about the sorry state of Vista.

Back to the Microsoft angle: If Microsoft did indeed forced Dell to raise price, one can only conclude that it is trying to drive people to use Vista by increasing the cost of XP. If true, then as one analyst said in PCWorld, it is “trading short term profit for long term loyalty”. Something I don’t think Microsoft, however large the grip it has on the PC market, is prepare to do unless it is as desperate as SCO (and it is not even close to it). To do so now will be to give Linux more competitive advantage over Microsoft, and I don’t think Microsoft is prepared to concede this. Right now, if I were Microsoft, I don’t want people to even try Linux. Once they did, whether they switch back to Microsoft or not, I lose because those customers will know that they can switch if they want to, rather than living in the fear that they cannot live without Windows, which is the precise space I want them to be in now.

On a side note, the problem I have with downgrading Vaio Z seris laptop no longer exists. Sony finally came out with a installer that takes care of the majority of the problem of navigating around the installer driver directory tree. About time.

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