CyberTech Rambler

November 21, 2011

Still a good business strategy to threaten Microsoft with Open Source

Filed under: Uncategorized — ctrambler @ 1:54 pm

ComputerWorldUK blogger Tony Collins confirm to us what we already suspected, if you are big enough,  you can get big discount if you threaten Microsoft Office with Open Source. Even the size of the discount, i.e., 100%, is not a surprise to me. It also shows that Microsoft is willing to be extremely competitive when the situation calls for it. Giving that sort of discount shows that they did their homework and realize that to compete, they not only need to negate the cost to customer on licensing, but also to negate the overhead cost of migrating away from Office.

While Qamar Yunus, the assistant director in the Cabinet Office ICT policy team who tell us this piece of tidbits, advise his peers that the threat should not be used as a ploy to get discount from Microsoft, I disagree. It is standard business practice to orchestrate such a bluff to get a discount. Microsoft knows this. It is up to them to call your bluff. Just turn up in a meeting and say to Microsoft “Right, I am moving to Open Source” will not work, you need to lay down the groundwork. Microsoft already done their intelligence work before coming to such a meeting, especially if they suspect you want a steep discount. A credible pilot study will help.

The nice thing with this ploy is, one can repeat this again and again. As long as the threat is credible, and Microsoft is in fear of losing you, they will play along. You must not, however, let it be known that you are doing this. If they called your bluff and succeeded, then the next time round, they are not going to be that  generous. That is a risk for the organization to decide whether to  take.

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