Microsoft considers alternative pricing strategy

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Microsoft considers alternative pricing strategy

Microsoft is looking into ways to offer its software at different prices around the world, signalling a possible departure from its unified global pricing practice.

Facing pressure for change from some customers, particularly in emerging markets, Microsoft is working with governments in those countries to price its software in a way that is relevant to that market, said Martin Taylor, general manager of platform strategy at Microsoft.

One problem for Microsoft is that buyers can shop around for a better deal and buy their software from another country. To address this, Taylor suggested that Microsoft could offer different prices for the different language editions of its products.

"English speaking is an area that we have to really think about," he said. "When you have markets where you have specific languages [then] it's a little bit easier to do."

Microsoft is working with several governments to tailor its offerings.

"We've got quite a few different initiatives that we're beginning to work on that we'll be announcing in the coming months," he said.

The problem Taylor and his company are facing is a tough one, said Laura DiDio, a senior analyst at The Yankee Group.

"You want to make your products affordable, particularly to companies in the Pacific Rim, because they just don't have the money, and then what do you say to your customers in established markets such as North America and Western Europe?" DiDio said.

DiDio expected Microsoft to negotiate on pricing or offer tailored version of its software for various countries.  She said that the company may also talk to governments about jobs the company has created in their region.

Paul DeGroot, an analyst at Directions on Microsoft does not expect Microsoft to change its global pricing strategy overnight, but does see some changes happening at the local level.

"They are probably going to make these choices on a country-by-country basis. They will look at their situation relative to their competitors. If Linux doesn't represent a big threat, they will feel under less pressure to make any moves," he said.

Joris Evers writes for IDG News Service


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