Microsoft pricing sees local builders considering Linux

Microsoft pricing sees local builders considering Linux

An Australian system builder has claimed Microsoft price breaks awarded to multinational PC vendors are killing the local channel.

ASI Solutions director, Ken Lowe, said Australian builders were paying up to three times more in licensing fees for Microsoft operating systems than their branded rivals.

The different pricing structure was now so painful, he said, that many local builders could ditch the software giant's products in favour of cheaper Linux-based offerings.

Although licensing has always represented a considerable portion of production costs, Lowe said the issue had not been as acute when retail prices were higher. But aggressive pricing from companies such as Acer and HP in recent times had turned the screw and left local players searching for ways to cut every possible dollar out of production in order to maintain margins.

As a result, several local builders including ASI Solutions were banding together, Lowe said. The group now had at least one representative in every state. Preliminary meetings had started weighing up alternative solutions and ways to cut costs.

Individual members of the group had asked Microsoft to explain the large difference in pricing structure for local and international players, Lowe said.

One local builder, Pioneer, was able to offer its resellers a $799 notebook last month by building it with a Linux operating system.

Microsoft was unable to comment on this story at the time of going to press.

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