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Comment by blumkvist | Hacker News Reader

Making money.

You don't know how to.

Actually, he has a point. Too many choices can harm sales significantly. Granted, in Microsoft's position, it's not as applicable.

https://www.gsb.stanford.edu/insights/research-too-many-choi...

https://blog.kissmetrics.com/too-many-choices/

There really aren't a lot of choices though. This isn't like Windows 7. If you're running Windows 10 at home you have two options: Home or Pro. That's it.

You know that, but my mom wouldn't know that. To the average customer they may assume that the Home version is the only version applicable to them. The Pro version looks like it's marketed as a business only solution. Bottom line is that it's more confusing than it should be.

Your mom won't even hear about the education or enterprise editions. At most she'll hear about home, phone, and pro... and maybe not even the latter.

Please, this is enterprise software we're talking about, sold almost exclusively through resellers, who are licensing experts and decide what the client needs. This is how you extract the most value.

Yes, I realize this - which is why I said it's not as applicable for Microsoft's position.

That having been said, chasings point was more about how it would be wise for Microsoft to make their product line less intimidating for end-users - which would help sell the idea of their latest rebranding - and have benefit for them, and customers as well.

Microsoft makes almost no money off direct-to-end-user sales. It's all either OEM money or volume sales to enterprise/government/other institutions. Microsoft is not about to upend their entire market segmenting strategy just to make things less confusing for people who are at least one step removed from any of the people who actually give them money.

As soon as Dell has a dropdown for nomal vs pro, microsoft is selling windows directly to customers.

And guess what, "Inspiron Small Desktopwith Windows 7 Professional". http://www.dell.com/us/p/desktops?~ck=mn#!facets=153558~0~87... Not that I think the average user knows if they want window 7 pro or windows 8.1 which is what most of the desktops on that page are.

> As soon as Dell has a dropdown for nomal vs pro, microsoft is selling windows directly to customers.

No, Dell is reselling Windows to the consumer.

It does not matter who is reselling what.

What matters is that the consumer has to choose between SKUs and that choice was created by MS.

Resellers take on risks for unsold inventory; Dell does not take on risks for unsold copies of windows. They do take on those risks for other components. EX: Case screws.

PS: This does vary by sales channel. If you buy a dell from best buy they clearly already exist, but if you get a custom dell from their website they buld it after you order it.

I really don't care about downvotes, but it does amuse me when people get pissy about being wrong.

PS: A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. This is usually done for profit (but could be resold at a loss). http://en.m.wikipedia.org/wiki/Reseller

I didn't downvote you. I also don't see how that citation does anything but reinforce the original point -- Dell is buying Windows from Microsoft and reselling it. It's not even a retail product situation, like Best Buy -- Dell isn't selling Windows, it's selling computers that come with Windows. You can't buy the computer at your link without Windows, and you can't buy Windows without the computer through Dell.

Resellers are a specific economic niche. From a customer perspective CostCo and BestBuy are both just stores. However, BestBuy regularly returns unsold inventory to their suppliers where CostCo generally just has to keep lowering their prices or eat the costs.

Dell does not take unsold inventory risks with Windows so it's simply not their business model. Plenty of small PC manufactures do take this risk by buying windows 10 or 100 packs. But, if suddenly more customers want Home vs Pro edition of windows Dell does not end up with unsold inventory and get forced to offer a discount.

PS: The term Authorized Reseller often muddles the issue in people’s minds, but it’s really a different term. The App store is another great example, Apple does not buy a copy of the app before a customer does.

Edit: As to your comment about bundling. Dell does not manufacture their case screws, but they’re not a case screw reseller.

Dell is an OEM. How they chose to package their product is their business. More importantly their direct-to-consumer sales are a drop in the bucket. They use resellers too. When you go to Best Buy, nobody chooses their windows. The smiley guy shows you a few laptops based on what he thinks is best for you and you chose the one who looks the best. There are very specific rules about which windows versions go in which models and there are very specific rules about rebates. The rebates dictate what is getting sold to whom. It is such a sophisticated operation, with so much analysis behind it, that people generally don't understand it at all. I tried to hint that if you make such statements, you might not be qualified to talk about it, but apparently you are not willing to entertain this possibility at all. You think you are understand supply and demand better than the collective of thousands of people who run analysis that makes up this strategy, because you read article on a blog... Nothing more to add.

OEM != Reseller

Most stores != Reseller

Best buy is a store you can buy a prepackaged dell from. But, they are not a Dell reseller.

Again, Reseller is a term based around two sales for the same item which has specific legal meanings.

PS: Book stores are a classic example where they will destroy unsold inventory and ship the covers back. Clearly, if the book store had already purchased the book doing this would not result in a check from the publisher.

It wouldn't be wise, because they will lose a truckload (several dozen truckloads) of money from doing so. MS doesn't make money from end users. MS licenses are resold. Either from OEM or ISV. Customers go to them and the reseller decides what they need. The reseller doesn't need simple licensing. The reseller has a floor of people whose only job is to know the licensing structures.

Why hire so many people to navigate the licensing? Because that's how you extract the maximum value (money) from the market. This is why I said chasing doesn't understand how money is made in such situations. He sees something and takes it at face value. "Derp-a-derp-a-derp, I'm a clueless consumer, don't overwhelm me with so many decisions... why Microsoft sucks so much at business?"

No, they don't suck at business. You do.

I don't use their products, so they may not suck at business, but they suck at getting my business. And given how successful Apple has been at courting both consumers and professionals, I don't think it's at all ridiculous to argue that maybe Microsoft needs to tweak how they present their products to the world. Especially their most successful products.

Or I could use your logic:

Apple makes even more money and they only offer one version of Mac OS X. They don't suck at business. Microsoft does. QED.

Apple sells mobile phones, Microsoft sells software, how can you compare them? Or are you arguing that Apple PCs are more successful than Windows PCs?

It is very funny that you think you made your point with this example when you actually did exactly the opposite. Apple almost went out of business when they competed with MSFT in the PC/OS business, exactly because of those pricing/reseller strategies that MSFT employs.

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