Should Microsoft Be Forced to Unbundle Windows?
September 24th, 2007I don’t know whether you realize this or not, but whenever you buy a PC, you are also paying for a copy of Microsoft Windows. It doesn’t matter whether you use it or not, or whether you wipe the drive and install your favorite Linux distribution. It doesn’t matter what you want. You still have to pay the dreaded “Microsoft tax.”
How much? Well, that varies from PC maker to PC maker, depending on the quantities they buy and the particular configurations they choose. I’ve heard $40 for a basic OEM license, however. This may not seem like an awful lot of money, until you multiply that figure by tens of millions. Even forgetting the far-higher cost of buying a Windows upgrade kit at your local computer, it all ads up to billions of dollars.
In fact, Microsoft makes roughly 81% profit from Windows. What a racket!
Well, now a European think tank, known as Globalisation Institute of Brussels, is asking the European Commission to order Microsoft to unbundle Windows from new PCs. That would mean you’d only pay for Windows if you really wanted a copy. Otherwise, you can buy your PC naked, without an operating system and install whatever x86 compatible system you want. Or have it ship to you with a different operating system, but that opens a real can of worms.
Since Microsoft isn’t faring terribly well at the hands of the European authorities, this possibility ought to be taken seriously. However, even if such a demand were made, Microsoft could stretch out the process for many years what with stonewalling, legal challenges and all the usual tricks a multinational corporation can play to avoid facing the music.
Before I analyze the possibilities, I know some of you are going to wonder why Apple wasn’t mentioned in the same breath, since you can’t buy a Mac without Mac OS X. However, the situation is quite different, since Apple’s market share is roughly 3% worldwide, whereas Microsoft’s is well over 90%.
So you can see where there’s an incentive to end Microsoft’s lock-in deals with PC makers and somehow force them to compete on a level playing field. The problem arises, of course, as to what choices a PC maker can offer instead of Windows. Obviously, there is no Dell operating system or HP operating system, to cite two obvious examples. To be sure, I call these companies PC box makers or assemblers because all they really do is pick various components from the same parts bins, and package them with a somewhat distinctive case bearing the manufacturer’s logo.
Then they install a hard drive image that includes Windows, plus whatever junkware they’ve been bribed to include, and ship the boxes to retailers or customers.
If Windows suddenly isn’t a requirement, where do they go? It would take these companies years to build their own operating systems, with no guarantee of success, so they’d probably look towards a suitable Linux distribution. The only thing is that Linux isn’t necessarily so friendly to novice users, without lots and lots of careful packaging and advance configuration.
Yes, Dell does offer some systems with Linux preloaded, and HP is experimenting with a similar option. They might work well out of the box, but flexibility is rather limited. As soon as you stray beyond the default setup, you are almost certain to encounter problems with peripheral drivers. If you must use a Windows application, you may need to look for, say, an Office substitute, or be forced into the world of virtual machines.
And then you’re back to installing Windows, unless you use WINE, the open source software on which CrossOver Mac is based. That lets you run some Windows applications without Windows.
As far as I can see, of course, this reduces the prospects for mass market acceptance of Linux.
Some suggest unbundling Windows would give Apple a golden opportunity to sell retail Mac OS X boxes that’ll run on any ordinary PC. Maybe, but Apple makes the lion’s share of its Mac profits from hardware, not software. They offer a vertical solution, with the hardware and software designed to work well together.
Even if Apple could sell enough copies of Mac OS X to cover lost revenue from people who choose a PC box rather than a Mac — and that’s going to be awfully difficult — they’d confront the same chaotic compatibility issues that Microsoft must deal with. Instead of just working with a small number of carefully configured systems, Mac OS X would have to run on thousands and thousands of different PCs, many of which are home-built from spare parts acquired, perhaps, through a local computer outlet.
Unfortunately, such consequences aren’t always obvious to the tech commentators who think Apple should do its own unbundling. Maybe they are too young or they have forgotten the near-disaster of Apple’s first and final effort to license Mac OS X. It nearly killed the company.
Sure, maybe those licensing deals were badly negotiated, but that’s not where Apple is going these days. With sales of new Macs reportedly running at record levels and then some, there’s just no upside for Apple to sell its operating system to PC users.
In the end, unbundling Windows may result in very little change, at least on the short term. The options available to PC makers are few and not at all suitable for many of their customers. Indeed, the entire effort may be a gigantic exercise in futility.
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[…] Dennis Fisher wrote an interesting post today onHere’s a quick excerptI don’t know whether you realize this or not, but whenever you buy a PC, you are also paying for a copy of Microsoft Windows. It doesn’t matter whether you use it or not, or whether you wipe the drive and install your favorite Linux … […]
You forget the biggest competitor to a new copy of Windows, which is an old one. If a person buys a new “unbundled” PC to replace an older one, they most likely would elect, if given the choice, to reuse their existing Windows license, the one that came with their last PC.
Depending on the EULA on the your previous version of Windows, you may not be legally allowed to use it on another PC. That may not stop people from trying, although they may encounter activation issues.
Peace,
Gene
What’s good for the goose is good for the gander. When you buy a Mac you buy a copy of OSX (and a bunch of other software) and no doubt the price of the software is calculated as part of the price you are charged for the Mac. You can’t buy a software-free Mac just to run Linux either. In fact, somebody somewhere might care to argue that Apple is more monopolistic than Microsoft, since in order to run OSX you have to buy a Mac, whereas in order to run Windows you can buy any kind of peecee you choose. Do you guys want to see a situation where the purchase of an OS is completely decoupled from the purchase of a computer thanks to some anti-monopoly ruling, so you could buy a copy of OSX and run it on a (software-free) peecee or buy a copy of Windows and run it on a (software-free) Mac? Given the right installation software, maybe that could be made technically feasible. But I bet this business model would hurt Apple a lot more than it would hurt Microsoft, and I also bet the total cost to the consumer would skyrocket.
What a stupid and biased story. Most people don’t care about Linux or whatever. Most people who buy a computer just want to take it out of the box, plug in colour coded connectors, power it up and have a working computer. I guarantee no one who wants to run linux buys a PC with Windows on it and wipes it and then puts Linux on. They build their own PC’s
You probably want to read the article again. This argues against the logic of unbundling Windows, because Linux is not a viable alternative for many users. And the chances that Apple would unbundle Mac OS X are slim to none.
Peace,
Gene
The issue being that Apple has 3% of the world market and Microsoft has 90%, so the former is of little concern. The latter is more debatable.
I like the unbundling idea. Not that many people are going to forgo Windows, or that they’ll save money if they do. (As I understand it, MS doesn’t actually force vendors to buy Windows for every machine. The just get a much better deal on every copy if they do.)
No, the REAL benefit is that consumers will think of the OS as a PRODUCT, and evaluate its pricing rationally; in turn forcing MS to do the same. It is INSANE that I can buy a complete computer with Vista on it for $500, but buying the OS separately can cost as much as $400.
I used to build computers for myself and friends, to get better quality and to get a personalized feature set. This isn’t really economically viable any more. I just tell people to buy something with the CPU and OS version they want, and we’ll customize after the fact.
“I know some of you are going to wonder why Apple wasn’t mentioned in the same breath, since you can’t buy a Mac without Mac OS X. However, the situation is quite different, since Apple’s market share is roughly 3% worldwide, whereas Microsoft’s is well over 90%”
It could also be argued that since Apple builds the computer OS X is installed on, they’re justified in bundling it together. After all, you wouldn’t buy a new Toyota with a Ford engine in it, would you?
I like most of Microsoft’s hardware. Perhaps they should start selling Windows-branded PC’s and leave the OEM market to whichever OS the customer wants to install … including OS X.
Even if Windows were no longer a mandatory inclusion, most users would still purchase Windows in order to run the application programs they already have paid for and are familiar with, not to mention the desire to preserve compatability with their corporate work.
Initially, a few intrepid souls would consider switching to Linux–especially if it were preinstalled and fully supported by the computer manufacturer. Once Microsoft can no longer can force their OS, I’ll bet we would eventually see a growing market of other alternatives emerge.
However, I don’t ever see Apple offering OS X for non-Apple computers. The user experience would be compromised unless Apple controls “the whole widget”.
“It could also be argued that since Apple builds the computer OS X is installed on, they’re justified in bundling it together. After all, you wouldn’t buy a new Toyota with a Ford engine in it, would you?”
The proper car analogy might be Exxon (the world’s largest gasoline manufacturer) having an arrangement with every car maker where each new car buyer would be charged $10 for a full tank of Exxon gas and that $10 would be included in the car price, whether car buyer wanted the gas or not…even if the new car buyer brought their own gas.
Well, not so much, because Apple’s business plan is to sell vertically-integrated solutions. Microsoft’s is to sell anything they can ship, regardless of quality. 🙂
Peace,
Gene
Yes and Apple’s iPhone and iTouch and great pillars of quality aren’t they now……..
Depends on your point of view. The iPhone is doing fine, but there are reports of defective screens on some early production units of the iPod touch.
Peace,
Gene
So it depends whether you’re a Mac fanboi or not? You say that Microsoft just sells whatever it can even if it has problems yet Apple are allowed to sell whatever they want that has defects and it’s OK. In fact it’s better than OK apparently…..
I think you should pay closer attention to my original article. Demands that Microsoft unbundle Windows are largely based on its dominance in the marketplace. If you had 10 companies, each sharing reasonable market segments, and all had vertical solutions, I don’t think there’d be a reason to complain.
You’d want some sort of interoperability in such an environment, of course, but otherwise it could function, I suppose, if you didn’t mind ten versions of Adobe Photoshop to support 10 different systems.
Apple is just a bit player in the worldwide market, so there’s no pressure. If the positions were reversed, you could probably argue against Apple in various ways, but not now.
Peace,
Gene
Daniel is an certified AppleHater. Which isn’t as cool as it would be if he just admitted to being an MS-Lover.
I myself, PREFER Apple — with all of its warts, over MS and the many, many things that make MS ugly.
Go play your XBric666 Daniel, if it doesn’t burn down your house before sending it in for warranty service. Go play with your locked-in Word files, your IE-only websites, your DRMed WMA files that were ripped from your legally purchased CDs. Play your WMA files on your PlaysForSure device — oh, you can’t, they’ve been Zuned.
Oh, and FWIW, plenty of people do as Scott S. has done. They buy a PC, then strip Windows from it. Ever heard of hardware warranties?
Don’t bother regaling us with your stories of the hundreds of Macs you’ve owned, I know how to find apple-history.com as well.
That analogy would only work if everytime your tank was low on gas, you were charged another $10 for gas from Exxon, whether you filled up there or not.
Of course, it it were Microsoft, every third fill-up would require you to pay for an oil change and new sparkplugs whether you needed them or not.
Unbundling of Windows from the hardware would certainly cost one thing—MORE to the purchaser. M$ won’t sella Windows license unbundles for the $40 it coast bundled, so the consumer when buying a computer would then have to purchase the hardware and OS, unless a bundled version would be available through some legal quirk.
I for one and happy with Apple’s 3% worldwide share. They try hard to give us great products and yes, they aren’t perfect either. But so what! No OEM is but Apple does hit a lot of homers, more than others.
I’m also happy that Apple Makes The Whole Widget since it’s designed to work together pretty darn well and it does. For what it doesn’t is small to most users and often there are other solutions even if it’s Windows under Parallels, etc.
I’m always amazed that the Windows folks get all frothy over Apple with the 3% marketshare when you bring up ANYTHING about Windows and M$.
LOL. Interoperability? Apple? Don’t make me laugh. Where can I go out and just buy a new motherboard for an Apple PC or 3rd party software for an iPhone? Oh I forgot….. you can’t!
Oh do shut up you halfwit. How are word files locked in? They’re a de facto standard and most people out there (even Mac users) can access them and read them. For the record I have a G4 iPod, does it crash all the time? Yes, can I change the battery? No. Can I play the music I’ve bought on iTunes for it on another MP3 player? No to that too. If not for the fact that the dock connector means I can connect it easily to my car stereo it would be sitting in a corner gathering dust rather than being used. You make Microsoft sound like some sort of DRM haven and try to make it sound like Apple is the most open of companies which is completely incorrect. If you can’t justify your posts then you just look like an idiot. Making it personal also doesn’t help your cause either.
Ban The Dan is a certified moronic halfwit which is worse than anyone who blindly hates Microsoft OR Apple and doesn’t justify it.
Point of order: DRM-free songs from iTunes, the ones now available from EMI, can indeed run on other digital music players.
Also, Daniel: If I see any more inflammatory language here from you, I’ll block you from this site. Please settle down!
Peace,
Gene
So it’s OK for him/her to sign up with an inflamatory name as long as he/she backs up the status quo of the site?
[Oh do shut up you halfwit.]
Name-caller.
[How are word files locked in?]
Who ‘owns’ this file format? Is that open, like ODF?
[They’re a de facto standard and most people out there (even Mac users) can access them and read them.]
Just because 95% of people can use them doesn’t make them a standard or open.
[For the record I have a G4 iPod, does it crash all the time? Yes, can I change the battery? No. Can I play the music I’ve bought on iTunes for it on another MP3 player? No to that too. If not for the fact that the dock connector means I can connect it easily to my car stereo it would be sitting in a corner gathering dust rather than being used.]
YOY can I not make my PS3 games work on my friends Xbrix666?
[You make Microsoft sound like some sort of DRM haven and try to make it sound like Apple is the most open of companies which is completely incorrect.]
Like I suggested earlier, go play your DRMed WMA files that were ripped from your legally purchased CDs.
[Making it personal also doesn’t help your cause either.]
Uh, was it your post that has these words: “So it depends whether you’re a Mac fanboi or not?” And isn’t your post BEFORE mine?
[Ban The Dan is a certified moronic halfwit which is worse than anyone who blindly hates Microsoft OR Apple and doesn’t justify it.]
Sorry to burst your delusion, but NO ONE — and I can’t be more emphatic — no one, dislikes Microsoft — blindly. They all have VALID reasons.
Apple is a completely different scenario.
Apple sells hardware.
Microsoft sell software.
Microsoft have exclusive contracts with 2nd-party hardware vendors.
You can’t buy from those hardware vendors because of MICROSOFT’s contract with them.
There is no scenario where a legislator could demand that Apple sell half of its product – that’d be like insisting that Ford *must* sell cars without engines.
It doesn’t matter. Ban the Dan may be a little over-the-top, but I’ll accept it. If someone wanted to call themselves Ban Gene, that’s OK, but obviously I’m not being banned, since this is my playground. But that also means I can do what I want, although I am happy to let people have their say if they can hold their tongues when they get angry.
But calling someone a halfwit is rude, period.
Peace,
Gene
Daniel,
As has been suggested — I was a little over the top. You come into a Mac ‘playground’ and start calling us names — stupid, fan-boy, half-wit. This is a big button, and you pushed it. Really, what did you expect?
You are welcome to make critical judgments of Apple all you want. May I suggest that they are actually realistic complaints. Such as: Hockey Puck Mouse; Dalmatian iMacs; languishing Firewire; $2 ringtones (tho’ you do get both the tone AND the FULL music files for less than MOST 15 second ringtones); glossy screen only iMacs; selling iWork while iLife is free; and a few others.
Most Mac users don’t need to be educated to Apple’s real faults. There isn’t anyone here that wouldn’t give me atleast half a point on each of those complaints. Yours are silly non-existing.
FWIW, how is BtD inflammatory? Provocative certainly, but inflammatory?
Just to add to this, I have written a lot of stuff over the years sharply criticizing Apple and its products and policies. It’s one thing to use facts, of which there are plenty. It’s another to just throw bombs because someone doesn’t like the fact that I also put Microsoft’s feet to the fire.
Peace,
Gene
[I have written a lot of stuff over the years sharply criticizing Apple and its products and policies.]
I invite Daniel to return to this site and actually read some of your other stuff. He’ll learn that being a Mac user is NOT the big Apple LoveFest that he seems to believe that it is.
[It’s one thing to use facts, of which there are plenty. It’s another to just throw bombs because someone doesn’t like the fact that I also put Microsoft’s feet to the fire.]
So, what your saying, in essence, is that we don’t let Apple off with a pass — nor Microsoft?
Well, ‘some people’ think that MS seems to EARN more criticism.
Daniel,
Do we really need to list all of Apple’s and Microsoft’s ‘crimes’? Might we discover that the grievances against MS vastly outnumber the grievances against Apple? And that most of the grievances against MS are more pernicious than those grievances against Apple?
Microsoft shouldn’t be forced to unbundle Windows. If people don’t want to pay for the included Microsoft OS, then they can look at different options — building one’s own PC or buying a Mac for example.