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Michael's Minute: How to Buy Microsoft Windows XP for $50

After my expose piece on Microsoft last week, I promised one reader that I wouldn't write about Microsoft again for awhile. Unfortunately, I think I have to break my promise and here's why: As I've written about previously, the real key to desktop Linux gaining momentum is to get retailers to sell computers with Linux preinstalled. Sure, some people are smart enough to download software from our web servers then burn a CD and install it, but the majority of people want to buy a computer, plug it in and have it ready to go. Getting Linux computers onto store shelves sounds easy -- what store wouldn't want to stock computers for $200-300? (I just bought a computer for $249 and upgraded the RAM from 128MBs to 256MBs for 30 bucks and it is a solid little performer!) Consumers really want affordable computers and any retailer who stocks them sells large quantities of them. It seems like it would be an easy decision, right?

There's one additional dynamic that comes into the equation - Microsoft's money to discourage retailers who start selling large numbers of LindowsOS computers. Microsoft routinely offers financial inducements to computer companies to not carry LindowsOS computers. With $40 billion in the bank, it's an easy decision for them to use a few million dollars to block from major retailers. Every month that Microsoft keeps their monopoly position, it is another billion or so in profit. You've probably heard rumors of such behavior in the past and maybe you're skeptical because the tales are, not surprisingly, light on facts. So allow me to give you the facts from one such retailer to convince you.

LindowsOS computers have been available from TigerDirect, a popular mail order technology business, run by a savvy CEO, Gilbert Fiorentino. After selling thousands of LindowsOS computers in the last few months, TigerDirect describes their experience with LindowsOS in their most recent catalog, saying they have found it to be "faster, leaner, and more stable than Microsoft Windows," mentioning how "...LindowsOS never crashed, even in extreme testing situations," and then go on to say that they are "more enthusiastic about the LindowsOS than ever."

We've met with TigerDirect in the past and they've remarked what great sellers the LindowsOS computers have been for them and how they were surprised at the demand for Microsoft alternatives. However, at these same meetings, they talked to us about e-mails and phone calls from Microsoft attempting to bribe them to stop selling LindowsOS computers.

While TigerDirect has resisted Microsoft's pressures in the past, recently Microsoft has stepped up orders to their staffers to increase the financial incentives to impede LindowsOS sales at TigerDirect. At some point, Microsoft's monetary inducements become so large that it makes economic sense for just about any retailer to abandon LindowsOS - no matter how many computers they might be selling. TigerDirect is in the business to make a profit and if Microsoft will guarantee them a profit, nobody can begrudge them for taking it.

Microsoft's latest offers to TigerDirect are extremely lucrative and I wouldn't be surprised if they ultimately cave to Microsoft's pocketbook. Microsoft is giving TigerDirect unheard of discounts on Microsoft software, allowing them to sell Microsoft Windows XP for just $50 to all of their customers who have purchased LindowsOS computers. TigerDirect is paying less for some copies of Microsoft Windows XP than even the largest Microsoft customers like Dell. Besides radically discounting their software, Microsoft is agreeing to spend a lot of marketing dollars to advertise their products through TigerDirect and more specifically to past LindowsOS computer buyers. Additionally, Microsoft is paying TigerDirect to collect market research on LindowsOS computer purchasers, to figure out other ways to counter this threat to their monopoly (see exact copy of an actual survey Microsoft was using, here).

TigerDirect is receiving this favorable treatment from Microsoft because of their dealings with and they've been told there are more "opportunities" if they reduce or eliminate working with all together. It won't be unexpected if TigerDirect stops selling LindowsOS computers, but I do think it will be shortsighted. The only reason Microsoft is offering such treatment to TigerDirect is because of their relationship with Once they cease that relationship, they can expect Microsoft to revert to their previous style of business.

Customers will also lose out if TigerDirect gives in to Microsoft. is a competitive threat to Microsoft, which is exactly why they will be offering LindowsOS computer users the ability to purchase Microsoft Windows XP for $50. It's a good thing that LindowsOS users have the option of purchasing Microsoft Windows XP for $50 when the going price is $100-200, because it means that some people are already paying less for their software because of However, if LindowsOS is removed from the shelves, the special pricing will be gone as well.

Fortunately, there are new retailers signing up every day to sell LindowsOS computers and fill the demand for desktop Linux. Just one new example from this week is Explorer Micro, who now offers LindowsOS across their entire line of computers, starting at just $249.

We'll find out in a couple of weeks, when LindowsOS 4.0 is released, whether TigerDirect will continue to sell LindowsOS machines or if they succumb to the monetary enticements of Microsoft. I hope they keep giving consumers choice, because healthy competition is how we all get the best deals and version 4.0 is a phenomenal product. While we wait to see how the TigerDirect story will end, there might still be time to buy a LindowsOS computer from TigerDirect and be included in the "Microsoft Windows XP for $50" offer. If not, look to the growing list of retailers selling LindowsOS computers because they'll be next on Microsoft's hit list.

-- Michael
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