In a TechRepublic article titled Server ‘roles’ to save companies headaches, not cash, I read that Microsoft will be offering slimmed-down installs of Windows Server 2008. I also read that these slimmed-down versions of the OS will not get you any discounts on the price you pay for server licenses.
I’m reminded of something similar in the food service industry — specifically, Ruby Tuesday. There’s an article in Time Magazine about Big Chain Restaurants’ New Small Portions that discusses how TGI Friday’s and the Cheesecake Factory are offering smaller portion sizes for entrees, with an attendant reduction in price as compared with the full-size portions they offer. In 2004, Ruby Tuesday tried doing that as well, complete with nutritional information printed in the menu — but, like Microsoft, it didn’t cut back on the prices any when it cut back on your return on investment. You would have paid the exact same price for the privilege of being given less of the same food, all in the name of “health”.
Unsurprisingly, Ruby Tuesday’s little plan backfired, and everyone hated the idea. Ruby Tuesday no longer offers those reduced portions with nutritional information in the menu. This is a sign of a fairly healthy industry, even if it’s not exactly a health industry — when someone tries to squeeze extra profit out of you without providing at least the same value for your dollars spent, you’re likely to say “No thanks, I’m going somewhere else.” The software industry, unfortunately, is not so healthy — Microsoft sells you less for the same price, and you think it’s normal, or even some kind of improved value.
From the article at TechRepublic:
Laing said such pricing would also further confuse Microsoft’s product lineup, which already has different pricing options based on the scale of the server. With Windows Server 2003, there are standard, enterprise and data center versions of the main OS, as well as a separate storage server, compute cluster edition and small-business version.
“It’s very hard for everyone to manage if you go by scale and then the specific role they are going to run,” Laing said. “It would be very hard to do.”
I think it’s a sign of how sick Microsoft has made the software industry that statements like this can be made with no irony or humor, in all seriousness, and people just accept it as a reasonable statement. Think about it for a moment:
Microsoft already charges you for your server OS software based on how much use the system will get. If the system gets more use, it needs to be licensed by a more expensive agreement. In other words, the more use you get out of it, the more it costs you.
On the other hand, you do not have to pay specifically for its capabilities. If it is of more limited capabilities, you still pay the same price. This is, according to Laing, because it would be too “confusing” to combine pricing differences for different ranges of capability with pricing differences for how much you use it.
When you buy a chainsaw, you pay for it based on its capabilities — not based on how many trees you’ll cut down. When you buy a car, you pay for it based on its performance, efficiency, and safety characteristics — not how many miles you’re going to drive it. When you buy a laptop, you pay for it based on its performance and resource specs, peripherals, and physical characteristics (keyboard, screen size, weight, et cetera), not based on whether you use your laptop all day for work, how many hours of World of Warcraft you’re going to play on it per week, or whether you’re planning to loan it to family members now and then. When you buy a meal at TGI Friday’s, you expect to pay a lower price for smaller portions — you’re paying for the quantity of food you get, all else being equal, not for how much of it you actually eat.
Software, however, is different — and Microsoft made it that way. Yeah, the software market is pretty damned sick, and Microsoft is spreading the plague.