Vista pricing - update

  Forum Editor 09:59 10 Mar 2007
Locked

Many of you will recall that I promised to try to speak to a senior Microsoft person about the pricing anomaly for Vista - we have to pay substantially more here, in the UK than our American counterparts.

I asked the Microsoft Press Office to find someone with the authority to speak to me on the record about the reasons for the differential. Let me say at this point that the MS Press Office is always extremely helpful to me. Over the years I've asked for (and received) all kinds of help on all kinds of issues, and as far as I'm concerned our working relationship has been excellent.

All of which meant that I was more than a little surprised when - over two weeks after making the request - I received the following response:-

"Hi Peter,

Just a quick mail to let you know that unfortunately, I will not be able to provide a spokesperson for interview, as per your request.

We don’t have anyone available who is well versed on this topic to speak to you within your deadline.

Apologies for any inconvenience that this may cause."


The world's largest software company doesn't have anyone who is well versed on this topic? Forgive me Microsoft, but I find that a little hard to believe. I think the truth is that they don't have anyone who is prepared to talk to me on this subject, and that's a little diappointing, to say the least.

  mgmcc 12:52 10 Mar 2007

What I find it hard to justify is that Upgrade copies of Vista can be downloaded from Windows Marketplace priced in US$ (not a problem), but ONLY if using a credit card WITH A US BILLING ADDRESS!

  Forum Editor 17:57 10 Mar 2007

allow downloads from US sites - it has nothing to do with security, or having an address registered in the US. The VISA system is global, and a site in Louisiana can perfectly safely sell downloads to someone in the Siberian wastelands. It's true that lots of online retailers will not deliver physical media or hardware to addresses mother than the one registered to the credit card, but that's different - it's to combat card fraud.

Companies that don't allow downloads to Europe from America are avoiding the necessity of VAT billing and accounting, or they have some other agenda - it may be related to marketing policies.

Microsoft isn't opening the US Windows marketPlace site to European consumers for reasons of its own, and that's fine, but there's absolutely no reason why the company couldn't use European servers, based in say, Ireland, for the job.

I'm not unreasonable, I don't expect to be privy to Microsoft's confidential marketing policies, but I do expect to be treated like an adult. Telling me there isn't anyone who is well versed on the topic to speak to me is just silly.

  Forum Editor 18:09 10 Mar 2007

As you're aware, American companies selling online to European customers must charge and account for VAT. They can do this in one of three ways:-

1. Charge VAT at the point of sale, on the American site, at the rate prevailing in the country of destination.

2. Set up a European company, based in a European country, and route all European orders through that company's download servers. VAT on all orders must then be charged at the rate prevailing in the country where the server is based.

3. Keep the download servers in America, and select any European country as the country in which the company will be accountable for VAT. The tax is then levied on all orders going to Europe at the rate prevailing in that country.

All three of these systems are widely used, although the most attractive if domestic consumers are the target market is option 3. It means that the originating company can select the European country with the lowest VAT rate as its accounting country, thereby keeping the software price low.


Microsoft could easily run any one of these systems. The only considerferation apart from that is bandwidth. Offering very big downloads (like Vista) via an America/Europe undersea cable is going to put a big strain on bandwidth if lots of people start buying that way.

  powerless 20:16 10 Mar 2007

So what's next?

  Flak999 22:23 10 Mar 2007

Like I have said before in a previous thread on this subject, this is "Blatant profiteering" nothing more! They could have replied to your question, they just chose not to!

They will find to their cost that we in Europe are not the naive unsophisticated simpletons that they think we are! Their attitude is one of the major reasons that software piracy is still the lucrative business that it is!

Bit torrent anyone?

  LastChip 23:17 10 Mar 2007

Disappointed, yes; but not surprised.

It has seemed to me for quite a while now, Microsoft treat their customers with contempt. Not only on this issue, but the way they seem to assume everyone is a pirate and introduce quite draconian technology to combat the problem. Yes, I know it has to be addressed, but quite so forcefully? It's done little good anyway, as Vista's already been cracked. A foregone conclusion I suppose, but one which will introduce it's own set of problems. I expect to see more sophisticated hacks over the coming months.

As for the issue of Credit Card purchase, if there really was an International issue, we wouldn't be able to use them abroad - would we! Common sense I would suggest.

Kate B, I think you've been conned (at least partly). But at least Adobe had the courtesy to try and offer an explanation (excuse?). Full marks to them for that.

As far as Microsoft goes, I believe there is one reason and one reason only the price differential exists. They think they can get away with it and to a point, they can. There are members here that have already bought Vista and have therefore decided that Microsoft's pricing is reasonable. At the risk of repeating myself, I will be one of those people voting with my wallet and staying well away.

It seems from various press reports, Steve Bullmer is already laying the foundations for back-tracking on Vista's sales, saying "forecast sales may be overly aggressive". In other words, sales are less than they thought they would be. I wonder why?

  LastChip 23:36 10 Mar 2007

one has to ask Why?

How can a company justify the same size marketing team for (maybe) the UK and Ireland, compared to the continent that is the USA?

Why produce the product packaging locally if it's more expensive?

Why not use a server for downloads, thereby cutting out those costs entirely?

I don't dispute their costs may be higher, but if that's the case, they should be looking to reduce them, not charging significantly more for the product.

This is junior financial management, not rocket science!

  Forum Editor 00:08 11 Mar 2007

is unlikely to be substantially cheaper than packaging manufactured in Europe, if it's cheaper at all, so I'm afraid I don't buy into that as a possible reason for price differentials - at least as far as Microsoft is concerned. Even if there is a difference it surely wouldn't account for the huge disparity between US and UK selling prices.

  Forum Editor 11:36 11 Mar 2007

is to make Microsoft software available globally via download. It's technically easy to charge sales taxes as they apply at the download destination, and technically easy to account to destination tax authorities for taxes charged to their consumers.

Never has the old saying 'where there's a will there's a way' been more true. What's needed is the will, and a cynic might speculate that whilst big software companies can vary selling prices to reflect what they think the destination market will stand, there's no incentive for them to offer one-price downloads to all of us.

In the absence of a commonsense explanation from companies like Microsoft such speculation will be rife, and can ony be damaging to the supplier/consumer relationship.

  Forum Editor 11:37 11 Mar 2007

I had the same thought, and I've already set the process in motion.

This thread is now locked and can not be replied to.

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