Vista pricing - update

  Forum Editor 09:59 10 Mar 2007

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.

  Kate B 12:31 10 Mar 2007

That is disappointing, and rather surprising: I've always been impressed by the Microsoft press office.

I raised the subject of differential pricing with Adobe when I had lunch with them the other day and they were much more forthcoming. They talked at length and in detail about how, for example, they have the same sized marketing team covering (I think) Ireland as they do the whole US; the fact that they produce their packaging in Europe where production costs are higher; the need to hedge against currency movements; different tax regimes in different European countries, the fragmented nature of European economies - it all made a lot of sense.

I didn't feel patronised and I didn't feel that they were avoiding the issue: quite the contrary, they were seeking to explain it to me and I came away feeling as though actually, the price difference was largely justified.

  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!

  Kate B 14:58 10 Mar 2007

I asked Adobe about that, too: they said (not unreasonably) that it was a security thing. Many websites require you to have an address in the country and a credit or debit card registered at an address in that country.

  Newuser38 15:40 10 Mar 2007

Thanks FE for the update also for the article on the same subject in the new PCA.

I am not suggesting that people do it, but would feed back to Windows Marketplace as mentioned in the article be expected to give a result.

Are Microsoft PR aware of the PM website and the level of interest in this subject?.

I hear what KateB is saying about Adobe response but there are quite a number of companies who will allow downloads fom US, as I have said before, and as stated in the new PCA, one must expect tax etc charges on top of the web price quoted.

A check will soon reveal if it is beneficial to buy goods of any sort from US direct. The customs advice service helpline are helpful and one or two of the major international handling companies will advise on their charges and 'tax' liabilities. My 07 PCA article on the subject in general is also helpful.

  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?

  STREETWORK 21:11 10 Mar 2007

I find Microsofts reply to a reasonable request quite dismissive and totally unwise.

I Sell a service to all sorts of people and quite often receive questions, it would not be very good for me to say 'sorry I do not know, and I cannot be bothered'.

I would, perhaps, reply to this email sent by Microsoft and ask why such a billion dollar organisation cannot justify its pricing. Ahhhh, maybe that's it, 'dollars' if you do not trade in dollars then we can charge you what we want to...

  Totally-braindead 21:30 10 Mar 2007

I'm a bit surprised they wouldn't even attempt to explain their pricing policy.
Considering the size of the company I cannot believe that there was no one available to explain.
The only conclusion I can reach is they decline to answer in the hope that the problem will go away.
My petition against the pricing has slowed up considerably, perhaps partly due to people believing that nothing can be done and therefore there is no point even trying.
I've stated that I believe their pricing structure is unfair, its the same product after all and they ask people in the UK to pay considerably more than their US counterparts and refuse to explain why.
I don't expect them to answer you FE. I'm glad to see you're still trying but it seems to me they are charging us more simply because they can and will continue to refuse to substantiate the price because they believe the complaints will just die away if they give it long enough. Six months down the line will you still be asking them the same questions assumming they refuse to comment FE?

  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?

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