Linked by Thom Holwerda on Fri 12th Feb 2010 22:55 UTC
Microsoft Sometimes, the sheer size of a company like Microsoft can make it quite hard to see and realise just how large and profitable such a company can really be. In these kinds of situations, there's nothing like a clear graph to make all those pretty numbers tangible. Up to a point.
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A Good Portion .....
by Pelly on Sat 13th Feb 2010 21:22 UTC
Pelly
Member since:
2005-07-07

A good portion of Microsoft's earnings come from the multitudes of corporations that utilize and have, 'volume,' and/or, 'enterprise,' licensing agreements with Microsoft. Either directly or through a support vendor.

These licensing agreements are usually written for a locked-in (minimum)number the company has agreed to pay. If they don't utilize the number of licenses they purchased, they still have to pay. If they exceed the number, they make up the difference.

I actually saw such contracts & agreements when I worked contracting for a major insurance company. There are multiple ways to enable the contract.

1. Windows OS only.
2. Windows OS with MS Office.
3. Windows OS with other MS offerings, etc.
4. Server Platforms, etc.

The pricing scheme surprisingly was quite reasonable. Due to the volume (more than 6,000 seats at this company) the cost, per seat, was only about $65 for the company to put Windows and MS Office on a desktop or laptop computer.

The contract I saw had the company paying MS $390K for just those licenses.

If an MS sales rep worked the contract, there was always better price negotiation. When we dealt with a support vendor, they had their middle-man mark-up to & profit margins consider.

Not a bad pay-day for MS, no matter who works the deal.

As long as individuals, companies & corporations are willing to pay the prices that MS charges, then Microsoft will continue their pricing models.

Is it wrong? Not really. It's business. Microsoft has never claimed to be a Non-Profit company.

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