The OpenOffice Project has sent a letter to Michael Dell, showering praise on Dell's chairman and CEO and asking him to consider pre-loading OpenOffice onto PCs. The letter is the result of a flood of requests on Dell's online suggestion box, IdeaStorm, for Dell PCs pre-loaded with both Linux operating systems and the open-source suite of desktop productivity applications. John McCreesh, marketing project lead for OpenOffice.org, also asked Dell to consider making a financial contribution to the software's development.
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Member since:2006-05-12
"How is this charity?"
Dell has to pay loads of money for MS Office, but this is still less than they charge customers for it.
On their low end ($300) PCs, if not for upselling software they probably would not make profit on them at all.
The ability to create word documents is seen as an essential function even by the most basic users.
Giving people OOo for free to do this would hinder the ability to upsell them MS Office (read: eat profits)
On Dell's site, Microsoft Office Home and Student costs about $200 on top of the system price.
Dell probably makes something like $75-$100 on each copy sold and on budget computers that is enough to make or break you.
Open Office is free, they may be able to charge $15 - $20 for it but in order to stay profitable they will probably have to raise the hardware prices for the lower end systems to compensate.
Member since:2005-07-02
"Open Office is free, they may be able to charge $15 - $20 for it but in order to stay profitable they will probably have to raise the hardware prices for the lower end systems to compensate."
Except that they would be able to sell their systems at an overall *lower* price than the competition...
Member since:2005-07-06
Dell makes money by selling MS Office to its customers. If these customers take the free OO.o rather than Office Dell loses money.
The only way it would make sense is if Dell be able to steal customers from other competitors due to offering OO.o. I find that rather unlikely.
Member since:2005-07-08
If these customers take the free OO.o rather than Office Dell loses money.
They also lose money when customers choose their entry-level suite instead of Office. So if they can't sell Office, they might as well provide something that's free rather than an entry-level suite that costs them some amount of money per license.
Member since:2006-01-11
Not quite. Dell has to pay loads of money for MS Office licenses.
You are incorrect!. Dell will sell you MS Office and I'm sure they get resller pricing which means they make a load of money selling MS Office.
They have NO incentive to bundle OO.o because it's free and nobody is going to pay Dell for OO.o.
There is no benefit for Dell because they aren't competeing with Microsoft.
Member since:2005-07-08
Dell will sell you MS Office and I'm sure they get resller pricing which means they make a load of money selling MS Office.
I'm sure they make money selling Office. But they still need to pay for the licenses. Nobody is going to pay Dell for OpenOffice. They are going to pay Dell for a PC and get OpenOffice as well. It doesn't cost them anything, so why not?
In the scheme of the Dell sales and marketing paradigm, OpenOffice wouldn't compete with MS Office. It would simply replace the entry-level suites like Works. For most users who use productivity software extensively, MS Office will remain the compelling value-add that it always has been. Every everyone else, OpenOffice is superior to an entry-level suite at no extra cost.
Member since:
2005-07-08
Asking them to bundle OOo AND give money to it is a charity plea.
Not quite. Dell has to pay loads of money for MS Office licenses. Not as much as consumers and businesses do, but a good chunk of change nonetheless. They also pay for Works or WordPerfect or whatever. OpenOffice is not only offering Dell as many licenses as they want at no cost, but they hinted that they would like to make a special version of OpenOffice for Dell (whatever that might entail).
This isn't some trialware , this is a full productivity suite! People hate the crapware that comes preinstalled on their OEM PCs. At OpenOffice is something useful that adds quite a bit of value to the product. Dell's target market has clearly indicated that they would like to see OpenOffice bundled with Dell PCs, and the OpenOffice team wants to help them make it happen.
Nobody has offered to give Dell a free productivity suite until now. Dell can charge the same for PCs with OpenOffice as they would have for PCs with whatever entry-level suite they were offering before, and they get to pocket the usual licensing fee. Of course it wouldn't make sense to offer an entry-level suite when OpenOffice is available. You would either pay extra for MS Office or get OpenOffice instead. Dell would be offering a more capable product for the same price and would be making more money in the process. How is this charity?