Ramblings & ephemera

Microsoft’s real customers

From James Fallow’s “Inside the Leviathan: A short and stimulating brush with Microsoft’s corporate culture” (The Atlantic: February 2000):

Financial analysts have long recognized that Microsoft’s profit really comes from two sources. One is operating systems (Windows, in all its varieties), and the other is the Office suite of programs. Everything else — Flight Simulator, Slate, MSNBC, mice and keyboards — is financially meaningless. What these two big categories have in common is that individuals are not the significant customers. Operating systems are sold mainly to computer companies such as Dell and Compaq, which pass them pre-loaded to individual consumers. And the main paying customers for Office are big corporations (or what the high-tech world calls LORGs, for “large-size organizations”), which may buy thousands of “seats” for their employees at hundreds of dollars apiece. Product planning, therefore, is focused with admirable clarity on those whose decisions really matter to Microsoft — the information-technology manager at Chevron or the U.S. Department of Agriculture, for example — rather than some writer with an idea about how to make his colleagues happier with a program.

Leave a Reply

You must be logged in to post a comment.