Microsoft Offers Indirect Partners an Incentive to Preinstall Office

By Peter Galli  |  Print this article Print


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Microsoft is trying to incentivize its largest indirect hardware partners and system builders to preinstall Office 2007 on their systems.

Microsoft is trying to incentivize its largest indirect hardware partners and system builders to preinstall Office 2007 on their systems, before these are sold to resellers, by offering them a referral payment when end users activate the license on those machines.

Qualified Microsoft partners were invited to participate in the Referral Payment Pilot Program for Office Ready about six weeks ago, but new systems with Windows Vista and Office 2007 preloaded were only made available for sale on Jan. 30.

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"The program is really designed for our large, indirect hardware partners who typically are not able to include Office on their PCs as these are sold through the channel. So this is a program designed to give them an incentive and reason to install Office on the PC itself," Chris Capossela, corporate vice president of the Microsoft Business Division Product Management Group, told eWEEK.

Those retailers and system builders that deal with customers directly and sell Office at the point of sale, make money on the sale price of Office, he said.

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But companies like Hewlett-Packard and others, which do not sell their PCs directly, the way Dell does, or through a retail store that they own, like Best Buy, had no incentive to attach Office to their PCs, he said.

"It's hard for HP to have a great business around Office as they are reliant on their channel partners," Capossela said. "So we designed this program, from the start, as an incentive program for HP, Lenovo and others to get them to attach Office to their PCs, which will then flow through the normal channels. We're really excited about the program, and we're being told by HP, Lenovo, Fujitsu, Sony and others that this is something they are really interested in."

The move, however, has been criticized by some of the smaller indirect system builders and hardware partners, who are not included in the pilot program, as well as from channel partners, who are concerned they will not get commissions if those preloaded licenses are activated.

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While Capossela said it would "be a wonderful thing if Microsoft was able to scale the program out to smaller, indirect system builders and hardware partners," he cautioned that "first we actually have to prove that it works."

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Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at www.eweek.com.


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