But the pre-installed subsidizes a large part of the cost of the machine. I used to work for one of the top vendors of OEM-preinstalled-Windows-software (had 8 of the top 10 OEMS- pre-installing our stuff).
Extrapolating from the amount we paid some of the OEMs for our feature-reduced-versions of our software (we made money off of upgrades, and sometimes shared a percentage back with the OEMs instead of paying up front) I think much of Dell’s profit may come from the pre-installed stuff.
The other problem is that Windows needs some of the pre-installed software to work. Ever try playing a DVD with Windows and no -pre-installed software? Dell customers would get very mad if they bought a computer with a DVD-rom and it wouldn’t play DVDs or a DVD-RW that can’t make DVDs that they can play on a DVD player. Until Windows gets some of those features to provide a complete experience out of the box, I think it’s a good thing that Dell fills the gaps with third party software.
But the pre-installed subsidizes a large part of the cost of the machine. I used to work for one of the top vendors of OEM-preinstalled-Windows-software (had 8 of the top 10 OEMS- pre-installing our stuff).
Extrapolating from the amount we paid some of the OEMs for our feature-reduced-versions of our software (we made money off of upgrades, and sometimes shared a percentage back with the OEMs instead of paying up front) I think much of Dell’s profit may come from the pre-installed stuff.
The other problem is that Windows needs some of the pre-installed software to work. Ever try playing a DVD with Windows and no -pre-installed software? Dell customers would get very mad if they bought a computer with a DVD-rom and it wouldn’t play DVDs or a DVD-RW that can’t make DVDs that they can play on a DVD player. Until Windows gets some of those features to provide a complete experience out of the box, I think it’s a good thing that Dell fills the gaps with third party software.