By  WILLIAM VAN WINKLE

	Really Reseller-Friendly Not only is Intel’s MGM45WU mobile motherboard part of the Rich Creek 2 form factor initiative—currently only sold through the channel—but it’s also compliant with Intel’s vPro remote management platform, which is yet another way for resellers to establish a value-add revenue stream.

Let’s look again at the Rich Creek 2 example. The market is awash with notebooks, many of which now use Intel’s Montevina (a.k.a. Centrino 2) platform. But the only way to get the far more serviceable and modular Rich Creek 2 is through the channel. Not a single tier-one OEM today sells RC2. The platform is a unique, high-value advantage for the channel.

And on the Microsoft side, delivering unique value for the channel, we have...? A special edition of Windows? Uhh, no. Some Windows bundle with other worthwhile software (no, not MS Works and Arthur’s Teacher Trouble)? Even if such a bundle does exist as a distributor promotion, it won’t come remotely close to the pricing major OEMs get. And hey, all you Twilight Zone fans, wanna see something really scary? Go check out www.windowsoffers.com. Until last month, you could buy a laptop with Windows and get a free six-month subscription to BLOCKBUSTER Total Access. Never mind that there’s about as much chance of a whitebook with Windows installed qualifying for this promo as the crazy guy in the airplane has of catching that gremlin on the wing. Apparently, only tier-ones are allowed.

Before the Microsoft PR police come knocking, allow me to direct your attention to www.localpcbuilder.com, where you’ll find some very cool incentives for people to buy their Vista PCs from local system builders. Three years ago, when I first saw this site, Microsoft was pumping XP by giving away copies of (no, I’m not making this up) Nolo’s Encyclopedia of Everyday Law. This almost sounds like a failed joke meant to tie in with Microsoft’s anti-piracy efforts. By contrast, the site’s current promos for customers when they buy Windows or Office with a locally built PC sound downright magnanimous.

A DPR-1260 wireless print server from D-Link could come in handy as an 802.11g bridge if nothing else. When a customer buys Office Pro or Small Business 2007, he or she also qualifies for a free HP Photosmart printer, although I sure couldn’t figure out which model. Windows SBS buyers get a Palm Treo 700wx or Treo 750, which would have been really cool 18 months ago. With Windows Vista Ultimate the customer gets—after going through all the rebate business—LapLink PCMover, a Maxtor OneTouch 4 Mini 80GB drive, a D-Link GamerLounge 108G router, D-Link’s Wireless Pocket Router/AP, and the somewhat ambiguous HP Photosmart, plus a $50 rewards check good for any non-Microsoft product at your shop.

I assumed that this offer would only apply to the retail versions of Windows, but no! I ran the model numbers and found that OEM versions qualify. The OEM version of Ultimate runs $179.99 on NewEgg. Even if the Maxtor drive is only worth $50 to the user (and the lowest price I can find online now seems to be about $80), combine that with the check and the customer is paying $80 for Vista Ultimate, getting other knick-knacks for free, and has a $50 incentive to return to your shop to buy more stuff.

I won’t deny it. That’s a good deal and a very friendly thing for Microsoft to do for its partners. But I’m not done here.

I know from being on the consumer and vendor side of things that free promos for cool products don’t pay off as much as you’d expect. A surprising number of buyers never file their rebate paperwork or circle back to use their coupons. The bigger problem is that even more buyers never get to learn about the promo. They only want to know one thing, the bottom line price at the register. About that pricing. First off, I’d like to send kudos to Microsoft for realizing how totally astronomical its pricing was on Vista at launch and doing something about it. If you recall, Vista Ultimate started out in January of 2007 at $399. Today, it sells on Newegg for $267.49, and the OEM edition is a comparatively modest $179.99. This resembles the dive that Vista Home Premium took from an original $159 to today’s $119. The OEM version is only $99.99, and why the 3- and 30-packs cost more per unit on Newegg is beyond me.

	Free Windows? Almost. Depending on how you assess the value of Microsoft’s Buy Local Bonus Packs, users could feel like they’re getting the cost of Windows covered by promotional extras when they buy from your shop.

All of this sounds fantabulous until you realize that, as the New York Times reported in 2007, Microsoft has an emerging markets bundle of Windows XP Starter, Office 2007 Home and Student, Windows Live Mail Desktop, Microsoft Math 3.0, and Learning Essentials 2.0 for only $3. Yes, three US dollars—less than the cost of an espresso drink. Supposedly, this is to combat the prospect of pirated copies floating around China and Russia for only $1.

	Covering the World With Windows. Is it fair that Microsoft is willing to give away Windows for only $3 to emerging markets while U.S. system builders are left with little leverage in their markets?

Am I saying that Microsoft should slit the throat of its greatest cash cow and practically give away Windows across the world? No. Well, maybe a little bit. Clearly, selling Windows for $3 isn’t about getting rich, so it must be about securing market share. Fine, let’s talk about market share. W3Counter.com showed desktop Linux share up from 1.25% in May of 2007 to 2.02% in March of 2008. Is that increase coming from troglodyte hobbyists? Hardly. According to BBC News, Michael Dell himself uses the increasingly popular (and totally free) Ubuntu Linux distro on his Precision M90 laptop. Dell started selling PCs with Linux pre-installed in 2007 and now ships them around the world.

Linux comes pre-installed on most of the shockingly popular ASUS Eee PC machines, and you can expect it to be the de facto choice for ultra-low-end student notebooks like the Classmate PC. Oh, and I’ll go way out on a limb to posit that if the economy should run into real trouble (ahem), people struggling to pay their bills might opt for a free OS rather than one that is now generously discounted to between $100 and $300. In 2005, IDC stated that Turbolinux held 25% desktop share and 62% server share in China. How bad does a first-world economy have to get before it starts looking for the strategies that are helping third-world countries to thrive?

I’m not going to be another voice raised in premature or probably futile effort to predict the death of Microsoft. The titan continues to prove its resourcefulness and tenacity over time. But I will predict that at least the next few years will be harder for everyone, Microsoft included. The rules are changing. If not for the ongoing march of support resources toward Vista, I probably would have reverted to XP long ago for its greater usability. (As it is, two of the three PCs in my house still run XP, and there isn’t a single reason to change them.) I don’t know anybody who needs Vista. I’ve even abandoned Vista Search in favor of Google Desktop because Microsoft willfully ignores my thousands of WordPerfect files.

	One Size Shouldn’t Fit All. Vista Ultimate is a very popular version of Microsoft’s OS, but is it so strange to think that there could be a Windows version specially crafted for channel resellers with features that play to the channel’s strengths and capabilities?.

There are so many reasons for users and resellers alike to desire Microsoft alternatives. Usually, those are ideological or technical reasons, but now we can add economical reasons as a significant force, and that changes things. Now the onus is on Microsoft to step up its game. When gamers, IT managers, media enthusiasts, and grandmothers can all get what they need from Linux, Google, Mac OS, or whatever for less money, the laws of nature in a bad economy will change. The old Windows/Office paradigm may well break down.

The trouble with this prospect for the channel is that those alternatives offer little to no margin opportunity. Microsoft will lose share, and the channel will lose money. Microsoft needs to follow Intel’s example and do more than cut prices and offer a few incentive trinkets. It needs to come out with affordable and superior-value products specifically for the channel, products that a reseller with personal touch can educate buyers about. Like what? I don’t know. How about “Vista Business Plus,” which would feature a bunch of integrated management features that tie into a micro-business edition of System Center Essentials? How about a version of Home Server that ties into a subscription-based storage service run at the reseller’s site? Stuff like that. Stuff that requires real interaction with local experts, not some first-level, outsourced arm of a big OEM.

I recognize that the channel needs Microsoft. We need the margin and revenue streams Microsoft can help make possible. But Microsoft needs to give more credence to how the channel can help promote and spread its products. This is not a time for lip service. Microsoft needs to help give the channel more unique value, as Intel does, and leverage the channel’s unique abilities across all sectors. Clearly, the go-it-alone philosophy will be detrimental to Microsoft in a bad economy. Cooperation may be one of the few things that help us make it through to the other side intact.