Gateway 2000?s claim to be able to offer upgrades to Office 97 for #20 has caused a storm of protest from UK firms, claiming that they cannot compete with the US direct seller on prices.
The storm of protest was unleashed by John Shepheard, UK general manager of Gateway 2000, who said on Tuesday that his company will undercut competitors, which will be selling the essentially reboxed software product for between #350 and #500.
Shepheard said: ?We have an upgrade for Office 97. It costs #20 and retails at #500.? He denied that Gateway had a preferential deal with Microsoft. ?It?s a matter of volume,? he said. But other companies claimed that gave companies that bought worldwide a big disadvantage because of the nature of Microsoft OEM contracts.
Rafi Razzak, managing director of system builder Centerprise, said: ?I think this is a disaster. This is a result of the deal they?ve struck in the US. They can buy an international version which is cheaper. There is no way any British company can compete with this.?
A source at another large UK company said it was puzzled how Gateway was allowed to sell the upgrade at the price it claimed. He said: ?The real question is what Microsoft?s strategy on OEM deals for Office 97 is. At the present we?re talking to Microsoft and asking them to clarify the situation. There?s a difference in price between the price on the Web site and the OEM price. I?m not sure how Gateway is managing to do this.?
The volume deal, Shepheard admitted, meant that other direct global players like Dell could also offer similar deals. Companies like Compaq and IBM do not bundle software, preferring channel partners to sell software with their systems.
Rob Barnes, who controls the buying of software for the Dixons chain, refused to comment on either Gateway's or Microsoft?s pricing policy
. No-one from Microsoft UK was available for comment.
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