Microsoft Vs. Lotus
Total Page：16
File Type：pdf, Size：1020Kb
Microsoft vs. Lotus In Fall 1988, Microsoft began making a number of its applications programs for its Windows 3.0 operating system available for purchase as a bundle, or software “suite.” Called Microsoft Office, the suite offered the buyer wordprocessing, spreadsheet, graphics, and electronic mail programs for less than half the price of the four programs purchased separately. In April 1992, Lotus launched SmartSuite for Windows, a bundle of its well-known 1-2-3 spreadsheet program together with wordprocessing, graphics, and electronic mail software. In October 1992, Borland and WordPerfect announced a cross-marketing arrangement under which purchasers of Borland’s spreadsheet and database programs would be entitled to steep discounts off the price of WordPerfect’s popular wordprocessing program, and vice versa. One industry observer commented on the deal: “Microsoft and Lotus still have a major advantage over [Borland and WordPerfect] because they own the products they bundle.” By the end of 1993, sales of software suites accounted for about 15 percent of the $8.3 billion worldwide PC software market. Microsoft was estimated to hold a 77 percent share of the suite business, Lotus 18 percent, and Borland-WordPerfect the remaining 5 percent. Table 1 gives price information on Microsoft and Lotus suites as of October 1993. Microsoft Lotus Microsoft Office SmartSuite Type of Name Suggested Name Suggested Program Price($) Price($) Spreadsheet Excel 495 1-2-3 495 Wordprocess Word 495 Ami Pro 395 or Graphics Powerpoint 495 Freelance 395 Database Access 495 Approach 295 Other Microsoft 80 a) Organizer 150 Mail Suite 750 b) 750 a) Not usually sold separately; figure is license value. b) For suites without Access; suggested price for suites with Access is $899. Source: New York Times, October 15, 1993, p. D3 The Concert Series A symphony orchestra is preparing to stage a short concert series. The first program in the series consists of music by Berlioz and Tchaikovsky, while the second program comprises music by Bartok and Stravinsky. The potential audience for the series can be thought of as divided into four, equal-sized groups. Members of the first group, whose tastes tend to the romantic, would be willing to pay up to $40 for a ticket to the first concert and up to $20 for a ticket to the second concert. Members of the second group, whose tastes tend more to the neo-classical, have the opposite preference: they would pay up to $20 for a ticket to the first concert and up to $40 for a ticket to the second concert. Members of the third group, confirmed Tchaikovsky lovers, would pay as much as $45 for a ticket to the first concert, but only $5 for a ticket to the second concert. Finally, members of the fourth group, who pride themselves on their sophisticated taste, would pay as much as $45 for a ticket to the second concert, but only $5 for a ticket to the first. All this information is summarized in Table 2. Willingness-to-pay of Concert Patrons ($) Patron type Berlioz/Tchaikovsky Bartok/Stravinsky Romantic 40 20 Neo-classical 20 40 Tchaikovsky lover 45 5 Sophisticate 5 45 .