There was a time when a computer cost about $1,000 and the OS was about $100. Many factors have come together to drive hardware costs down (most of which are embodied within the Dell Corporation). However, operating systems from Microsoft have stayed at around the same price point. Therefore, the OEM OS license makes up around a third of the price you pay for an entry level PC which works out of the box.
Here's an example. Right now Dell are shipping their entry level PC (with monitor) for $299. It is preinstalled with Microsoft Windows XP Home Edition and that's included in the price. Pricegrabber found me CDW selling the same OEM license of XP Home Edition for $101.99. Therefore, in the Dell package more than a third of the price is comprised of the OS. I wonder what the proportion would be if you excluded the monitor? Incredible.
Not only is that an amazing indicator of the pace of change in the industry over the last ten years, but it also makes you wonder whether the OS will eventually be more expensive than the PC. How will that change buying patterns?
Tags: technology, IT, PC, Microsoft, Dell, WindowsXP, Home Edition, economics