News

Microsoft Considers Channel-Only Sales for Web Edition

• By Scott Bekker
• January 08, 2003

The PowerPoint slide deck, which was being presented to customers by a major OEM and used the Microsoft logo, said, "The SKU will not be available through the retail channel. The plan is for OEM, System Builder and NSP availability."

Asked to comment on the slide deck, a Microsoft spokeswoman said, "[Microsoft hasn't] determined whether it will be OEM or retail. There's not a decision yet on how Web Edition is going to be sold."

Usually Microsoft discloses final decisions about pricing and delivery for its software on the day that the product is released to manufacturing, which is generally two months before the product's general availability. Windows .NET Server 2003 is scheduled for general availability in April.

Microsoft plans to offer six editions of Windows .NET Server 2003. They are Standard Edition, Enterprise Edition, Web Edition, Datacenter Edition, 64-bit Enterprise Edition and 64-bit Datacenter Edition.

Microsoft's first attempt at selling its products only through partners came with Windows 2000 Datacenter Server in September 2000. That operating system had to be purchased as part of complete systems. Microsoft later used the OEM-only model for Windows Advanced Server Limited Edition, its first supported 64-bit edition for Itanium processors.

The Web Edition is designed to be a cheaper, functionally limited version of the operating system that Microsoft is positioning as competitive with Linux for the Web server market.

Functional limitations of the Web Edition include a scalability cap of two processors and 2 GB of RAM. Features that are supported in some or all other versions of Windows .NET Server 2003, but not the Web Edition, include Enterprise UDDI, Cluster Services, some Active Directory support, some VPN support, Fax Service, Services for Macintosh, the Internet Connection Firewall, Terminal Services and DC Promo.

IDC analyst Al Gillen saw one immediate downside of the channel-only sales approach.

"If they do that, in order to buy a less expensive version of Windows, you have to buy a new piece of hardware," Gillen noted. He added that the approach may make sense for Microsoft if the software giant needs hardware manufacturers' help to lock down the functionality of the operating system.