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Microsoft’s ‘loss leader’ Office 365 pricing strategy? NO THANKS | The Channel

Sales staff are paid on margin and profit and “can’t afford to sell products at a loss”, said Martin Hellawell, chairman at Microsoft LSP Softcat.

“I don’t believe in the principle that you need to sell at a loss on the first sale [to get a foot in the door]. I want to make money out of all we do to build a long-term sustainable business.”

Using a Trojan horse pricing strategy to get into a customer would “annoy” customers and potentially sets false expectations, said Tim Wallis, CEO at Microsoft cloud poster boy Content and Code.

He said customers require training to increase usage of Microsoft’s online services and that comes at a cost. “Microsoft should want partners to do a better job of selling services, not going for the cheapest price.”

Microsoft previously told channel partners at WPC last year that competing with Google Apps on price was a waste of time.

Theresa Connor, who works on US competitive strategy for productivity at Microsoft, said the “minute you engage in a price conversation it’s very difficult to compete”.

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Microsoft’s ‘loss leader’ Office 365 pricing strategy? NO THANKS.

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