Microsoft Enters Online Software Sales Arena. In a first for Microsoft, the software giant has announced it will sell one of its software programs through the Internet. Specifically, the company will distribute an add-on pack for Windows XP called Plus Digital Media Edition (DME).
The company has been talking about this for at least six or seven years now. There have been projects for online sales, for selling a single CD with encrypted versions of all the software the company sold on it, and on and on. Two big challenges always stood in the way — the delivery mechanism itself (not enough customers had broadband, and the products were getting bigger all the time), and the reaction of the distribution channel. Obviously the bandwidth challenges have been or are being solved, and in this case, the margins on a $19.95 product are so small that the channel probably doesn’t care. Retailers might be able to glean a couple of dollars on the product, but that’s it. As a software retailer, though, I would be protesting this move vigorously. It’s the thin edge of the wedge, and Microsoft WILL exploit this opening in the future.