Re: HBS WK: Who will win Microsoft or Linux?

>    Given prices LOW for a visibly lower quality, but reasonably
>    usable, version of a product, and HIGH for a higher quality
>    version, a large fraction of customers choose LOW.
>
>    If to this mix you add a medium quality version at an intermediate
>    price, as long as the medium quality version is perceptibly
>    different from the other two, and the MEDIUM price is sufficiently
>    high (but considered lower than HIGH by the customers), the MEDIUM
>    price will draw a lot of customers who would otherwise choose LOW,
>    but very few from HIGH.
>

I agree with this thought.

Now assume the cost of the "low" product is zero, as in the case of 
OpenOffice.org. I still might be willing to pay for StarOffice if it 
offered me additional features I felt were worth purchasing, and I might 
also be willing to purchase high-value extension that would help me 
perform specific business functions. And I would already be familiar 
with OOo, so there would be no marketing or sales expense needed to 
convince me that the basic product was good, just that the upgrades and 
extensions would save me more money/time than they cost.

- Robin