How Kempin Cracks the Whip
Joachim Kempin, Microsoft's senior vice-president, manages the company's crucial relationships with PC makers. Here's how he does it:
Kempin negotiates Windows licenses with PC makers once a year. Prices are based on volumes sold but makers get a few dollars off each copy of Windows by using Microsoft's latest technologies. That keeps them aligned with the software giant's strategic initiatives--such as the universal serial bus (USB), which links peripherals to PCs. The USB was shipped as part of Windows 98.
Microsoft also sells mice, keyboards, and software applications to PC makers. While orders for Windows and other products are not tied together, PC executives say privately that they believe they get discounts for ordering a wide range of Microsoft products.
Kempin persuades PC makers to promote Microsoft's technologies, such as Windows and the Internet Explorer browser, by offering them money for featuring its brands on their PCs, shipping boxes, and Web sites.
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