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Compact case
Case
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Reference no. 9-191-177
Published by: Harvard Business Publishing
Originally published in: 1991
Version: 10 April 1995

Abstract

Recent developments in the software business point to some of the reasons why companies offer their products or services in bundles. One is the opportunity to leverage market power, as Microsoft arguably has done by bundling applications software with its operating systems. Another reason for bundling is the economics of scope, as indicated by the emergence of software suites and the shift toward broad-line players (Microsoft, Lotus, and Borland-WordPerfect). But there appears to be still more to bundling: individual software programs continue to be offered in addition to suites, and suites are priced at a steep discount to the total price for the separate programs.

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Abstract

Recent developments in the software business point to some of the reasons why companies offer their products or services in bundles. One is the opportunity to leverage market power, as Microsoft arguably has done by bundling applications software with its operating systems. Another reason for bundling is the economics of scope, as indicated by the emergence of software suites and the shift toward broad-line players (Microsoft, Lotus, and Borland-WordPerfect). But there appears to be still more to bundling: individual software programs continue to be offered in addition to suites, and suites are priced at a steep discount to the total price for the separate programs.

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