Microsoft Increases Investments in System Builder and Distributor Channels

REDMOND, Wash. — March 8, 2006 — Microsoft Corp. today continued to outline investments in its system builder and distributor partner ecosystem, laying out three broad areas where the company continues to increase benefits to help its partners succeed. The benefits help system builders and distributors become more competitive in the marketplace by providing them with resources and tools based on their needs. The company highlighted successes with new programs such as a campaign to promote PC purchases from local system builders and a co-marketing program to assist system builders in marketing and advertising activities.

“System builders and distributors are under constant pressure from competition in the channel as well as from larger OEMs,” said Kurt Kolb, vice president of Worldwide System Builder Channel and License Compliance at Microsoft. “Over the past several months we’ve been working to create, tailor and extend benefits for system builders to address the unique needs of these companies, which are a critical component of not only our own sales channel, but also the overall health of the PC industry.”

These benefits Microsoft is delivering recognize the value system builders offer customers by providing the broadest range of customized solutions and services.

New Benefits Generate Widespread Interest Around the Globe

Key to Microsoft’s focus on helping system builders better compete is the Buy Local campaign, which offers customers a promotional Buy Local Bonus Pack for each genuine copy of Microsoft® Windows® XP purchased from any U.S. system builder that in turn has purchased the software from a Microsoft authorized distributor. This exclusive channel offering has been revamped, and on March 15 the Buy Local site will offer a new Bonus Pack worth up to $1,200 in goods and services, including a free D-Link wireless router (after a $50 rebate), a 30-day T-Mobile HotSpot subscription, free movies from CinemaNow, and training from New Horizons Computer Learning Centers.

Since the campaign was launched in October, nearly 600,000 customers have visited the Buy Local site; thousands of system builders have downloaded the site’s marketing support materials, and more than 85,000 customers have used the locator tool to find a local system builder. Later this year, the Buy Local campaign will be expanding to 11 additional countries. System builders can find more information about Buy Local at

“The Buy Local campaign and advertising support from Microsoft have generated hundreds of leads for us,” said David Yazdi, president of Source Code Corp. “The Buy Local Web site also provides an easy way for customers to connect with smaller system builders they may not have known about otherwise. We are really seeing the signs of Microsoft’s commitment to helping us compete.”

The most recent development in the marketing category is the worldwide launch of the System Builder Cooperative Marketing Fund, which is also available in the U.S. as the System Builder Rewards program. Similar to a frequent-flier program, the cooperative marketing program is targeted at the top system builders and allows them to accrue funds based on purchases from Microsoft authorized distributors, which can be used for marketing and advertising activities, or for resources to help develop technical expertise. The Cooperative Marketing Fund is offered in nine languages, and already more than 1,000 system builders have qualified to receive marketing fund dollars.

Further extending Microsoft’s commitment to supporting the system builder channel is the OEM Hardware Solutions Competency that launched in November as part of the Microsoft Partner Program. To date, more than 1,000 system builders have enrolled in the competency to take advantage of benefits such as internal-use software (free software for a system builder’s own use or testing, but not for resale), branding and logo materials, and account management support from Microsoft. Microsoft views the competency as a key enabler to bringing in more customers and helping system builders prepare for the upcoming launches of the Windows Vista™ operating system and the 2007 Microsoft Office system. The competency also makes it easy for customers to locate a system builder in their area who can customize solutions based on their specific needs.

The company also began offering free telephone-based technical pre-sales support for the first time to system builders in December, and unveiled the Small Business Specialist Community (SBSC) last summer. The SBSC provides system builders with access to tools that help them sell and market their solutions, and gives them an opportunity to further differentiate themselves as experts in selling to small businesses.

In addition to these programs, Microsoft’s continued product innovation includes investments that directly affect the customers serviced by system builders and distributors. The upcoming launch of Microsoft’s new Windows Vista operating system, for example, is expected to provide a huge new opportunity for system builders to sell new PCs that can take advantage of the operating system’s enhanced capabilities. Both Microsoft Partner Program registered system builders and distributors can now take advantage of a Web site that has consolidated resources and tools including marketing and operating information. The Web site can be found at

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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