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Software Piracy Due to Expensive Hardware, Says Ballmer
frdmfghtr writes "ZDNet is running a story where Steve Ballmer tries to pin the blame of software copyright infringement on expensive hardware: 'One way to stem piracy is to offer consumers in emerging countries a low-cost PC, Ballmer said. "There has to be...a $100 computer to go down-market in some of these countries. We have to engineer (PCs) to be lighter and cheaper," he said.' Does he think that cheaper hardware will make copying software harder to do?"
When Google integrates an OS as their service. Imagine that one-day a Google like service where you turn on your computer and it connects to Google without any local OS (other than a BIOS and hopefully the BIOS is the Open Source one). Your files, settings and information are stored on the service. Sure you could have USB drives locally to store private info if you desire. But I wonder what Mr. Ballmer would say to that lowest of low price cheap hardware? You could take the money that would have been spent on the OS and allocate that to help pay for the service. At $100/12 = $8 a month; even at $300/12 = $25 per month - not bad having a use anywhere service whereby you don't have to maintain the OS or the Hardware.
I'm sorry, but less than 24 hours after a story here discussed the pirate industry in Russia, and made the point that the average monthly wage is $240, and some software licences cost $600, comes this?
Please. Cheaper hardware is going to exacerbate the situation by providing even more poor people with the desire for new software that the can't affoard. The only solution is to take computers from poor people. I'm joking, but I hope you can see my point...
It's not an accident. Microsoft has been trying for a long time now to convince consumers that software is more valuable than hardware. The problem is that I don't think Microsoft understands the issue of tangibility. Even the greenest user understands that hardware is tangible (they can touch it, see it, pitch it out the window, etc.) while software is intangible (can't do much other that look at it and interact with it).
When you take into account how natural it is to place more value on a physical object vs. an intangible (e.g. a service rendered such as plumbing), is it any wonder why consumers are ignoring Microsoft's mind-bender campaign?
Javascript + Nintendo DSi = DSiCade
is because Microsoft now has cheaper versions of the software available to put on these cheaper PCs. The stripped down versions of Windows, for instance. It would certainly be hypocritical to say PCs should cost $100 when the OS itself costs more.
And the reason for this, after all, is to open up the low-end market so that Microsoft can tap that revenue source. After all, if they offer something for $200 normally, and offer a strip down version for $50 such that people can afford it, it's still better than getting $0 because people can't afford to pay for it and end up pirating it.
The funny thing is, from a certain standpoint, Microsoft is actually NOT trying to stop piracy (the official line is always to be anti-piracy, of course), but Microsoft probably realized that their software will be pirated, and in some ways, this loss leader in the emerging markets should strategically be allowed. Because then, Microsoft will dominate even more, especially where Linux is popular. On the other hand, Microsoft can't grow that market if the people cannot afford to pay for the hardware. Keep in mind that Windows is as dominant as it is today partly because it was easy to copy Windows. They could have put really difficult schemes to prevent piracy, but they didn't, because ultimately, that's not how they make their money anyway. They make their money by having dominance and then sell software based on it (Office, for instance).
And in the future, Microsoft want DRM and they want to do transactions. They want more people on the internet using windows, and the way they can get that is to have as many people as possible with little cheap boxes that run some form of Windows that can at the very least access the internet so they can spend money through Microsoft channels.
> a $100 computer to go down-market in some of these
> countries. We have to engineer (PCs) to be lighter
> and cheaper,
How much cheaper can Microsoft expect hardware to get? It's almost costless as it is now.
The Microsoft OS is the real cost barrier. The cheaper hardware gets; the more folks will want an OS just as cheap. Microsoft will have to lower their prices.
When Microsoft lowers their prices then they will have to partition their market into full/higher cost solutions and chopped/lower cost solutions; this will give Linux a clear advantage because Linux can offer a fully appointed OS with no cost differential.
I expect Microsoft's momentum to carry it a few more years yet... but after that the energy will have bled off and people will begin to see the benefits of Linux more clearly.
Codifex Maximus ~ In search of... a shorter sig.
Exactly. A rational response to piracy would be to lower prices. The hidden problem here is Microsoft is loath to lower prices, because doing so would hammer its stock price and lead to an inevtiable downward stock price spiral.
Microsoft is stuck between a rock and a hard place. High prices in the third world inevitably lead to piracy and an added incentive to move to Open Source software. Lowering prices means lower margins and a drastic reduction in market capitalization.
With the advent of cross-platform toolkits like GTK+, OpenGL, and OpenAL, it's becoming much easier to write an application and make it cross-platform with minimal effort AND have it perform excellently. (As opposed to Java, which is a great way to piss off your user by hogging 250M of memory for a freaking IM client... God those were painful days before the TOC protocol and later gAIM. Anyone remember the nightmare that the Java AIM client was?)
retrorocket.o not found, launch anyway?
That's why the best approach from a business perspective seems to be bundling or packaging fancy software with hardware, services or both. The software may be the hook to get people in, and you might even give it away (and while you're at it, make it Open Source, it makes your customers happy). But tie it to your expensive hardware. Or just convince companies that it works best with your expensive hardware. Or that your expensive services personnel are best equipped to customize or build value-added functions on top of it.
This is the whole reason that quite a few tech businesses have embraced Open Source. It's not a function of their love of the community.
My thoughts exactly, this would create an indefinite cash flow stream, whether the service is used or not. It would force 'Upgrades'. Need to access that spreadsheet, pay up! Need to retrieve that old invoice, pay up! No way in hell would I pay for a subscription service for critical software, unless I at least had the ability to use (at least a certain version) it offline, and forever.
Imagine that you did some work in excel 5 years ago, and really no longer need to use it. Assume this was done under a subscription software/os model. Now, five years later: you have to subscribe just to manipulate that file. let's say you only need to use it for 30 minutes - sorry minimum subscription term is 1 month @ 9.95. Bahh.
Look at Netflix, although there is pending competition from Amazon, as well as Blockbuster and Wal-Mart. Their subscription model was a cash cow (or at least very profitable). If people were paying 40 bucks a month, but did not rrent movies that month - what return do you think that is. With software, it would be more proprietary (i.e. Office Documents), making competition harder.