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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.
He's really grasping at straws, isn't he? Anecdotal evidence suggests the exact opposite. When the price of hardware goes down, the market generally demands that software costs go down as well. That's why there's so much griping about Windows being large chunk of computer costs these days. I've even heard people use that as justification for pirating software! ("My computer only cost $500, so why should I pay Microsoft $250 for Windows?")
In addition, many people seem to be particularly upset that they're forced to pay Microsoft enormous sums again, and again, even if they don't want to. In other words, people feel like they've already payed Microsoft their dues, so why should they pay it all over again? This has the effect of delaying upgrades until new computers are purchased, with businesses being the primary exception.
Because of Microsoft's stranglehold on the market, they are able to rope companies into upgrade contracts that extort payment for new versions. Under these contracts, failure to upgrade results in higher costs for later upgrades. So much higher that it makes more sense to upgrade now rather than later. Could any other company pull these sorts of strong-arm tactics? Of course not! In any other business, you'd find a competitor and switch to them (or at least use it as a negotiation tactic).
Let's hope that the rise of Mac OS X, Linux, Novell, and Sun as desktop competitors will finally provide a viable choice for both home and business.
Javascript + Nintendo DSi = DSiCade
In other news, it was announced that speeding was primarily due to long roads. Starting next year, all roads will be shortened by 10% and this should achieve a 10% slowdown in highway speeds.
Agile Artisans
So I buy a $100 PC, but then need $700 for an OS and desktop suite (WP, spreadsheet, et. al)? Steve, put down the pipe, you've been hanging out with Darl too long.
Or is this a sinister MS plot to get people hooked on cheap PCs, then use a subscription $9.95 a month model to 'rent' the software?
I want to delete my account but Slashdot doesn't allow it.
PCs are cheap here. You can get an entry level PC for less than $500. Still there's piracy.
Look at the Palm or mobile phones. Cheap cheap cheap. Still there's piracy.... and a lot of those programs only cost $5.
The cost of hardware and software have nothing to do with it. If there's a way to get a "free copy", some people will always go that route.
MS's problems aren't because they don't understand security, or customer satisfaction, or that monopolies are held to a different standard..
It's because the people in charge live in a different universe!
You have something with almost zero marginal cost, and mark-up measured in thousands of percent, and he thinks the problem is because the *hardware* (which has a large marginal cost, and has mark-up measured in the single-digit percentages) is too expensive?
Sweet Jebus, software is pirated in third world nations because the software is too expensive.
I wonder what color the sky is in his world?
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...
Why is that surprising? They let Bush do it all the time, and he's the head of the biggest corporation in the world. ;-)
The House Between - Original Sci-Fi Series
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
Umm, Steve, it's partly your fault people need faster hardware? Each new release of MS {Windows,Office,Whatever} needs bigger and bigger specs. If Windows Longhorn ran faster than Win XP on the exact same hardware, the base price for new machines would drop due to natural market pressures. Instead each new release inflates the system minimum requirements which naturally inflates the cost of a baseline system.
Disclaimer: pretty much all of the computing industry, including open source software, are constantly requiring more and more powerful CPUs.
This, of course, is nonsense.
They are asking "How can we stop piracy?" when what they NEED to be asking is "How can we increase sales?" These aren't equivilent questions in the least, but they seem to believe they are. We all read that story about piracy in Russia. If a single $15 CD costs approximately 1/4 of an average citizen's weekly pay there, there is simply no way in hell they're going to be paying $200 for MS Office. EVER. Doesn't matter how frigging cheap you make the computers, even if you give them away in very large cereal boxes, the people are NOT going to spend half their month's paycheck on a piece of software.
This will not hold true in ANY scenario. Ballmer & Friends appear to believe that if they eliminate piracy, copies of Office will fly off the shelves. Even if they did manage to make a copy of Office which was 100% unpiratable (for the sake of argument), that wouldn't spur sales any. The people would just start pirating some other piece of software, or use OOo.
The *only* rational solution to the problem is to drop software prices. The ONLY one. No other solution has the potential to actually increase software sales. (which certainly should be their goal, unless they've given up on actual profit in their eternal search for scapegoats) Yet that's the one measure Ballmer says they will NOT implement.
Interesting, huh?
My theory, incidentally, is that Microsoft is terrified of these hypothetical localized copies of their software leaking into the mainstream and selling at a discount. That's why their cheap XP-lite is so crippled. It doesn't HAVE to be, but they're so protective of their market share that they're unwilling to risk it in any way, even at the potential benefit of even more markets.
Either that or, as I said, they've become so focused on pirates that they've forgotten to actually do business in the meantime.
Bush: He's Liberal in all the wrong ways.
Software, on the other hand is information, which desperately wants to be free. And, contrary to the predictions of Schatz and Ballmer, software already is free.
Until they make hardware freely duplicatable, it will cost money. It's more expensive to make 100 sticks of RAM than one. But it's no more expensive to make 100 million copies of Firefox than it is to make one. In fact, it's no more expensive to make 100 million copies of Windows -- legal or not -- than to make one. That's Netcraft confirms that Microsoft is dying: with information gaining increasing freedom, a company that sells information will be hard pressed to survive. A company like IBM, on the other hand, which sells silicon but gives away information, can expect a long and prosperous future.
Another one bites the dust
No, they don't let him. I'm sure every time Shrubby makes up a word or claims that God speaks through him Dick Cheny beats him with a rolled up newspaper.
Still, he can't change what he is . . . . . .
Only in a Slashdot fantasy can a Slackware install turn into several hours of sex . . . . .
Software is going to become a commodity not hardware. Hardware already is pretty cheap even while hardware development costs and productions costs often exceed the costs of a disciplined software development project. Microsoft has two cash cows and almost everything else they make is a flop at least in part because they are not disciplined spenders. Office and Windows are gradually waning as all cash cows eventually do and that waning is increasing. The software market is undergoing a slow but very major correction in the form of FOSS. Because competition was blocked by a monopoly and because the equipment and knowledge needed to develop a competing product were relatively widespread would-be competitors reacted by building their product in such a way that Microsoft's bankroll it uses to compete (or anti-compete) becomes mostly irrelevent. You can't buy out FOSS, you can't sue it out of existence, you can't target any specific company or person in order to get rid of it. FOSS is a response to the heavy handed tactics of Microsoft and to a lesser extent it is also related to a number of other near-monopolies that developed in the software industry.
Windows and particularly Office cost way too much. One would never think that in this age of 3d-games and super computers in the home and screensavers that cure cancer that an unimpressive package that does word processing, spreadsheets, boring presentations, and a seldom used database would be sold for $400. They simply fought all their compeitors to death or scared them enough to stay out of that market.
Software is what is going to get cheaper. FOSS software makes it possible to get the most use out of each line of code by allowing it to be used over and over by different users who have different needs.
The ever shrinking cost of a low-end PC have already commoditized hardware to about as low as it can reasonably go given that hardware manufacturers are not going to waste their time building old parts to sell for pennies when they can build new technologies to sell at a higher price. Then mass market them at the midlevel and then drop down the price to move out the remaining inventory when they announce something new at the high end.
Some components can get cheaper especially when sold at retail chains like CompUSA and BestBuy where a hard drive still costs $80 no matter how small. Its their minimum hard drive price. You will often see a drive going for 80 or 85 and it will be double the size of the one going for 79.99.
Software is pirated because it CAN be pirated. You're gonna have a hard time pirating silicon. This is the prime difference between SOFTware and HARDware. Trust this, if Linux weren't open source, people would pirate it. People pirate software they will never use to it's full extent either. I wonder how many people have pirated copies of Autocad that they really don't know how to use at all. How many pirated copies of photoshop are used just for resizeing and converting image types? Why do people steal things? That's a real question. They steal what they think they "deserve". It's a real bullshit mentality. At least in the case of stealing Windows XP, people really do get what they deserve. Sorry I'm going on so long here, but new ideas keep popping up. Yes, I'm suffering from post before you think right now. Maybe it boils down to laziness. People will steal Windows XP before they learn to run Linux. People will steal Photoshop before they find out what other options that exist for less money or for free, as in The Gimp. So, who are the real assholes? Sure, Ballmer makes some pretty outrageous statements and basically exists to ruin the good names of the software developers and geniuses that work for him. But, the real assholes are the unwashed masses that allow companies like Microsoft to make products that actually push up the cost of hardware by being bloated and full of useless "features". Let's face it, without customers, a company means nothing. This is not to let MS off the hook entirely though, they do everything in their power (too much power) to keep customers "loyal". As stated in Full Metal Jacket, "It's a huge shit sandwich, and we're all going to have to take a bite." But that's not entirely true either. Believe it or not, Microsoft actually "helps" open source users by forcing an increase in the power of hardware systems. My Linux box really flies on some pretty cheap hardware. It's just a P3 1GHz/512MB RAM/GeForce 5200 and it runs great. Most people wouldn't even purchase a system with those specs if they saw it in a store. I'll tell you what, I bet it runs better than most P4 systems sold with windows in most cases the average user comes across. It's not that I can't afford a fast computer, I'm writing this on a G4 Aluminum PowerBook, a computer I was proud to pay a ton of money for. Anyway, Ballmer, you may be right, statistically, but philisophically, you're dead wrong man. Matt
This should be a wakeup call for hardware vendors to DROP M$ LIKE A ROTTEN POTATO .
They've just come out and said, you guys don't provide value to the equation, we do. We want the biggest part of the pie.
The Dells and Gateways of the world can still make their piddling single digit margins selling their hardware the penguin people just as well as 'doze users. (Hell, if they don't have to pay the M$ extortion, that's more money for them).
Microsoft, on the other hand, has nothing else to offer. They must convince consumers that they provide some sort of value for their money.
The only way M$ can make a rational argument for this is in a package lease kind of deal, where the customer coughs up $25 / month. Out of that, the pie has to get split up among : 1) the hardware provider, 2) the ISP, 3) the software providers.
20 years ago:
Hardware:
5MHz CPU
512KB RAM
20MB HDD
14" monochrome CRT
Total price: $3000
Software:
MS-DOS: $60
Operating system = 2% of total cost
Today:
Hardware:
2.4GHz Celeron
256MB RAM
40GB HDD
15" SVGA LCD monitor
Total cost: $500
Software:
Windows XP Home OEM: $100
Operating system = 20% of system cost
The price of the OS has increased by an order of magnitude relative to hardware costs... and the cause of piracy is expensive hardware? Pull your head out, Ballmer.
Now, let's see: I want to get MY work done.
My clients are in video, audio, web, and print. I need:
Adobe Photoshop
Adobe InDesign
Adobe Illustrator
Macromedia FreeHand (because I like to work in it better than Illustrator)
Macromedia Dreamweaver
Quark Xpress (for cranky or fussy printers who are still runnning Quark 4 on OS9 or 2000)
Macromedia Fireworks
Macromedia Flash
Ableton Live (for music development)
Adobe Audition (for Windows based destructive editing)
Propellorheads Reason (for composition)
AVID DV Express, Pro edition (for video)
Adobe After Effects
Adobe Premiere (because it comes with the Video Bundle)
And, of course, MS Office
TOTAL COST OF SOFTWARE?
Assuming I buy most of it in Bundles (Adobe Creative Suite, MM MX suite, etc.) I come out to a rough number of:
$7700
At that point, a $1000 computer is one of THE LEAST of my expenses. When you bring in a DV camera, a decent audio ADC, Firewire RAIDs, scanners, printers, and similar crucial items, a $1000 computer becomes even less of a cost to the total operation. A $500 computer becomes insignificant - heck - it's almost impossible to find a decent multichannel audio ADC for less than $600.
Ballmer is COMPLETELY wrong, or, more likely: HE'S LYING. SOFTWARE is the expensive item, followed by peripherals. The last item is the computer. The expensive part of the computer is not in its cost, but in configuring it to one's needs, which takes time (which is extremely expensive) software (which isn't cheap) and peripherals (which can be cheap or extremely expensive).
RS
Shoes for Industry. Shoes for the Dead.