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BusinessWeek Advocates Microsoft Piracy

Posted by ryuzaki0 on from the not-like-they-have-anything-to-lose dept.

xzvf writes "In a lengthy editorial, BusinessWeek advocates allowing users in China and India to pirate Microsoft software so that it can obtain the same level of market share there as it has in the US and Europe. From the piece: 'If Microsoft succeeds in discouraging piracy of Windows in China and India, it is far more likely to drive the user of the pirated software into the Linux camp than it is to steer them into the land of paid-up Windows users. Microsoft's IP management strategy in China and India should instead focus on securing the victory of Windows on the desktops of all PC users. That may require deliberately lax enforcement efforts against pirated copies of Windows for the short and medium term. Only after the Linux threat lessens might Microsoft have the luxury of tightening up piracy protections, as it is now doing in the West. Microsoft can afford to be patient.'"

31 of 181 comments (clear)

  1. BusinessWeek Can Explain by Anonymous Coward · · Score: 5, Funny

    BusinessWeek Advocates Microsoft Piracy
    No, no, you have it all wrong.

    BusinessWeek was just wondering, like, if any of its readers or anyone they know ... had like ... an "extra" copy of Windows Vista lying around that BusinessWeek could use for a little while.

    It's totally cool if you don't want to but, like, everyone's doing it and you get to use each license like three times before they stop considering it 'genuine' so BusinessWeek doesn't know what you're afraid of. You're not afraid are you? You're not going to wuss out on BusinessWeek like that dweeb BusinessEthics, are you?

    This is so stupid, Windows would rather have me using this than something else or telling everyone not to use Windows at all ... and it's not like BusinessWeek would spend that much money on Windows anyways. They don't call me 'BusinessWeek' because I spend $600 per Windows copy you know. That wouldn't be BusinessWeek, that would be GiveInToExtortionistWeek anyways. You want BusinessWeek to change to that?

    Didn't think so.

    Fine, whatever, BusinessWeek doesn't have to beg, BusinessWeek has magazine friends in high magazine places. BusinessWeek is just going to go talk to MacWorld or maybe even LinuxMagazine (as a last resort). BusinessWeek is going to tell National Lampoon's Magazine about you, you'll be on his next cover. Oh, and don't expect to get any from Playboy either because BusinessWeek is stopping by his slot right now.

    What happened to you, man? You used to be cool.
  2. Missing tag by Raul654 · · Score: 3, Insightful

    Why is this story not tagged itsatrap?

    --


    To make laws that man cannot, and will not obey, serves to bring all law into contempt.
    --E.C. Stanton
  3. interesting angle by yagu · · Score: 4, Interesting

    The headline suggests Business Week could be advocating piracy of Microsoft software. This could suggest some bizarre alignment of the stars such that Business Week is Microsoft-averse, but it's clear the opposite is true.

    Basically Business Week lays the groundwork as a recommendation to Microsoft to extend and maintain their monopoly, hardly an adversarial position.

    I wonder that Microsoft needs this prodding. I suspect they wink and nod as much as they have to to maintain their reach into all markets however they need to do just that. This while screaming publicly about how ripped off they are in countries like China.

    From the article, signs point to the very fact Microsoft alreay knows the strategy:

    Bill Gates has hinted that Microsoft may be open to this way of thinking--and willing to give China's PC users a break.

    Microsoft is eating their cake and having it too (the correct form, btw).

    1. Re:interesting angle by TClevenger · · Score: 4, Informative

      It's a common strategy. It's how Pagemaker/Indesign, Photoshop, AutoCAD, Office and Windows got to where they are. They used either no protection or very weak protection (product code 1112-11111111 anyone?), and turned a blind eye to people sharing the software, and once people get hooked on the products, they EOL the old versions and put heavy activation processes (and very high prices--almost $500 for a fucking office suite??) on the current versions.

  4. old news by pedramnavid · · Score: 3, Insightful

    Isn't this their strategy anyway? That and with working officials to make sure that all government PCs are running Microsoft too.

    1. Re:old news by truthsearch · · Score: 4, Insightful

      This is the text book behavior of a monopoly. Gain ~100% market share by giving away, or selling product at a low price.

      Once the buyer is hooked, hike the price.

      That's also the text book behavior of a drug dealer.

      --
      Developers: We can use your help.
  5. - 10 Points to Business Week by Tempest451 · · Score: 4, Insightful

    So is the moral of the story is "Let them pirate your merchandise or they might use the competitions"?

    1. Re:- 10 Points to Business Week by gstoddart · · Score: 4, Informative

      So is the moral of the story is "Let them pirate your merchandise or they might use the competitions"?

      More like, get them using your product, get them hooked, and then milk them for the next 50 years.

      Like selling crack.

      Back in the late 80's/early 90's, a tremendous amount of not-paid-for copies of DOS were floating about. MS didn't really bitch too much because it was getting everyone hooked on their product and making itself the defacto standard for an operating system (because, at the time, everyone wanted an IBM-compatible computer -- and, that meant DOS.)

      Then, once everyone depended on it heavily, they started trying to lock it down.

      In this case, the author is arguing that in huge emerging markets, you're better off letting everyone start using it rather than risk them running something else. Imagine if the home-grown Chinese Linux distro became dominant instead of Windows -- that's a hell of a lot of people who won't be your customers in the future.

      Cheers
      --
      Lost at C:>. Found at C.
    2. Re:- 10 Points to Business Week by mike2R · · Score: 4, Insightful

      So is the moral of the story is "Let them pirate your merchandise or they might use the competitions"?

      That pretty much sums up TFA; and it's a tried and tested strategy that has worked well for Microsoft and others for a very long time - if you want to give -10 points to Business Week it should be as Redundant.

      Whether it will actually work in an environment where Microsoft seems currently unable to come up with an OS which is worth a paid upgrade over XP is the real question. Rent seeking behaviour only works when no one is offering free accommodation with acceptable functionality. It's up to Microsoft to beat Linux now - it will be interesting to see if they do, and ultimately it will be users who reap the benefit of competition.

      [sits back, reaches for popcorn]

      --
      This sig all sigs devours
    3. Re:- 10 Points to Business Week by Spy+Hunter · · Score: 3, Insightful

      So is the moral of the story is "Let them pirate your merchandise or they might use the competitions"?
      In fact, yes, if you are a monopoly.

      Let me tell you about the economic principle of "price discrimination". You make the most profit when you charge each person who buys your product pays the maximum price they would have been willing to pay for it. If someone isn't willing to pay for your product, then you don't lose any revenue by giving it to them for free. And if it costs you nothing to give it to them, *plus* it strengthens your monopoly position, thereby increasing your ability to extract cash from the people who *are* paying you, then it starts to look like a good idea. Also factor in the fact that people who pirate Windows will likely have to become paying locked-in Windows customers in the future when enforcement is stepped up in their countries; well then it's practically a no-brainer.
      --
      main(c,r){for(r=32;r;) printf(++c>31?c=!r--,"\n":c<r?" ":~c&r?" `":" #");}
  6. This will backfire on MS by WindBourne · · Score: 4, Interesting

    MS has been going after the large suppliers in China. They have. If they do not, then China and India get it for free, and then the western world will wonder why they are paying an arm/leg for crap software.

    --
    I prefer the "u" in honour as it seems to be missing these days.
    1. Re:This will backfire on MS by ushering05401 · · Score: 4, Interesting

      "MS has been going after the large suppliers in China. They have. If they do not, then China and India get it for free, and then the western world will wonder why they are paying an arm/leg for crap software."

      Hmmm... In the U.S. we are used to paying more than anyone else for pharmaceuticals. In the EU there are tariffs on all sorts of things that jack up the prices (camcorders & cameras were covered on this site a couple of days ago).

      You may be correct that MS is going after large suppliers, but your final statement might need a bit more thought.

      Regards.

    2. Re:This will backfire on MS by Em+Adespoton · · Score: 4, Insightful

      "Rights abandonment" only works for trade marks. Copyright is automatic when a work is created (in countries subscribing to the Berne Convention anyway), and Patents are governed by time-limited issuance. Microsoft can abandon all it wants, but it still has the law behind it whenever it decides to sue someone over copyright/patent/EULA infringements. The only thing that could be argued is that if MS was seen to be obviously targeting ONLY specific people/groups with its suits, it could be in violation of business monopoly restrictions.

    3. Re:This will backfire on MS by Em+Adespoton · · Score: 4, Insightful
      Short answer: No :)

      China and India have different IP laws, and different law courts than the US, and anyone operating in the US is held to US law. The law clearly states what end users can do with MS's IP (almost nothing), and MS grants further rights to end users IN THE US through its EULA.

      If you read their EULAs for different countries, you will notice that they are different, due to differing laws and legal systems. This is called living on planet Earth, and does not give you the ability to use MS software for free because the rights MS grants you to use their property are too confusing. If you can't understand your rights to use their software, then legally you have NO rights to use their software, other than what is spelled out in Fair Use doctrine (which doesn't cover as much as people think it does). As I said before, the only weakness in MS's tactics is that they could be sued for anticompetitive actions. To do this however, you'd first have to prove that they were indeed promoting piracy of their products or at least being very specific in who they targeted with their lawsuits.

  7. Microsoft has already said this by puck13 · · Score: 5, Informative

    This isn't news. MS has already (unofficially) said they'd rather India and China used their software illegally than use the competition.

    http://www.informationweek.com/story/showArticle.j html?articleID=198000211

  8. The way it was done here... by DrRobert · · Score: 3, Funny

    All my life I have heard... "Yeah... but Windows is free."

  9. Fallacy by suv4x4 · · Score: 4, Insightful

    BusinessWeek has built good thesis on a bad assumption. Windows piracy is already rampant in China and India. It's harvesting time for Microsoft.

  10. Godfather by Himring · · Score: 3, Insightful

    For some reason that line from Godfather I popped in my head where Michael told Kate:

    "The Corleone family will be totally legitimate in five years Kate."

    --
    "All great things are simple & expressed in a single word: freedom, justice, honor, duty, mercy, hope." --Churchill
  11. price solution by Bombula · · Score: 3, Insightful
    Seems like it should be possible to eliminate most if not all piracy by reducing the price of legitimate versions of Windows to an affordable level. Like has already been done to combat pirated DVDs and CDs.

    I have mixed feelings about the logic of differential pricing. Companies are free to charge whatever price they please, but the trouble is that in a global economy where anyone can buy anything from anyone anywhere else, how do we know what is 'fair'? What makes it 'fair' to charge Americans and Canadians more than Chinese and Indians for goods and services? Who decides what is a fair price? Apparently it is 'the market', but if that's the case then why can't I buy Region 6 DVDs from Circuit City for $1? Why is there a stink made by companies and economists who say that free trade is the greatest thing since sliced bread, but then complain when they see products sold on eBay for prices that are genuinely fair given the elimination of transaction barriers in the global economy.

    --
    A-Bomb
  12. Tighten up by pembo13 · · Score: 3, Interesting

    What I would like to see MS do is come up with fullproof piracy protection.

    --
    "Thanks for all the money you paid to us. We've used it to buy off ISO among other things" -Microsoft
    1. Re:Tighten up by Anonymous Coward · · Score: 3, Insightful

      What *I* would like to see MS do is come up with fool-proof piracy protection while the FSF et al launch a multi-billion dollar ad campaign for Linux and Open Source the day MS implements it, resulting in a 60% switch in a single weekend.

      But it ain't gonna happen.

    2. Re:Tighten up by An+Anonymous+Hero · · Score: 3, Funny

      fullproof piracy protection
      Alas, they keep inventing better fu...

      Ah, never mind.

  13. Unfair to business by edwardpickman · · Score: 3, Insightful

    It's bad enough we have to compete with low wages in other countries but we also have to compete with the fact countries like China and the India largely don't pay for software. I have tens of thousands a year in hardware and software purchases just trying to survive. It's impossible to compete against foreign companies. Already my primary client wants to shop part of the work I've been dealing with to a foreign source because they can save money. The situation will get radically worse before there's any hope of improving. It's competely rediculous that I have to pay many thousands a year just in upgrades while most of Asia pays $5 for most any software you can name on pirate disks. I'm not complaining about software prices I just don't see why they should be allowed to get essentially get for free what I pay a bundle for. My money is going to support their free software since I have to help pay for development costs where as they freeload.

  14. pffft by circletimessquare · · Score: 4, Interesting

    the question is not whether or not microsoft should or should not fight piracy in india and china, the question is whether or not microsoft (and business week) understands that microsoft can't do ANYTHING substantial about piracy in india and china

    it's not like microsoft has a gun in it's hand and the question is when microsoft should shoot. microsoft simply has nothing in it's hand at all

    and it's just desserts: in the 1800s, american publishers openly flaunted european copyrights. now it's the usa's turn to be on the receiving end of a growing power ignoring the "rights" of an established power base

    but don't worry about it microsoft, in 200 years, chinaslashdot.org will carry a story about when china should release the nanobots to punish bangladeshi genome pirates stealing chinese biotech copyrights... and bangladeshi and enlightened chinese observers pointing out that the nanobots would have no effect on stopping the illegal conception of pirated organisms

    --
    intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
  15. Begs the question, why? by twitter · · Score: 3, Interesting

    Basically Business Week lays the groundwork as a recommendation to Microsoft to extend and maintain their monopoly..

    When we consider what an abusive monopoly that has been, we have to wonder why Business Week would advocate it. What is a news magazine doing advocating any single business, much less one that has destroyed so many others?

    It's doubtful people actually making decisions read Businessweek so it's purpose is not to inform. Most people who really know what's going on in the predatory companies that fill BusinesWeek's glossy pages do not talk to reporters. They have PR drones spin some kind of story. The target audience is gullible young MBA types and others thinking about how to build a retirement fund. For the MBA types it's like porn, where their hero's are portrayed in everything but a centerfold. Those who's earnings are invested in big dumb savings plans can take false solice as big dumb companies like M$ are claimed to be solid, eternal and not in anyway like that other Worldcom or Enron stuff that cost them so much.

    Real news and enlightenment come from considering simple facts. M$ can put off their "anti-piracy" efforts, but it might as well be forever. M$ is no more going to be able to exploit the world with a software monopoly than they are ever going to understand why. There is no way M$ will be able to purchase the kind of complicity it would take to re-create their monopoly world wide. The US, for all it's talk about business freedom, was far easier to purchase than India and China will be. Those governments have their own self interest to consider and arguments about the well being of a US company won't apply there.

    --

    Friends don't help friends install M$ junk.

  16. I'm running a pirated OS by HangingChad · · Score: 3, Funny

    Ha-ha! I found some unprotected disk images on the web and installed it on every one of my machines at home. It didn't cost me a dime. Hacked my way around the registration and got it running.

    Those looo-hsers at the Kubuntu corporation don't even know I have it!

    I'm l33t! I r3w1!

    --
    That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
  17. Can there really be a moral by WebCowboy · · Score: 4, Insightful

    ...to this article, being that it seems virtually devoid of morality?

    Mr. Chesbrough isn't even subtle about it either--he openly advocates "selective enforcement" of the law to maintain dominance and smother the competition. He goes on further to explain how as a market goes from creation and growth phases into maturity (ie. they have their users trapped) that MS should then suddenly ramp up enforcement and start collecting payback. This is how drug dealers and the mafia operate, not how legitimate businesses are supposed to operate!

    Either this clown is as ethically challenged as an Enron accountant or else he is a masterful troll. I can only hope it is the latter and he is trying to bring "A Modest Proposal" into the information age. I'd be careful if I were him though, because over the years, MS has gradually been moving towards the "Mafia business model" and is very nearly there: They already have the opinion that "if the Chinese are pirating it should at least be our stuff", have "favourite customers" that pay only a small fraction of the US retail price...and they are already making patent "protection money" deals with skittish Linux companies. They need no more encouragement from the likes of Business Week and its editors.

  18. Whew, my hopes are confirmed by WebCowboy · · Score: 5, Informative

    ..it pays to R past the end of TFA sometimes:

    Henry Chesbrough is Executive Director of the Center for Open Innovation at the Haas School of Business at UC Berkeley. He is the author of Open Business Models: How to Thrive in the New Innovation Landscape (Harvard Business School Press, 2006). He is an authority on open innovation, open business models, and more open approaches to intellectual property management.

    'twas a masterful troll Mr. Chesbrough. Jonathan Swift would be proud.

  19. Chinese Govt & Big Business by just_another_sean · · Score: 3, Insightful

    For the Chinese government and their larger businesses I think their major concerns are not price. They are being "driven to the Linux camp" because they can review the source code and make sure MS isn't facilitating spying on behalf of the US government. This is why efforts like Red Flag Linux were initiated, IMO.

    <tinfoil>
    Likewise, having access to source and their own distro allows them to add hooks and backdoors to spy on their own citizens.
    </tinfoil>

    I realize that the above doesn't apply to the average user in China but considering the majority of the market over there right now is government and business I'm sure MS is more concerned with them switching to Linux then the average Chinese citizen...

    --
    Creationist Textbook Stickers Declared Unconstitutional by CowboyNeal
  20. actually by pedramnavid · · Score: 3, Informative

    Actually, they do

  21. Is BusinessWeek a Microsoft product? by alegrepublic · · Score: 4, Interesting

    I wonder what does BusinessWeek gain by being pro-Microsoft. Are they owned by the software giant? Is their growth somehow tied to that of proprietary software? Do they think their licenses will be terminated if they show disrespect for MS? The real question BusinessWeek should address is not how to make Microsoft more implanted in the developing nations but why they think that situation would be a good thing.