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Learn Chinese if you want cheaper Microsoft software

The Chinese have been negotiating with Microsoft to lower the price of their software in an effort to reduce piracy. Microsoft has adopted an approach in China where pirated software or at least versions which are not authenticated, will either go 'black screen' or issue continuous warnings to the user.

Chinese bloggers are reflecting the outrage of computer users in a country where the vast majority of workers earn less than $97 per month and the western price of Microsoft software is obviously beyond the reach of the vast majority of Chinese people. As a comparison, the average US worker earns over $5000 per month.

Given that great swathes of US computer users are happy to use pirated copies of the software, one can only imagine the scale of copyright infringement in China.

As a sustainable business model, Microsoft would appear to be bereft of any future given the current state of the economy and the economic outlook. Surely computer users in economically challenged countries are going to find it illogical and untenable to pay more for their Microsoft software than the current price of a laptop. It just doesn't make any sense. Would any sensible person consider buying a car for a $50,000 and paying $80,000 a year for petrol.

This is not an attack on Microsoft. It's a free world and they can charge whatever they like for their software and they have every right to prosecute copyright infringement and privacy.

What it is, is a reality check.

Surely the currently high prices for Microsoft software cannot be sustained as the cost of computing devices comes down.

Equally Microsoft cannot hold the fantasy that this business model will survive the mobile internet world.

Imagine paying $199 for your phone then getting slugged another $250 for the software to make it actually useful. Absurd.

You see my point.

The other issue is that if Microsoft lowers prices in China - will they be pressured to lower them elsewhere? The anti- monopoly laws have been deployed against them in Europe, what other weapons do governments have at their disposal to enforce lower software prices?

Perhaps a tax on computer operating systems and basic business software with rebates to citizens? Possibly just make it 100% of the sale price and give citizens a tax break or rebate.

Unlike China, where everyone speaks Chinese, in the west we don't generally have the option of using the Chinese version of Windows so we may not be able to take advantage of the lower pricing in China.

Way to go Microsoft - give China an economic advantage over the US and the rest of us and really hammer the nails in the economic coffin.

Microsoft shareholders should at least consider how good an investment is in a company which has done very well in the past, but may not do so well in the future. Bear in mind that the majority of humans alive today do not own a PC nor are they ever likely to - they'll go straight to the mobile and other hard-wired browsers, if the plans of HP, IBM and the googles of the world are right. It isn't exactly rocket science to figure that out.

One thing is for sure - Microsoft products are popular, although whether it's because people actually like them or they feel forced to use their products to communicate with anyone else in business remains to be seen, but there are a growing number of consumers who may never buy their products again in their lifetime - they won't need to.

If I were at Microsoft I'd be worried about issues like these, especially given the less than 'Microsoft performance' of Windows mobile in the marketplace. I used the term in inverted comma's because to be fair, 'stellar' would fail to describe their performance in the early days.

Those days are definitely over.



Loose translation of micro soft into Chinese

Comments: (3)

A Finextra member
A Finextra member 02 November, 2008, 11:05Be the first to give this comment the thumbs up 0 likes

p.s. I know that after Vista bombed like lead balloon, Windoze 7 is the current hype. I asked myself who would get hyped up about it when we don't even know what it'll cost?

Too much is the answer.

I've seen 'pricestimates' from $50 to $150 and that's just for the basic O/S, not the other things like spreadsheets etc which you'll have to access via the web. Perhaps they'll be sponsored by advertisers keen to insert their message into your spreadsheet.

Underwhelmed would be my response.

I still can't see the third world paying that sort of price, no matter how many copies of Windows (out of the goodness of your heart) you 'give' to third world schools for $3, the population just don't have the income to support a $50 operating system, let alone a $150 one. The boom days in the developed world are over too, if you hadn't noticed.

The masses who stayed with XP may just have done so because the days of paying crazy money for crappy beta software went out with the idea that the net was new and groovy.

Zennon Kapron
Zennon Kapron - Kapronasia - Shanghai 04 November, 2008, 05:21Be the first to give this comment the thumbs up 0 likes

Good points. Microsoft in China, for the most part, has not been selling software, but rather enforcing licensing on existing installations and mainly in corporates. A few years ago there was an interesting interchange when Gates was in Beijing. There was a joint dialogue and Gates was stressing the importance of IP and licensing. The government said 'yes, we understand we need to pay for software and we will start.' then promptly added 'we just started working on our own flavour of linux...' The 2nd part hasn't happened yet, but it may.

How to address the consumer market is a different challenge. They definitely need to do something different ala the one notebook per child programs. Like Dean said, you want the laptop for $100, not $100+400 for software.

Dave Kershaw
Dave Kershaw - Ulster Bank - Belfast 04 November, 2008, 09:34Be the first to give this comment the thumbs up 0 likes

The alternative to Windows XP/Vista/7 is Linux - which is free.

An increasing number of cheap laptops (such as the eee netbook) are already bundled with Linux. Microsoft face a bigger problem than a reduction in the price of their OS if there is a viable free alternative (and as a recent convert to Linux I would say that there is).

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