Microsoft Battles Software Pirates On Price

from the deep-discounter dept

Thu, Apr 19th 2007 9:30am — Joseph Weisenthal

Microsoft has always seemed to be of two minds when it comes to its business in China. At times, the company has admitted that it actually benefits from piracy, since it helps it fend off rivals and grow its installed base, while at other times, it's urged a hardline stance against the practice. Whichever way the company feels at this point, it looks like it's at least recognizing that under the current economic climate, it's not realistic to sell much full price software in China. Speaking in Beijing, Bill Gates announced that the company would begin selling a range of software in the country for just $3. At these prices, Microsoft isn't going to make much money, but it's better than having people buy pirated versions, because this will allow the company to establish some sort of connection to its users. Then, in the future, it may be able to sell its customers on more expensive software or services. Meanwhile, a report out of China indicates that Microsoft has only sold 244 legitimate copies of Vista so far across the country. This seems a little hard to believe, but it's possible that it's been a total flop. This new discount pricing initiative probably isn't directly related to the poor sales, though it is an acknowledgment that the current business model isn't working.

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24 Comments

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Michael Rowe, 19 Apr 2007 @ 10:00am

Warez includes WinXP not Vista
The problem, as I see it, is that the OS Microsoft is giving away Windows XP, and not Vista. I can't see how giving away day-old-bread is going to help the piracy issue.

On another note, It's in interesting concept for Office 2007. Ever since I upgraded, I've wanted to go back. If I wanted a macintosh UI, I would have bought a mac.
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- Charles Griswold, 19 Apr 2007 @ 11:12am
  
  Re: Warez includes WinXP not Vista
  The problem, as I see it, is that the OS Microsoft is giving away Windows XP, and not Vista. I can't see how giving away day-old-bread is going to help the piracy issue.
  
  There's a good chance that it would help more than giving away Vista. For one thing, XP runs on what are now commodity PCs, whereas Vista doesn't (or at least, not as well as XP does). For another thing, even if they were giving away both XP and Vista, I would still rather have XP than Vista. Maybe after they've had a year or so to iron all the bugs out of Vista, I'll consider it. Maybe.
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Xenohacker@hotmail.com, 19 Apr 2007 @ 10:14am

244 Copies?
I believe it is true that allowing piracy increases the install base and is very possibly a reason their company still exists. I for example do no know a single person that owns genuine Microsoft Windows that did not come with the computer. The hardline stance will simply discourage a larger install base and help their competitors in the long run. I think old Billy has misplaced his loyalty to the America that has made him a fat billionaire. So I will buy Vista when the price is $3 in America or pre-installed on a new computer a few years from now. I might simply wait until the script kiddies come up with something to pirate Vista. Does Microsoft forget the only reason anyone buys anything from Microsoft is because they already have Windows installed? They could monopolize the entire industry entirely if Windows Vista were given out like AOL CD's. It would set the stage from both a techie and business level because at least the OS the platform in which all software runs would be free. However, I think that Microsoft would never do this and so it pleases me when I see their competition grow. Besides are they forgetting the real benefit, which is the ability to sell products to loyal customers standing in line to get their new software!!!

244 Copies!!! HaHa I love it!!!
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- Geek, 19 Apr 2007 @ 10:55am
  
  Re: 244 Copies?
  They could monopolize the entire industry entirely if Windows Vista were given out like AOL CD's
  There is an OS that could be (and is) given out like AOL - it's called Ubuntu, it's Linux, it's free and it can be run from a CD, if that floats your boat. And, if you just can't break the M$ habit, install Wine or another Windows virtual machine and run many Windows apps on it.
  New Linux OS: $0
  Free virtual machine for Windows apps :$0
  Breaking Bill Gates stranglehold on your life:Priceless
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  - Anonymous Coward, 19 Apr 2007 @ 2:03pm
    
    Re: Re: 244 Copies?
    If it is truely given out like AOL CDs where is my copy? :-) Last I checked I had at least 4 AOL coasters but I've never seen a cd for Ubuntu.
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Anonymous Coward, 19 Apr 2007 @ 10:33am

How I so wish that said:

Microsoft Battles Software Pirates On Ice
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- Devil's Advocate, 19 Apr 2007 @ 10:36am
  
  Re:
  Now *THAT* I'd pay 3$ to see!
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- Anonymous Coward, 19 Apr 2007 @ 10:51am
  
  Re:
  Funny, because that's exactly what a passing glance at the headline said to me!
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- Techie Chick, 19 Apr 2007 @ 10:59am
  
  Re: Pirates on Ice?
  Bytes of Glory?
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RedDevil, 19 Apr 2007 @ 11:04am

I suspect the real reason is to thwart Linux. From what I have read a lot of Chinese users don't care what the operating system is, as long as it is free or nearly free. XP was pretty easy to crack, so it was close to free. If MS has actually managed to lock down Vista, then they have created a problem for themselves because their product is no longer inexpensive in high-piracy countries. That means that the users may turn somewhere else, and that somewhere else might be Linux.

Having a country like China using anything but Microsoft could start a ripple effect. More Linux users means fewer users of IE, creating another crack in MS dominant market share. Businesses doing business in these countries could no longer get away with creating "IE Only" web sites.

Microsoft has no choice but to make sure it software remains dirt cheap in countries that have minimal concern about IP rights. It is the only way it can maintain its market domination in markets where it is able to charge monopoly prices for its product.
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Alias, 19 Apr 2007 @ 11:28am

Re: Re: Warez includes WinXP not Vista
You can already buy XP in China for fifty cents. Three dollars--hahahahahah!!!!
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- dzequ, 15 Aug 2007 @ 5:10am
  
  Re: Re: Re: Warez includes WinXP not Vista
  wow, i dont care its old OS, so long its cheap or nearly cheap, where can i have it?if it posible i would buy 100 copy of this XP
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Anonomouse Cowheard, 19 Apr 2007 @ 11:34am

Vista Pricing...
my $0.02:

I think M$ has lost touch with the value of the dollar. I would gladly purchase the retail version of vista ultimate if the price was, say $150. (I know, I know, I can get the OEM version for a little more, but I want to be able to LEGALLY transfer the license to another system in a year or two since I tend to upgrade about that often). I just don't believe that a OS is worth $400.

So here is my pricing scheme for vista(retail, not OEM or Upgrade):

Basic: $25
Home Premium: $75
Business: $100
Ultimate: $150

The bottom line is, you can set whatever price you want for your product, but if people don't think it's worth the price, they won't buy it. I would assume that a lower price should encourage more "would-be" pirates to purchase a copy.

I'm wondering: where is the "sweetspot" for reasonable pricing? I mean, they've admitted openly that piracy has helped propagate the windows environment throughout the world...why not compromise and set the price somewhere in the average joe ballpark.

So tell me, and Uncle Bill, TD readers: How much is Vista worth to you?
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- Anonymous Coward, 19 Apr 2007 @ 11:58am
  
  Re: Vista Pricing...
  Basic: Free
  Home Premium: 5$ (this shoudlnt even exist)
  Business: 50$/head
  Ultimate: 50$/computer (this shouldnt exist either)
  
  That is realistic pricing.
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- Anonymous Coward, 19 Apr 2007 @ 12:06pm
  
  Re: Vista Pricing...
  I think that $150 is a fair price. I still do not like Vista and have been using it for a little over two months.
  
  Keep this in mind:
  
  China's Population:
  1,313,973,713
  
  US Population:
  0,298,444,215
  
  Gates isn't stupid...its not about piracy, its about gaining a market share in one of hte largest populations on the planet.
  
  Sure, piracy is everywhere, but by offering legal copies to that size of population it would be like selling 1,000 copies in the U.S.
  
  Gates will still make money ($2,627,947,426.00 if just 1/2 of the population bought it at the low price).
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Alilas, 19 Apr 2007 @ 11:47am

Re: Vista Pricing... by Anonomouse Cowheard
How about $150 (as you suggest). I'll even throw in a (slightly used) copy of Windows ME that I was ripped off on several years back.
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Anonymous Coward, 19 Apr 2007 @ 11:51am

Basic: $79
Home Premium: $99
Business: $150
Ultimate: $199
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Healthy Sceptic (profile), 19 Apr 2007 @ 12:08pm

Back to the subject of China.
The reason MS is going to sell software there at that price is because that is what the market will bare. In a country trying to get moving on the world stage now a days means being able to run computers for the least cost to your country's economy. When the software is a must have to run all the other software that you need for your country then you are going to have to get it one way or another. And when that software costs nearly a months worth of income for the average person in your country then that will hold your economy back unless you can get it cheaper. That is why the Chinese gov won't stop the priacy. They just can't afford to, i would bring their economic growth to a stand still.
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Apennismightier, 19 Apr 2007 @ 12:59pm

Screw Vista
Where's the US's $3 copy of Microsoft's OS? I have to shell out $50-$70 for Halo 2 on my PC, and then upgrade to Vista for another $150-$200. F That. No game is worth that. F you Bill Gates. F you in the asterisk. And make a decent console too. XBOX 360 is a bad remake of the original. PS3 isnt much better but at least they have titles.
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Free Ubuntu CD, 19 Apr 2007 @ 2:27pm

Here you have your free Ubuntu CD:

http://www.ubuntu.com/getubuntu
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Vincent, 1 Feb 2008 @ 7:34am

US economy down may due to Microsoft monoploy effe
We always forgot what we are when the microsoft made us crazy with their every one year or two years changing of the new software. we are their rubbish collector and Bill Gates take away every body money handsome manner. So company and ordinary people suffers pocket losses, money, energy and every one or two year have to throw away the old chunk of software to get updated. The US government does not see the long term benefit by let microsoft doing such a way. Now microsoft is very rich to buy any rivals or potential killer of their software. If that company do not want to fight him, another big loss to the IT world.
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