According To Microsoft's Own Numbers, Microsoft Costs The World Economy $500 Billion
from the money-could-go-elsewhere dept
It's always amusing when you see studies done by companies about how much money is "gained" or "lost" from certain activities -- as if the actual money wouldn't or doesn't go to other sources if diverted. So, when Microsoft hired IDC to write a report hyping up how Microsoft and its various partners "generated revenue of $580 billion in 2010," the idea was clearly to suggest that Microsoft was very good for the economy. Yet, that's only one way to view it. Glyn Moody, quite reasonably, points out the other side of the story, which is that if that money weren't spent on Microsoft products, it could have gone to much more productive uses. By his (somewhat tongue-in-cheek) back-of-the-envelope calculation, this study really seems to suggest that Microsoft cost the world economy somewhere in the range of $500 billion:Red Hat's CEO Jim Whitehurst makes an interesting point about the cost of software:Seems only fair. If Microsoft and others are going to claim "ripple effects" for unauthorized copies, it seems reasonable to point out that there are ripple effects to people paying for Microsoft software, rather than spending it on other, potentially more productive, uses.
He said that he did think that Red Hat could get to $5 billion in due course, but that this entailed "replacing $50 billion of revenue" currently enjoyed by other computer companies. What he meant was that to attain that $5 billion of revenue Red Hat would have to displace software that currently costs $50 billion.
That is, open source software typically costs only 10% of the equivalent proprietary products. This isn't about "destroying" wealth, though: customers are left with the other 90% to spend on other things. It is still in the economy, but spent elsewhere.
Applied to IDC's figures for Microsoft, this would imply that the $580 billion revenue might well be replaceable by a tenth of that - let's say $80 billion, to be on the safe side. Which means, of course, that the effective cost of the Microsoft ecosystem to the world in terms of money spent needlessly is around half a trillion dollars.
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Filed Under: economics, ripple effects
Companies: microsoft
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Microsoft's price gauging is costing the world economy 500 billion$
Then you have to reference a report you paid to get created that hides your highly questionable methodology as much as possible and in your article you have to assume the report is sacrosanct. Your article should only talk about what we should do about microsoft costing us this 500 billion and how bad it is that they are costing us that 500 billion.
Then you have to pay some politicians (lots of them, and from all sides, otherwise you will have neisayers) to treat your article as sacrosanct as well so they will pass laws against microsoft in the name of recovering this lost 500 billion.
Thats how stuff gets done!
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Because, like divorce, it's worth it.
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Typo
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Re: Typo
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For me it's not just about software cost but of time ...
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Re: For me it's not just about software cost but of time ...
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Re: Re: For me it's not just about software cost but of time ...
We also need a better office suite, OpenOffice while good is not quite comparable to MS Office.
I decided to trade those two issues for stability and performance a couple of years ago and can not imagine ever switching back to windows.
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Re: Re: For me it's not just about software cost but of time ...
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Re: Re: For me it's not just about software cost but of time ...
Honestly, you might find there are other things to do with your system besides playing computer games if you look around.
I have been going through this rather painful process over the last year. I started with one Linux server at the house. Then when I replaced my laptop, I made it dual boot Linux and Windows. Only when I just have to do something in Windows, I reboot into Windows, do that thing, then go back to Linux.
Over the last couple of months, I find myself in Windows less and less.
What is sad is that I had to give M$ the dollars for the OS even though I barely use the M$ OS. I moved to Open Office, and I am working to move our Web Apps off of the IBM application stack.
Open Software just makes more sense. I contribute to Open Software as well, but I do so because I want access to my work even if I switch jobs.
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Re: For me it's not just about software cost but of time ...
That was one of the reasons I quit using it.
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Re: Re: For me it's not just about software cost but of time ...
Saying that, I also find the daily updates annoying.
I would rather have an "run system update before shut down" option in the shut down menu than be bothered by that window every day.
Switching to Free software has saved me well over $1000 over the past 4 years. That doesn't mean I have $1000 in my wallet, that money was definitely spent elsewhere.
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Re: Re: For me it's not just about software cost but of time ...
Other times I do the updates while I am working, but it is just something running off to the side. Mostly it isn't a problem; only when I am asked to reboot does it really matter.
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Re: For me it's not just about software cost but of time ...
You do realize a Linux system is still usable while updates are downloading, and even while they�re installing?
You only need to reboot if the kernel is updated. Otherwise only the updated services need restarting; the rest of the system can keep running.
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After all, if they don't buy X but instead buy microsoft products, the same amount of money has moved, no? So net, the economy is still the same.
Unless of course you would care to admit the concept of "economic cost" when sales are lost. Which would you prefer?
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Hint:
Inflation, lending, fiat currency, beliefs, trust, jobs are all intertwined.
When sales are lost and not accompanied by loss of jobs, reduction in lending or trust there is no economic loss stupid.
On the other hand when you base you entire economy on lending as a primary drive to create wealth and that system fails that is real economic loss.
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Moody is British. He argues that by paying stupid prices to a foreign company when alternatives exist at 10% the cost, money disappears needlessly from the British economy.
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The economy is a zero sum deal, I learned that from reading Mike putting away piracy as a no loss play.
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This is why I've never used Microsoft products
And given that not even Microsoft can secure Microsoft products, I think people have to be fair to moderately insane to even CONSIDER using them.
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Re: This is why I've never used Microsoft products
Which is also the answer to the problem of malware, you create standards like TXT files and have as much variety in the eco-system as possible, since that makes it very difficult to create one super virus that will infect every type of system out there.
In a sense we need Microsoft, as we need Linux, TRON, OSX, Plan9, FreeBSD, Haiku, Android, MeeGo and others.
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Jobs
If people were to only buy used video games, they'd have more money for other products, if people bought no-name food at the grocery store, they'd have that money saved to spend elsewhere...
You could even say people saved money on other products and used the money they saved to spend on Microsoft products. Initially it looks like a great story but when you think more about it, its nothing.
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it could have gone to much more productive uses
You can also make the same case for any product. Oh... Coca Cola costs the world xxxx billion dollars last year, that could have been money spent on more productive uses....What??? Get the fuck out here with this childish OS and company bashing bullshit! Go take your nerdOS and go off back in the dark corners of the internet and me and my non-productive OS will go back to running the business world you fucking 'tards.
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Re: it could have gone to much more productive uses
I do care how my taxpayer money is spent, however, and I do mind if my cup of coffee (or whatever) costs 10% more because the producers, distributors, credit card companies (etc etc) are using super-overpriced software and are passing the costs down to me.
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Re: it could have gone to much more productive uses
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Re: it could have gone to much more productive uses
I think the point is not that people spent all that money on MS products, but they could have spent one tenth on equivalent open source products, and been just as productive. The Coca Cola example doesn't quite work because there isn't an alternative to Coca Cola which tastes the same but which is one tenth the price (at least not that I know of).
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Re: it could have gone to much more productive uses
Most large scale transaction processing systems at banks run on either some mainframe OS or Linux (on a mainframe). Sure the business world doesn't run on Linux.
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Migration costs
I use Windows at home, and have at every company since computers became common-place. If my employer switched to running Linux and Open-Office, there will be a transition phase where staff are trained in the new system, and a drop in productivity as people try to remember where the new menu options etc have moved to.
Lets all switch to Open Office I once cried as we looked at the cost of MS Office licenses. I still shudder in horror at the car-crash effect that caused on the company - because we didn't plan for the time and costs of migrating everyone to a different software platform.
Certainly, starting up a company on open-source and accounting for the OS transition as part of the cost of employing a new person is going to result in lower costs, but for existing companies, it can sometimes work out a false economy.
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People Screwing People
Now for the economic lesson I learn early. Regardless of anything sold, manufactured, created, etc, the end purchaser carries the entire burden for any and all overhead. Meaning, the costs associated with; the idea / research & development, manufacturing / distribution, materials / labor cost, retail outlets, taxes, percentage profits, etc is what determines the final cost to the end user. You are saying to yourself right about now, hell we all know that, dummy. Have you ever thought of what the etc is in the cost associated with the products.
The final costs consist of the above mention however, does not include or exclude any and all other etc. Meaning, the costs of; lobbyist, political donations, bribes, payoffs, hiring ex government employees and politicians, and everything else you hear about or do not. Simply stating, the end user is the primary reason we all are taking in up the tail pipe.
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From one who switched back to Windows,
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