Microsoft software for $3? Yes, you can get it if you live in an under developed country and your government is willing to give free PCs to schools. On initial look, it appears this pricing may only be for employees at government agencies.
Still, it’s an interesting tactic by Microsoft who is pricing its software below the price of pirated software which is rampant in countries like Vietnam, Ukraine, and China that have over a 90% piracy rate. In fact, story just came out that only 244 legit copies of Windows Vista have been sold in China. When the level is that high, there’s no way you’re going to convince the public that it’s illegal or stop the industry. So what do you do? Do what Microsoft is doing. Undercut their prices to essentially eliminate the piracy industry altogether. Although this price may not be low enough. Supposedly you can get an illegal copy of Vista in China for $1.
Get people hooked on their software (like a drug dealer) and maybe make money through ancillary services like customization (or water pipes).
The drug dealer reference is only to mock. Software industry has been going in this direction for a while. Take a look at the Linux model. Linux companies make their money selling customization services.
Microsoft’s hope is this low pricing will double the PC user base. I think the issue is it’ll hopefully eliminate the boxed software piracy market because people will start to see the value of getting legit software over pirated software. In addition, the piracy market may also be eliminated as the entire software industry moves to software as a service.
As for the people stuck on pirated software. Good luck trying to call tech support from that street corner card table vendor you purchased Windows Vista.
Disclosure: Microsoft is a client of Spark Media Solutions.
