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Windows Buyers Pay Patent Tax of $21.50 ? 161

Posted by Zonk from the pricy-litigation dept.
An anonymous reader writes "Ars Technica has a story up about an estimate done by the Software Freedom Law Center of how much purchasers of Microsoft Windows are paying in 'patent taxes'. 'SFLA took the total of $4.3 billion dollars in legal costs for Microsoft from 2001 to 2004 and divided it by estimated sales of Windows XP over the same period — approximately 200 million copies — to come up with the $21.50 estimate. The organization added that North American and European customers, who pay more for Windows licenses than customers in other parts of the world, actually ended up paying more of this patent tax, and that people who pirate Windows pass their share of the tax on to paying customers.' The article goes on to point out several flaws in the study's logic. For example, the actual cost of a Windows OEM hasn't increased in the last few years; Microsoft isn't passing this cost directly on to the consumer."
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Windows Buyers Pay Patent Tax of $21.50 ? More

Windows Buyers Pay Patent Tax of $21.50 ?

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  • What about the people who work for Microsoft. What kind of patent tax do they pay? :-)

    • Re:Something else to think about. (Score:5, Funny)

      by Farmer Tim ( 530755 ) on Thursday April 19, 2007 @02:07PM (#18802519) Journal
      Does "an eternal stain on their souls" count as tax?

      • Re: (Score:3, Interesting)

        by RHSC ( 1019802 )
        Ever meet a Microsoft employee? Most of them are really quite nice
        • Only the sales reps. I stand by my statement.

  • ohnos the consumer pays developemnt costs (Score:5, Insightful)

    by 0racle ( 667029 ) on Thursday April 19, 2007 @01:24PM (#18801845)
    Wow, what a news flash, the cost of developing software is covered by the consumers. I never would have guessed.

    • Re: (Score:3, Insightful)

      by tomstdenis ( 446163 )
      The point is part of what you're paying doesn't even go towards the people who are writing the software. It'd be like if your car cost $35,000 and $20,000 of which was a "car design patent tax." Wouldn't knowing that a huge chunk of the cost just goes to some squatter who filed a patent first?

      That said, I just avoid said tax by not buying windows.

      Tom

      • Re: (Score:2)

        by CFTM ( 513264 )
        Uh it'd be more like 7,000 on a 35,000 going to tax; last I checked Windows XP Professional OEM is at least $100 so 21.50 is about 20%.
      • What's the point. There's patents on just about everything you buy. The foot covers on my baby girls clothes are patented, for antiskid, convertability from socks, to long cuffs, to rolled up cuffs. If you buy a car, part of it goes to cover the costs of the patented items in the car. Also the estimate is completely wrong, as it assumes that the only product that incurs legal costs is windows XP, and that windows XP is the only product they sell. Also it assumes that all legal costs go towards protecti

        • Re: (Score:2)

          by jZnat ( 793348 ) *
          At least those other patents you mention are physical objects. Why in the world mathematical algorithms and business methods can be patented (besides greed) is beyond me.

      • Re: (Score:2)

        by misleb ( 129952 )
        There are a lot of different costs associated with developing a product. There's paying the programmers, lease on the facilities, equipment, insurance, management, lawyers, advertising, etc. It is just plain naive to think that the only thing that your purchase money should be going towards are the people who actually write the software. Why not talk about the "advertising tax" or the "insurance tax." Fact is that there is a lot of overhead in doing just about any kind of business. Managing patent issues ju

      • Re: (Score:2)

        by batkiwi ( 137781 )
        Windows retails for $200 or thereabouts. You don't think that $3500 of a $35000 car would go to licensed technology?
      • Two thirds of the cost of a car in Norway IS tax.

    • Re:ohnos the consumer pays developemnt costs (Score:5, Interesting)

      by shawn(at)fsu ( 447153 ) on Thursday April 19, 2007 @01:32PM (#18801991) Homepage
      Gee who would have thought huh?
      Secondly, this is BS. It ignores the fact that MS sold more products in that period that just WinXP than just an OS, things like Office.
      • Secondly, this is BS. It ignores the fact that MS sold more products in that period that just WinXP than just an OS, things like Office.

        Also, M$ would probably sell Windows for the same price regardless of patent settlements.

        So therefore, M$ is the one paying the 'tax'.
        • Yup, this is just like most cut-and-paste arguments about how Giant Corporation X shouldn't pay Fee Y or Tax Z because costs are passed on to consumers. It fundamentally ignores the fact that producer's cost isn't nearly the most important factor in determining price. They'll charge what the market will bear, and in a near-monopoly, that amount bears little relation to their costs.

          Obviously, in highly-competitive markets, the relationship between cost and price is much closer, but even so, it takes a back

          • Re: (Score:2)

            by HUADPE ( 903765 )
            In a monopoly (according to economic theory), the price charged is that where marginal cost = marginal revenue. For the mathematically minded among us, that's d/dx(cost) = d/dx(revenue). So cost does matter, if it's marginal. Lawsuits aren't marginal, so they are just sunk cost and have little effect. A $20/license actual tax would be very different though.
      • This legal costs come out of prifits and are a cost of doing business, not direct development costs.

        Saying that the legal costs are $x per unit implies that that the Microsoft would have charged less for XP if there were no patent costs. That is patently false. MS chanrged as much as they could for XP without scaring away the customers.

      • No kidding. And what about other legal expenses between 2001 and 2004? They can't all go to patents.

        Business have legal expenses everyday. Lawyers have to look over or participate in the writing of contract agreements, EULAs, disclaimers and so forth. And those aren't even the most expensive legal fees. I'm pretty sure Microsoft was involved in more than one lawsuit between 2001-2004. Don't you suppose they'd have had to hire a lawyer or two for that?

        And, as you say, each of Microsoft's products incurs

      • Casino logic won't work here, the money comes from you and me.

        Secondly, this is BS. It ignores the fact that MS sold more products in that period that just WinXP than just an OS, things like Office.

        First, don't call me a "consumer". At best, I'm your customer. The term "consumer" is insulting and inaccurate. The dollars I pay, unfortunately, don't make Windoze go away.

        Second, the 4.3 billion dollars M$ spent on patents don't magically disappear because you can't figure out which M$ customers actuall

        • I never said the money doesn't come from you and me. Who else would it come from. I was agreeing with parent. The part that is bs is the dollar figure they give. You have to spread that out on all MS goods and services for those years. Not just one product.

        • Re: (Score:2)

          by dedazo ( 737510 )
          Pretty much only you would take this and claim that the problems caused by patents that affect all of the industry (except for the happy submarine patent farms and "IP concerns" like Eolas and friends) are the result of the "inefficiency of Windoze use" and your imagined "tax chain" that of course in your mind does not apply to anything else in the macroeconomic scene ("oh, you use forklifts in your warehouse. If you used robots like the ones on Aliens you's save me so much money").

          You can add all the inf

  • The better questions are (Score:5, Insightful)

    by s20451 ( 410424 ) on Thursday April 19, 2007 @01:25PM (#18801849) Journal
    1. How much of the $21.50 goes to the companies and/or individuals who hold the patents?
    2. How many innovators (engineers, etc.) are employed as a result of the $21.50?
    3. How much of the $21.50 is eaten up with legal fees?

    I've got no problem paying a license fee as long as I am getting a significant amount of innovation for my money.

    • Re: (Score:2, Informative)

      by Anonymous Coward
      3. How much of the $21.50 is eaten up with legal fees?

      Well, considering the basis for the $21.50 number starts by taking the legal fee and dividing it by the number of copies sold, the answer is simply ALL OF IT.
    • Not just for innovation. I have no problem paying a license fee for shit that works and does its job without having to worry too much. This is a little off topic, but... As costs for rebuilding the network at the company I am at now were making management nervous, I got them to reexamine their needs rather than blindly follow a project plan an outside contractor created for them (small non-profit building it's first real network/IT staff.) With a little education they realized we could save thousands on W
  • MS makes most of its money from its money from server versions and Office. It could give away its desktop software and still make billions.
    • MS makes most of its money from its money from server versions and Office. It could give away its desktop software and still make billions.

      If that's true, why don't they? That would virtually kill Linux.
      • Because they're still virtually killing Linux and making money off the sale of the software. People don't use Linux because Windows is too expensive. Even if windows was free, a lot of people would still use Linux because it's open source, and because it suits their needs.

      • Re: (Score:1)

        by Gr8Apes ( 679165 )
        They already do. The cost of OEM windows is pretty darn low and doesn't even register with the masses because it's "included" in the cost of almost any PC you can buy.
      • Antitrust suits, look what happened with free IE.
        Additionally, there's corporate mentality: if companies didn't have to pay for it, they wouldn't trust it.
  • These billions of dollars in legal fees seems to me all the more reason for Microsoft to release a commercial Linux distro.

    *ducks and runs full speed from the pitchforks and torches*
  • For example, the actual cost of a Windows OEM hasn't increased in the last few years; Microsoft isn't passing this cost directly on to the consumer."

    Yea, OK then who is paying for it?
    • I think what the summary meant is that Microsoft hasn't increased prices to cover patent case losses. i.e. MS started selling OEM Windows for $X. Since RTM, they've paid out ~$20 x # of copies sold. They did not then turn around and start selling OEM windows for $X + 20.
    • Exactly. The profit margin on massively deployed software like office/windows is so large, that changes either way to MS operating costs do not need to effect the retail price of the software.

  • Let's Not Forget That M$ Has More Products than XP (Score:5, Interesting)

    by rhartness ( 993048 ) on Thursday April 19, 2007 @01:28PM (#18801907)
    I'll admit, I only skimmed the article, but if M$ spent that much money, total, on patent legal fees, that money needs to be divided evenly against the revenue of all offered products.
  • How much of our income tax should actually be labelled "Bullshit Lawsuit Tax," to cover the government's legal fees for BS lawsuits?

  • Windows XP??? (Score:2, Redundant)

    by jonnythan ( 79727 )
    Is Windows XP the only thing Microsoft sold from 2001 to 2004?

    What about 2003 Server? Windows 2000 Server? SQL Server? SMS Server? Exchange? Office? Windows PocketPC? XBox? Xbox games? Xbox controllers? VisualStudio? Mice? Keyboards?

    How the hell do they figure that *all* of Microsoft's legal fees are directly accounted for by Windows XP?

    • Is Windows XP the only thing Microsoft sold from 2001 to 2004?

      It's the most popular thing they sold and a fair normalizing factor. You can try to smear it out to "products" of secondary importance but that only shifts a small fraction of the costs onto business users who pass them back to you and me anyway. XP and Office were the big money makers, so that's where they money actually came from. You can't run Office without XP (or Wine but that can be neglected here), so you might as well divide it that

  • Invalid assumptions (Score:4, Interesting)

    by overshoot ( 39700 ) on Thursday April 19, 2007 @01:31PM (#18801969)
    That "patent tax" isn't being paid by purchasers -- it's being paid by Microsoft's stockholders.

    Microsoft's pricing isn't driven by their costs, it's driven by revenue maximization. A change in their cost structure has no effect on the prices they charge; raising prices would reduce their gross revenues, which would be quite counterproductive.

    • That "patent tax" isn't being paid by purchasers -- it's being paid by Microsoft's stockholders.

      Which means it's being paid mainly by mutual fund holders saving for retirement.

      It's mainly a tax on 401(k)s, IRAs, and pension plans.
    • At last, a post that understands the diffeence between costs and pricing.

      This is also a reason MS spends so much effort on spinning Vista sales etc. MS revenues are not hugely affected by Vista because pretty much every Vista sale would have been an XP sale if Vista had not come about (discounting for a moment XP to Vista upgrades, which are close to non-exixtant). Therefore, for the next few years anyway, Vista is a pure cost with no revenue upside. That's $5bn of Vista development costs straight out of sh

      • Vista is a pure cost with no revenue upside. That's $5bn of Vista development costs straight out of shareholders pockets. That's perhaps 50c per share or so, approx 2% of the share value.

        Isn't it even mildly disturbing to you that patent costs are equivalent to what they paid to make something of value? A share is only worth future earnings, we shall see what Vista, Zune, and other second rate offerings take out of that share price. Bu-Bye, M$. When they are gone and unable to push bad "IP" legislatio

    • Re: (Score:2)

      by daevt ( 100407 )
      1. The customer pays at least some of the tax since taxes go into the prices of the products. Also, since I assume that the patent costs were paid by Microsoft in order to protect some of the functional uniqueness of their products, it shouldn't have been called a tax by the article's author, but rather a developement cost.

      2. Pricing is always driven by cost, there may just be other revenue sources (think about complimentary products like Office, also think about different pricing schedules, re: price di

      • 2. Pricing is always driven by cost, there may just be other revenue sources (think about complimentary products like Office, also think about different pricing schedules, re: price discrimination) which can make up the difference in pricing (by the way, price is not the same thing as cost). Also, revenue-cost=profit, profit being what firms usually try to maximize. Although trying to increase revenue is part of profit maximizing, you make it sound like they ignore costs, which is most likely false.

        Gr

  • formula? (Score:3, Insightful)

    by m0rph3us0 ( 549631 ) on Thursday April 19, 2007 @01:31PM (#18801971)
    It's a good thing Microsoft doesn't sell any products other than Windows XP. And it's also a good thing none of this technology that was patented will go into any future products. The real price when distributed over the myriad of products Microsoft sells drastically reduces this figure. If you include just Office this figure will drop in half. Now you have to wonder how many of these patents apply or are financed by much higher end products, ie. Windows Server. Basically, $21.50 is the MOST a customer could be paying for patents on Windows XP. The real thing to consider, is whether the average customer will derive more than $21.50 in value from those features. I think they will.

  • Windows Tax? (Score:5, Funny)

    by Apocalypse111 ( 597674 ) on Thursday April 19, 2007 @01:31PM (#18801973) Journal
    Well, I guess its a good thing that I've never paid for a MS OS, or for an MS Office product.

    This post written on a PC running Windows and Office XP. How did those get there? Hold on while I go look for my, erm, install disks... and just ignore that folder named "ISO-WAREZ". *flees*
  • ...and years i kept asking for a stupidity-tax.

    now...there it obviously is! :)

    • Re: (Score:3, Interesting)

      by Yuan-Lung ( 582630 )
      i kept asking for a stupidity-tax.


      Lottery Tickets? Pyrimid Schemes? Informercial diet pills and other psuedo medical/magical items? Spammercial male enhancement products? Cash contribution to cults? Rotten MAFIAA crap?

      Plenty of things to keep fools and their money parted.

  • Economics of Patents (Score:5, Informative)

    by Grond ( 15515 ) on Thursday April 19, 2007 @01:33PM (#18802001) Homepage
    One counterpart to this kind of study is this argument: If you think $21.50 is a lot, just imagine how much it would cost each individual customer to negotiate and license all of the patents in question? By centralizing the negotiation and licensing, Microsoft greatly reduces the total transaction costs.

    That said, I'm sure a lot of these patents are absurd software patents that Microsoft decided it was cheaper or easier to license than defeat in court.

    • Re: (Score:2)

      by ect5150 ( 700619 )

      By centralizing the negotiation and licensing, Microsoft greatly reduces the total transaction costs.

      This argument literally looks like an argument that proposes a monopolized situation wins out over a competitive situation. Which just isn't true. All that is needed is an intermediary acting on behalf of the consumers for small fee (i.e. - where the fee + amount is less than the $21.50)
    • When MS pays for patents, they are in part legitimizing the patent holder's claim. Doing this successfully and selectively can help set a barrier for entry by others, in particular the free OSs. This can effectively add features to MS products that likely will then not show up in open source products.

      Interestingly, MS did pretty much the same thing by paying license fees to SCO. Doing so legitimised SCO's claims and helped cause confusion amongst potential Linux users.

    • By centralizing the negotiation and licensing, Microsoft greatly reduces the total transaction costs. That said, I'm sure a lot of these patents are absurd software patents that Microsoft decided it was cheaper or easier to license than defeat in court.

      Ah, the magic of cross-licensing raises it's ugly head again. It's funny how those costs would go to zero if it were not for the insane software patents that M$ bullied and bribed into law. It's not like they have any respect for those laws either. M$

    • Re: (Score:2)

      by GWBasic ( 900357 )

      One counterpart to this kind of study is this argument: If you think $21.50 is a lot, just imagine how much it would cost each individual customer to negotiate and license all of the patents in question? By centralizing the negotiation and licensing, Microsoft greatly reduces the total transaction costs. That said, I'm sure a lot of these patents are absurd software patents that Microsoft decided it was cheaper or easier to license than defeat in court.

      What's really happening is that the patent system is

  • and that people who pirate Windows pass their share of the tax on to paying customers.


    They aren't passing anything along. You can only pass your portion of the tax if the price would adjust in the market.

    In other words, they are only passing the tax along to customers if MSoft would have charged a different price with them being paying customers.
  • Woah, you mean Microsoft charges the price that will bring in the most revenue, rather than basing the price on their fixed costs? Amazing. Next you'll tell us that their finance guys have a better grasp on economics than the average Slashdotter...

  • This one always confuses people.

    A business, by virtue of being a business, always charges whatever will (they think) be most profitable.

    There is nothing that you can do to a business that'll make them want money they didn't want before. They already want it all.

    So in a very real sense no cost is passed on to consumers; the market decides the optimal price for the product. If that's high enough to make a profit, the business grows; if it isn't, the business dies. No company can pass on costs that the m

    • Re: (Score:3, Insightful)

      by secret_squirrel_99 ( 530958 )
      So in a very real sense no cost is passed on to consumers; the market decides the optimal price for the product

      This is true of many purchases for which a simple supply and demand model is adequate. This isn't true of many markets however. In markets for essential goods where there are few alternatives these models collape. The obvious example is the energy market. Rising prices should reduce demand, which should cause prices to fall again, until an equilimbrium is reached. This isn't the case however

      • Re:Passing the cost onto consumers (Score:5, Informative)

        by marcosdumay ( 620877 ) <marcosdumay@@@gmail...com> on Thursday April 19, 2007 @02:11PM (#18802571) Homepage Journal

        We call that a 'inelastic' demand. Note that it will react to price increases, but it takes huge increses to compensate a small supply difference.

        On the case of energy, if it is expensive enough people will freeze, but won't be able to buy it. That's sad, but the model works. The point is not to tell nice things, but to be able to predict what will happen.

        • The black market (piracy) for Windows keeps the demand for legit copies somewhat elastic. Supply is immaterial, it's infinite -- except that as a non-commodity good, Windows is not tradeable and therefore doesn't act as if it had infinite supply.

          On the case of energy, if it is expensive enough people will freeze, but won't be able to buy it. That's sad, but the model works.

          As the cost of energy rises, the demand becomes more elastic. Non-essential uses of energy are curtailed. Of course, as you say, if

          • If electricity price rises, more will turn to gas, there is also an effect that keep the price of power sources together.

            Software is only different by the fact that producing another copy has virtually no cost, once the development has been made.

            It is actually a dead-on example of the fact that price charged to a customer is not related directly (it is not a linear relation) to the prices occured in development phase.

            Do this tomorrow :
            • - Ask a student how the price of is computed by the company sell
            • I'm not sure what you're getting at here. I was discussing elasticity of demand in the consumer energy market -- I'm fully aware that good pricing is independent of production cost.

              If electricity price rises, more will turn to gas, there is also an effect that keep the price of power sources together.

              We're still talking about the energy market, though, regardless of source. Gas is a use-restricted energy source, so not completely interchangeable with electricity, but their prices are interdependent.

              It

    • It's clearly not the case here, but your model doesn't work on competitive markets.

      If there is a competition, the market price is normaly established by the sellers (trying to outbid themselves), not the buyers. So, if the cost increase, all sellers tendo to increase their price, and the customer normaly sees a price increase that is even bigger than the costs increase. With time the price comes back to the expected (original price + cost increase).

    • Re: (Score:3, Insightful)

      by 99BottlesOfBeerInMyF ( 813746 )

      A business, by virtue of being a business, always charges whatever will (they think) be most profitable... So in a very real sense no cost is passed on to consumers; the market decides the optimal price for the product.

      What you're neglecting to consider is the cost of patent licensing upon the market in question. For example, if it costs MS $20 to license the patents they use, what does it cost Apple to license some of those same patents? What does it cost Sun and Redhat? What does it cost to, alternatively, work around those patents? Once you've determined the above, what the does the cost of patents to the market, in general, do to the price of software and the perceived relative value?

      For example, suppose I'm in a m

      • What you're neglecting to consider is ...

        He's also neglecting to consider that Microsoft is a goddamn illegal monopoly that has long set the prices for its products, worldwide, at whatever the hell it wanted to set them at. Discussions about supply-and-demand and "competing" on anything are virtually meaningless in that context.
  • 20 posts and nobody's said that the whole retail price of all M$ software is a patent tax? Did I log onto digg by mistake?
  • If Microsoft increase their prices, sales will fall. So they're going to choose a price that maximises their profits.

    Whether they have to pay for development, litigation, or gold plated toilet brushes in the executive washroom, the price remains the same.

    I mean, seriously, does anyone think, for a second, that if Microsoft didn't have to pay this, the price of Widnnows would fall by $12.50 a copy? Of course not. The extra $21.50 would be pumped back into Microsoft.
  • the actual cost of a Windows OEM hasn't increased in the last few years; Microsoft isn't passing this cost directly on to the consumer."

    Then hit the right target, for Heaven's sake. If they're not passing along the cost increases, then it's the Stockholders paying for this.

  • Am I reading wrong or... (Score:5, Insightful)

    by Shados ( 741919 ) on Thursday April 19, 2007 @01:46PM (#18802201)
    Or is this like if we considered Windows XP was the only revenue source of Microsoft during those years? And there I thought Microsoft had quite a few products (even if you don't count the "at a loss" ones).

    • Or is this like if we considered Windows XP was the only revenue source of Microsoft during those years? And there I thought Microsoft had quite a few products (even if you don't count the "at a loss" ones).

      In a way yes... I agree with you that it seems to be a flawed way to spread the legal costs. I think you suggest that it would be better to spread over the whole revenue line... another way would be to spread it over positive income generating divisions. Lets say we take the entertainment division of

  • Comment removed (Score:5, Interesting)

    by account_deleted ( 4530225 ) on Thursday April 19, 2007 @01:56PM (#18802335)
    Comment removed based on user account deletion

  • Patents adding to the cost (Score:5, Interesting)

    by Applekid ( 993327 ) on Thursday April 19, 2007 @01:58PM (#18802383)
    That you're paying a "patent tax" is nothing new. You're paying a "tax" on everything. If you've ever bought a pack of smokes you're paying into their legal fees, for instance. It's really just a cost of doing business not related to development nor profits.

    What I'd find more interesting is how much of the cost of Windows goes into licensning patented software. MSPAINT can read and write .GIF files. Windows comes with a media player that can play .MP3 files. Windows natively supports TrueType fonts. How much per copy is going to make sure they're on the up-and-up with those IPs?

  • The Taxman is coming (Score:3, Funny)

    by zappepcs ( 820751 ) on Thursday April 19, 2007 @02:01PM (#18802439) Journal
    I couldn't believe this, there really is (well, was) a window tax. According to http://www.neatorama.com/2007/04/19/what-wont-they -tax/ [neatorama.com] ... Now, can we get some boards on the monitor please?

    ----------
    WINDOW TAX

    Pitt the Younger also tried a chimney tax, but found that windows were easier to count. People paid the tax based on the number of windows in their home. Result: a lot of boarded-up windows.

  • 2^32 (Score:5, Funny)

    by mshurpik ( 198339 ) on Thursday April 19, 2007 @02:03PM (#18802469)
    Anyone find it ironic that Microsoft's legal costs have reached the size of a long int?

    • Re: (Score:1)

      by Forseti ( 192792 )

      Anyone find it ironic that Microsoft's legal costs have reached the size of a long int?

      Ironic? Only if Microsoft once said that that datatype was unneeded because no one would ever need to hold a number that large in a computer. It is funny, though!

    • Re: (Score:2)

      by hclyff ( 925743 )

      Anyone find it ironic that Microsoft's legal costs have reached the size of a long int?
      So that's why Microsoft legal department recently had to purchase a 64-bit machine for their accounting...
  • It seems to me like there are two invalid assumptions here.

    1. 100% of Microsoft's legal fees revolve around Windows and have nothing to do with any of their other numerous products.
    2. 100% of Microsoft's legal fees are spent for patent-related reasons.

    It seems to me like that it would be better to figure out the amount of money spent on patent-related subjects and then divide by the total sales numbers. Then there would be a bit of work to do dividing that up proportionally among the products depending on
    • 3. Microsoft's prices are directly related to their costs, rather than to what they can get away with charging.

      You know, I read only the blurbs on most Slashdot stories, and when I don't know any better, those blurbs become part of what I believe to be true about the world. It's disturbing to think about the effect stories like these are having on the collective consciousness. Just one more stupid, wrong thing that soon everyone will "know".

      • Re: (Score:2)

        by drsmithy ( 35869 )

        You know, I read only the blurbs on most Slashdot stories, and when I don't know any better, those blurbs become part of what I believe to be true about the world. It's disturbing to think about the effect stories like these are having on the collective consciousness. Just one more stupid, wrong thing that soon everyone will "know".

        Think about it ? Just click on "Read More" and you can watch it in action !

  • Pricing software is not trivial. There is certainly an upper limit as to the value provided by the software. Charging more than that will result in very few, if any sales. So there is an upper bound. But this upper bound is pretty high, way higher than you would normally see anything priced at.

    What it cost to produce is a very difficult number to arrive at in a large company. Not much simpler in a small company either. And how do you amortize that? Generally, this is a fruitless exercise that might g

  • But Windows only costs $3! (Score:3, Informative)

    by monopole ( 44023 ) on Thursday April 19, 2007 @02:43PM (#18803033)
    It says right here http://slashdot.org/article.pl?sid=07/04/19/155321 9 [slashdot.org] if Windows cost any more Microsoft would be engaged in dumping and abuse of monopoly power!!
  • >> The article goes on to point out several flaws in the study's logic. For example, the actual cost of a
    >> Windows OEM hasn't increased in the last few years; Microsoft isn't passing this cost directly on to
    >>the consumer."T

    Sure they are, by forcing people to repeatedly purchase new versions of products by ceasing support for the existing ones.
  • I agree that the study is deeply flawed. Really, the bottom line for pricing is, "Is this product worth this much $$ in this market?". MS seems to think their product is worth $200. To be fair, it is a big deal, a whole OS, and might be worth that much in certain markets. If it's not worth that much, they should alter the pricing. Trying to price something based on how much development and resources (and legal costs) went in to it is pointless. I would say most people are not interested, for example, in GM'
  • a) Get some of our money back by encouraging MS to aggressively pursue any patent violations in Linux, collect licensing fees, and pass the money to us?
    b) Discourage other companies from suing MS for patent violations to lower the cost of MS software?

    OK, I admit that I love to draw contrary conclusions from poorly-reasoned arguments.

  • Comment removed (Score:3, Interesting)

    by account_deleted ( 4530225 ) on Thursday April 19, 2007 @03:29PM (#18803677)
    Comment removed based on user account deletion
  • "Microsoft isn't passing this cost directly on to the consumer"? Of course they are. It's being passed on in the form of less money spent productively on the OS itself.

    How much better would Vista have been with 5%-10% more programmer-hours (and tester-hours!) spent on it? I don't know, but if MS isn't raising the cost thanks to patents, they're doing less work on it.

    Money's gotta come from somewhere.

  • Duh. (Score:2)

    by SeaFox ( 739806 )

    The article goes on to point out several flaws in the study's logic. For example, the actual cost of a Windows OEM hasn't increased in the last few years; Microsoft isn't passing this cost directly on to the consumer."

    They haven't released a new product in the last few years either, till now. They couldn't very well raise the price of XP years after its release, with most people asking where the mythical new Longhorn was, and keep a straight face.

    Obviously the adjustment is made in new products - Vista.

  • Microsoft likes to copy Product A and change "/" to "\" and call it Microsoft Product B. Frequently they get sued over this and they pay people off and it perpetuates the fiction that Microsoft invents things. It is part of the Microsoft Story that Bill Gates and Paul Allen brought computing to the masses by inventing the personal computer.

    When the QuickTime file format was standardized as MPEG-4, with H.264 video and AAC audio for consumer devices, this effectively was open source QuickTime, leveling the p

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