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Ballmer Argues Windows Genuine Advantage Approach = Cheaper Software

29-Apr-06 07:25 pm EST Leave a comment Go to comments

In a recent Yahoo! News article (from Associated Press, originally) Microsoft CEO Steve Ballmer was quoted making some remarks about how anti-piracy technologies & the software-as-a-service modelextended by "Web 2.0" will eventually make software available at a lower cost for everyone.

Only, that’s not what’s happening as my comments following the article illustrate…

 

Quote

http://news.yahoo.com/s/ap/20060427/ap_on_hi_te/france_microsoft

I mean no disrespect to Ballmer; but this latest statement is a pipe-dream.  Not an uncommon one, mind you.  How oft I’ve heard politicians and CEOs alike claiming that if only their costs were lowered somehow, the savings would be passed on to the consumer.  However, in my lifetime I haven’t seen this dymamic manifest once in any market – and, indeed, since it’s the nature of corporations to make as much money as possible to increase shareholder value, there’s not going to be much in it for Micorosoft to lower prices on its software once higher revenues come by way of Web 2.0 or whatever spark lets it happen.

Despite tech professionals’ moaning and groaning about the headachees caused by the "Windows Genuine Advantage" (or ‘WGA’, Windows anti-piracy feature), Microsoft has shown very little interest in rethinking either its implementation or processes around key allocation to make sure legitimate users don’t fall between the cracks.  This "imrpoved value" Ballmer speaks of doesn’t happeen when anti-piracy technology is introduced.  It creates a layer of maintenance and support that wouldn’t otherwise be necessary thus adding costs to the end-user.

And customer disatisfaction is growing.  It might be lessened were Windows, for example, to be sold at a lower price, but that hasn’t happened yet.

Ballmer’s words here would have real meaning if Microsoft products accompanied by anti-piracy technoloy were, in fact, sold for less.  Queried on this point, I suspect the CEO would contrive arguments about production costs that are static or whatever, and add that there’s some sort of lag time before the savings associated with WGA could be passed on into the pricing of Windows.  But all that shows is, minimally, a period of time where customers must endure lower quality and very same problems introduced by WGA, ahead of potentially being able to pass savings on to the consumer.

And after all is said and done, when a company has lost any such ‘soft’ customers to competing products, the proposal is to win them back at a lower price?  When something as integral as an operating system is involved, and factoring all the costs associated with switching that kind of low-level architectural element over – it’s pretty dobutful there’s any real incentive to lower price.

This isn’t to say there aren’t scenarios where these lower costs wouldn’t recruit customers, but for any company – including Microsoft – to take an interest in doing so, there has to be some kind of tangible benefit.  And since Microsoft hasn’t yet seen fit to put its money where its mouthpiece is and follow its own advice on this subject, why should anyone else?

If I’m wrong, I’ll be the first to celebrate.  But at minimum, that day is far, far off in the future.  Too bad too; since I love a good party. 😉

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Terry Glavin

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