Windows in Brazil Costs 20% of Per Capita Business Income

mjasay writes "Ever wonder why open source is so popular in Brazil and other BRIC nations? As one study suggests, one big reason may well be Microsoft's punitive pricing, which exceeds 20 percent of Gross National Income for businesses in Brazil (and 7.8 percent of consumer GNI). This leads to a second, related reason: At those prices, there's little hope that Brazil can build a home-grown software economy on the foundation of proprietary software. This factor is exacerbated by Brazil's widespread disdain for the United States, which also tends to favor software that is not perceived as American. Of late the free and open-source Brazilian dream may be fading a little but its importance to the long-term growth prospects of the Brazilian economy shouldn't be understated."

20%? What are the customs duties?

[Tsu Dho Nimh (663417)]

Duties on imports may have something to do with the 20%. Right as Intel started putting manuals online, I was working on that project, and Brazil was high on the list of downloaders. We tracked them to a technical university, did some emailing, and found that the duty on a printed manual nearly tripled the cost of the manual (in USD).

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[LurkerXXX (667952)]

Shhh, if you tell folks the Brazilian government is the one that's hiking up the price so much, Microsoft might not look as totally evil!

That's OK.

[gnutoo (1154137)]

Free software is a better deal regardless of Microsoft's perception and that perception is slipping everywhere. Microsoft's loss of face in the US is well documented and has more to do with Vista annoyances and "Works for Sure" DRM betrayal than it does with price. Free software, of course, comes with no such annoyances and consistently outperforms Windows on most hardware. People might be fooled into thinking Microsoft is less evil but will still know that free software is nothing but good.

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[truthsearch (249536)]

The biggest problem, as I see it, is Microsoft software's entrenchment. It's partly that the customers are hooked on it (the devil you know?), but it's also the expected difficulties in switching. It's becoming a lot less of a problem these days, but it's still a major concern. So while they may consider open source to be superior, they still may not be switching any time too soon.

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[jimicus (737525)]

The biggest problem, as I see it, is Microsoft software's entrenchment. It's partly that the customers are hooked on it (the devil you know?), but it's also the expected difficulties in switching.

People said the same thing about IBM 20 or 30 years ago.

Granted, computers are far more pervasive now than they were then. But so are IT professionals.

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[truthsearch (249536)]

20 to 30 years ago there were a lot less options. And all were expensive. Today price differences are huge and there's a little more diversity. But your point is still taken.

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[Luscious868 (679143)]

Free software is only a better deal if it works just as well as the commercial alternative. In some cases open source does, in others it does not, and there are still many instances where an open source alternative for a particular kind of software simply does not exist.

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[ColdWetDog (752185)]

Shut up already, Twitter.

Re:20%? What are the customs duties?

[annodomini (544503)]

From the article: "I imagine Microsoft charges about the same and Brazilâ(TM)s brutal tax burden makes up the rest." The summary was pretty confusingly written, but the article actually covered that.

Re:20%? What are the customs duties?

[morcego (260031)]

I find it hard to blame the government on this one.
The manuals are printed in Brazil. So are the CDs/DVDs.
Having access to the price list of a Microsoft distributor (not resaler), I can see some very big price differences, as I'm pretty sure happen everywhere else. The OEM license (which include media and manual, btw) costs about half the shelf price. And I'm not talking bulk here. I'm talking a guy with a computer store buying a single OEM license for a computer he is selling. Educational licenses are even lower (and no, there are no tax differences there).

Taxes on software in Brazil are far from high, if you compare it to other taxes. Actually, they are lower than taxes on books.

Even if the government completely removed the taxes from software, Microsoft prices would still be too high for a developing country like Brazil.

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[LurkerXXX (667952)]

It's nice how the post of the article fails to mention where most of the charge comes from, isn't it?

"one big reason may well be Microsoft's punitive pricing, which exceeds 20 percent of Gross National Income for businesses in Brazil "

That's not Microsoft's pricing. Microsoft's is about a third of that. It's a troll article.

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[Hognoxious (631665)]

Gross National Income for businesses in Brazil

I'm not even sure what that's suppposed to mean. Is it businesses' revenue, or Gross National Income - the two combined makes less sense than either apart.

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[zippthorne (748122)]

That seems like a moral thing to do, until you realize that it is exactly the kind of "market segmentation" goal that gave us region encoded DVDs.

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[menkhaura (103150)]

I'm Brazilian, and as a regular importer, I can tell you that books and software are some of the few products that are exempt from import taxes. There must have been another reason for this.

Re:20%? What are the customs duties?

[Flavio (12072)]

That's weird, I'm brazilian and last time I checked, books (and possible other printed materials) weren't taxed when imported. It's why I tend to buy books at amazon.com.

If you ever imported _anything_ in last 10 years (which i doubt) you surely knew this is not the reality.

Eerything you import, even those things that are explicitly not taxed, gets abusive taxing. Brazillian Customs sets tax according to their mood, and if you ask for a tax analyse, consider your tax doubled.

In brazil, the product price plus shipping (yes they tax shipping too) gets taxed 60% (import tax) plus 20% (ICMS, another tax).

Bullshit. I import goods at least once a month, and this is not the case. Printed material, such as books and magazines are NOT charged an import tax. Software is also exempt from import taxes.

The tax for imports over the mail are very clear: 60% over the value of the goods and shipping. The 20% ICMS charge only counts if you're importing with a courier such as FedEx or UPS. Regular mail does not get charged the 20%.

If the package does not accompany an invoice, or if the invoice's value is obviously fraudulent, then the customs official has can attribute a value which he believes is fitting. If you disagree with this value, you can challenge his value, but this will entail a lot of effort and you will most likely lose. You may also not import used goods, or prohibited items (such as firearms, explosives, live animals and organs).

Customs officials are corrupt bastards if you have to deal them in person (for instance, if not importing through the mail), but I've never had them charge me anything other than 60% over mail order items. In particular, I've imported at least US$ 5000 in books over the last 10 years, and I've never been charged an import tax.

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[Flavio (12072)]

I've never been charged an import tax ON BOOKS.

I pay the 60% tax on other things all the time.

There are "Studies" and there are Studies

[Infonaut (96956)]

Duarte's blog post is interesting and cites some statistics, but calling it a "study" is a bit rich.

Re:There are "Studies" and there are Studies

[gustavoduarte (1243006)]

As the author of the blog post, I totally agree :)

Did anyone RTFA before approving?

[supabeast! (84658)]

The original article does NOT claim that Brazil pays 20.1% of its income to Microsoft, it only states that the âoeCost of Business Licenses as % of GNI per capitaâoe is 20.1%. Only a complete moron would read that as 20.1% of Brazilâ(TM)s income going to Microsoft.

Furthermore, the OP claims that the linked article is a study; it is NOT a study, it is a blog post. It has not been fact-checked or reviewed by editors or peers, and could be a complete load of BS.

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[canuck57 (662392)]

The original article does NOT claim that Brazil pays 20.1% of its income to Microsoft, it only states that the âoeCost of Business Licenses as % of GNI per capitaâoe is 20.1%. Only a complete moron would read that as 20.1% of Brazilâ(TM)s income going to Microsoft.

Furthermore, the OP claims that the linked article is a study; it is NOT a study, it is a blog post. It has not been fact-checked or reviewed by editors or peers, and could be a complete load of BS.

First off, north of the border (Canada) we experience the same thing and I can assure you with NAFTA it isn't taxes. Check say amazon.ca and then amazon.com and check the prices. We see it on cars also. Be it Honda, GM, Toyota, Ford or others, the dual pricing happens all the time. Usually one price for the USA and a higher price elsewhere.

The term is called price fixing to local markets. Or, what is the term where I will sell to US customers at one price, and sell outside the US for more (or less)?

Grossly Misleading (Fraudelent?) Headline

[Jane Q. Public (1010737)]

Nothing in the article states anything like what the headline of the post does. That was just plain irresponsible sensationalism.

In Rich Countries Too!!

[mmport80 (588332)]

It's not just Brazil. Look at any startup in the US. Flickr, Google etc etc, all used open source to get their businesses off the ground!

Valid point if title corrected

[Exp315 (851386)]

The point which the author intended is valid, i.e., that commercial software licenses are much more expensive compared to local income levels in developing countries than in the USA. It's just unfortunately that the title is a bit misleading, deflecting the discussion. As a software publisher who has distributed my software in Brazil (in Portugese) in shareware and free-trial form, I can tell you that registration levels from Brazil are equal to those of the United States or Europe. I feel that's because my software is reasonably priced there for local income levels (about 40% less in local currency than it sells for in the USA). I would also like to add, as a frequent visitor to Brazil with many friends and family members there, I don't agree that there's any anti-U.S. attitude about software.

It's not M$, it's Bra$il

[SoTerrified (660807)]

The Brazilian gov't puts heavy taxes on any technologies that are imported. Their whole idea is to be so punative that companies that manufacture in Brazil won't have to compete vs. the outside world. The Wii costs over $1000 in Brazil and the Playstation 3 costs $1800. (These are 2007 prices, I'm not sure what's current) The games cost $300-$400 reais, which is probably about $200 US Dollars. It's not just a Microsoft issue.

Regarding Open source and proprietary pricing

[by Anonymous Coward]

Think about it, would you pay 2500 to 5000 bucks for your OS?, or would you want something in the realm of what you can pay for it, Open source is becoming an avalanche in poor countries just because its free, and its current ( up to date), 3.1416racy is rampant in poor countries because people can pay 5 to 15 bucks for the latest M$xp, and they can pay 3 bucks for a 3.1416rated game,but they can not pay the salary of a whole year for brutally expensive software according to their economy, when somebody can get an OS that does what they need, for free ( Open source/Linux), they spread the word AND the CD to all their social group, creating a geometrical distribution into their circles of buddies, I have several friends in South America, and none of them have an original disk of anything, they used the underground market to get what they needed, for the price they were able to pay. The day that M$/proprietary software matches the price of their products to the economic environment in which they want to sell ( Marking it geographically) they will get a hold of the market, in the mean time, people will want the lowest cost for the maximum benefit.

Not quite the price

[iris-n (1276146)]

I live in Brazil. The anti-american wave has largely passed away: you don't find love for US here, but neither hate.

As for the pricing scheme, it is really outrageous for the average income here, but I don't think that it has much to do with the linux adoption here. It's very rare to see someone that does care about copyright here. Even if Microsoft sold at reasonable prices (yes, it is the government's fault), just the fact we need to register, call for license keys and all that bullshit makes us just pirate the damn thing. And if it's hard to pirate (wga and all), we go away. And there's linux. It's free and it doesn't hassle us. Oh, it's open source and all? Cute. But that's not the main point.

Don't get me wrong, there are plenty of people that care a lot about FOSS philosophy (myself included) but for the masses, the "software that don't get in my way" is more important.

An intersting issue with the GPL

[Registered Coward v2 (447531)]

The FSFLA, the South American sister organization of the FSF, is trying to get the license altered, but comments like those of Omar Kaminski, one of the drafters of the license, that the "GPL is incompatible with Brazilian legislation," and that "perhaps free software in Brazil is moving in a different direction than in the USA" do little to reduce the concerns of FOSS advocates.

That is an interesting issue - we assume the GPL is enforceable but much of that seems to be based on US copyright laws and variou

So many myths!

[hackingbear (988354)]

Ever wonder why open source is so popular in Brazil and other BRIC nations?

This is simply not true. It is just a myth spread by open source advocates. Go check out who actually Linux, OpenOffice and Firefox in those countries by yourself.

In the eyes of non-geeks, the real benefits of open source is just the price and nothing else. When one can get a DVD with Windows and MS Office for $0 (download) to $1 (buy one at the street corner,) nobody will have the incentive to use Linux and Firefox. Period.

More: How to lie with statistics

[redelm (54142)]

Sure, the statistic may be correct, but it can also be meaningless -- take BR biz income (a relatlively small number because it excludes local barter) and divide by a huge population and you get a small number, easily and incongruously compared against MS Windows licence costs.

For a concrete example of abuse by statistics, consider that in the US, MS-Windows licence costs exceed the total annual income of at least 50% of all computer users [kids!]

Please do not mistake me for an MS-toad. Personally, any MS licence cost above large negative numbers is overcharging. I have to be _paid_ to use MS products.

Brazil free software dream is anything but fading.

[nxsryan (1279864)]

Sorry, but this repetition about the "Brazil FOSS utopia fading" that I hear everyone talking about is largely, I believe, due to the Linux.com article that is linked to above which highlights a bunch of negative comments by a few individuals and talks about some of the licensing controversies that have come up as Brazilian society as a whole widely adopts free software (I -wish- the government in the US cared enough about the GPL to have a licensing controversy).

In fact, the Brazil free software movement is an incredible phenomenon.

Consider:
1) Brazil's recent announcement at FISL of 52,000 computers labs (each with 15 terminals) serving over 50 million students -- with 29k of them coming online within the year -- all running Linux Educacional and KDE. Meanwhile, in -my- Ohio hometown, the public school system is fiscally doomed while still paying out enormous sums to Microsoft, IBM, Apple.

2) My wife, who is Brazilian, worked in the Brazilian equivalent of the US's White House, the Palacio do Planalto, migrating even the President's -Secretary- to an open source desktop running OpenOffice, not to mention the rest of the federal agencies in Brasilia. How is the open source migration of federal agencies going in Washington DC? Oh, right...

3) Brazil should be a model for much richer countries in this hemisphere, like the US and Canada, with their enormous and expansive Digital Inclusion program, which is entirely based on open source & free software. This program provides free training and computer lab access to bridge the digital divide in Brazil, with labs in urban favelas (ghettos that encircle the major metropolitan cities) and even remote indigenous communities living in the Amazon -- some of the Digital Inclusion projects are only accessible by BOAT. And in those areas, open source computer labs are, in many cases, the only computer access, the VOIP they provide are the only telephone, and so on.

4) A recent study confirmed that over 70% of Brazilian companies with more than 1,000 employees are using open source software.

5) Brazil has migrated the largest state-owned IT firm in Latin America (SERPRO) to open source software (including many more companies that are migrating).

6) FISL, hosted in Porto Alegre, has got to be one of the largest free software conferences in the world, if not the Americas. This year, Lula made news by saying that he would do everything he could to attend FISL. When was the last time George Bush or Bill Clinton said anything about free software, let alone went out of their way to support it in person?

It's really amazing to me how many open source advocates in the United States are indifferent to the open source phenomenon happening not only in Brazil, but throughout all of Latin America. One Linux.com article dismisses it as "hype" and that's enough for the most popular English-language open source news site? Meanwhile, an enormous free software movement goes literally un-noticed (when, in fact, there is plenty of room for voluntarism by wealthy North American developers in the region).

Personally, I make my living as owner of a business which works with open source/free software in Latin America and the United States. My wife was employed for several years by the Brazilian government working exclusively on the widespread deployment of open source technology in Brazil. And, I operate a news website which provides English-language updates about the free software movement in Latin America - http://news.northxsouth.com/ [northxsouth.com]

I urge everybody to take a look at our site and re-evaluate if Brazil or any Latin American country is a fading open source dream, or if, in fact, they are doing the hard work of converting their government to free software and, moreover, converting their society to open source software. We should take a look at what they're doing and ask ourselves: "why are -we- failing so miserably to influence -our- government?" instead of trying to find any gap in their impressive demonstration of the power of open source to transform massive social institutions.

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[chord.wav (599850)]

Backwards place to live? You get that from experience? I'd live in any brazilian coastal city over any US coastal city. Warm climate, nice girls, drinking caipirinhas all the time, hapy music, happy people.

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[billcopc (196330)]

The only difference between the Brazilian coast and the US coast is you can get killed over less money in Brazil. They have problems, just like every other country on earth.

Re:Time for us westerners to wring our hands...

[gregorio (520049)]

Backwards place to live? You get that from experience?

I don't know about him, but I do get that same impression, and from experience. A lot of it. Brazil IS a backwards place to live. While people from the US do complain about taxes and how their money is used by the government, things in Brazil are not simply "worse" on that point. They're completely different, as the people who pay taxes in Brazil are not the ones using governmental services at all. EVERY SINGLE NEED of the brazillian middle class (the ones who pay for that big joke named Brazil) is provided by very expensive private services.

And the impoverished are not just "poor", as in "lacking money for basic elements of life". They're also extremely indolent and dishonest. They lack basic culture and effort to achieve any kind of progress.

They have access to an infrastructure that would be considered an impossible dream decades ago. The things is: a lot of jewish and italian people arrived at this very same land of crap, decades ago, without any money at all and none of the thousands of schools and no universal and free healthcare at all. Yet they managed to educate themselves and provide good education for their children (who are now 40-50 years old), without a single cent in their pocket. Their sons and daughters (who were impoverished children) are now members of the upper-middle class.

I'd live in any brazilian coastal city over any US coastal city. Warm climate, nice girls, drinking caipirinhas all the time, hapy music, happy people.

You forgot to mention "random drug-motivated murders". And also forgot to mention that all those "happy people" are actually impoverished idiots who would rather spend their entire day partying around the city than working hard to improve their lives. Remember the Ant and the Grasshopper [about.com]? If not, it's a classic that explains a lot about those bozos you call "happy people".

And if booze is something that motivates you to some kind of decision about where to live, you need treatment, not a better city.

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[gregorio (520049)]

replace "brasil" by "US" in you post and you have a pretty damn good description of the USA, dumbass...

No, I won't have a pretty good description of the US, because most things I described in my post can't be said about the US. That doesn't mean it's a perfect country.

the economical and technological success of US in the 20th century was mostly imported talent from europe and japan that ran to the americas after both world wars.

You're confusing a few, remarkable examples, with the whole thing. Your theory

Backwards?

[hummassa (157160)]

I live in a nice 3,000,000 people city; we have theaters, movies, moderately high-speed Net access (2Mbps from my home), cable/sat TV, universities, ...
Care to elaborate?

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[Brandybuck (704397)]

Like it or not, the English name for inhabitants of the U.S.A ane the adjective refering to them is "American". It is NOT "USAian". It is not "United Statesian". It is instead "American". That this adjective also refers to inhabitants of the North and South American continents is unfortunate, but does not change the fact. The inhabitants of Brazil have their own unique name, which in English is "Brazilian". Language is an emergent order and you do not have the power to change it just because you're pissed.

I

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[Stormwatch (703920)]

The common view of this matter in Brazil and Portugal is: the denonym from one from the United States of America is indeed "americano" (denonyms are lowercase in the Portuguese language). However, "America" refers to the whole continent, not just a country.

Spanish-speakers, on the other hand, tend to be a bit touchy about that denonym, according to Wikipedia [wikipedia.org]

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[NMerriam (15122)]

which also tends to favor software that is not perceived as American

Brazil is American!

Those things are not mutually exclusive.

Certainly nobody in Brazil would find the statement that MS is an American company to be ambiguous, or find anything wrong with the statement that MS is perceived (by some) as less attractive than a domestic solution in part because it is American.

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[C0vardeAn0nim0 (232451)]

actually, we should call ourselves "vespucians". if the continents were named after americo vespucio, by tradition we should've used his last name, not the first.

so brasils is in "south vespucia", and the US should be called "united states of vespucia".

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[NMerriam (15122)]

You are right, but it's tough for many of us from the US to remember that. We've become so used to using American to refer to the USA that when we are in a place that uses the term properly it gives us trouble.
I was in Mexico recently and even though I consciously tried to avoid saying 'America' or 'American' in reference to the US, I still slipped up quite a bit. I think a lot of people here are not even aware of the distinction.

Was anyone in Mexico remotely confused when you referred to America or yoursel

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[NMerriam (15122)]

You got me! I'll be going down to McMurdo to work soon, it's my last continent. I've only been to the North Pole so far, I figure I have to finish the collection.

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[techno-vampire (666512)]

Don't forget to pack your fur-lined jockstrap. We wouldn't want you to turn into a Unix eunuch, now would we?

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[stoolpigeon (454276)]

I was in Mexico City, hanging out with university students on a number of campuses. They were all pretty nice about it but made clear their preference. I had been warned ahead of time, but still slipped up.
 
You mention Mexico being mistaken as part of Central America. Since I've been back I've had a couple people ask me how I enjoyed my time in South America. I wish I was kidding.

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[Shihar (153932)]

If you are using the English language, American refers to people from the USA. If you want to refer to a continent, you don't say "America". There is no American continent. There is certainly a North America and a South America, but that is it. So, if a Brazilian wants to refer to themselves as a member of the South American content, in English, they say that they are South American. Canadians say North American. If you want to refer to both continents together, they are "the Americas".

Get off the PC

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[EvilIdler (21087)]

Every nations chops down their nations name into something less than the full thing.

Yes, so Norwegians refer to the country as "No'way", to avoid spelling the full, long-winded name :)

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[Shihar (153932)]

You joke, but the full name for Norway is the Kingdom of Norway.

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[plopez (54068)]

Bad accounting. Not all of the 2500 USD leaves the country, there are taxes as another poster pointed out, as well as shipping and refining costs.

For a computer, factor in that the electronics will usually come in from Taiwan or China and that much of the coding is done in India and other places.

So really, if pushed, I couldn't make any sort of analysis except to say it is complicated.

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[doktor-hladnjak (650513)]

I remember hearing a factoid last year that said out of all US states, only Washington runs a trade *surplus* with China. It's probably true on the whole and not just with China, but this article was specifically talking about the President of China visiting the state. There's basically two big reasons for that trade surplus--both Microsoft and Boeing make most of their products here. People complain that we don't make anything in America anymore and don't export anything, but software is actually still on

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[Registered Coward v2 (447531)]

The experiences you have as an American tourist mean very little in terms of deciphering the true feelings of the civilian population. Especially if you're there for business.

True, but as someone who has traveled abroad on business and pleasure; and have many friends and relatives abroad, disdain for American government policies does not translate to disdain or dislike of Americas, or even "America."

Most people outside of the US can keep those things separate; something many Americans seem to have difficulty with, as demonstrated by the accusations of "unpatriotic" if you say negative things about GHB.

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[jav1231 (539129)]

Maybe but perhaps the OP should cite a survey that actually SHOWS "widespread disdain for the United States" as opposed to exaggerating figures from the one cited.

I realize it's hip to hate the US right now but like most hip things it can change.