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Microsoft The Almighty Buck

Windows in Brazil Costs 20% of Per Capita Business Income 236

Posted by CmdrTaco
from the hate-when-that-happens dept.
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."
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Windows in Brazil Costs 20% of Per Capita Business Income

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  • by Tsu Dho Nimh (663417) <abacaxi AT hotmail DOT com> on Saturday May 03, 2008 @12:55PM (#23284882)

    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).

    • Re: (Score:3, Insightful)

      by 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!
      • 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.

        • Re: (Score:3, Insightful)

          by 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.
          • by 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.
            • 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.
            • by jedidiah (1196)
              20 or 30 years ago the feds actually enforced the Sherman Act.
        • Re: (Score:3, Insightful)

          by 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.
          • by Kidbro (80868)
            Free software is only a better deal if it works just as well as the commercial alternative.

            This is not true. The business I work for wouldn't dream of using proprietary software for anything business critical, as it leaves us too vulnerable. Yes, that means that we sometimes need to pick something that doesnt work "just as well", but we know that if we suddenly run into problems with the software, we can fix or work around them.

            This security is worth quite a huge gap in quality for us - to the point that we
          • What is really missing? My experience is that commercial software lags the free softare world with the most restrictive being at the bottom of the pack. There are very few applications where a free alternative is not available and none of them are general purpose desktop things most businesses and home users are intersted in.

          • by jedidiah (1196)
            NO piece of software has to "work as well as" any other
            arbitrarily chosen piece of software. What any piece of
            software should do is meet your own requirements.

            This is another variation of the Apple ~ BMW argument
            where you can gut at least half of ther relevant BMW
            and not even notice.
      • by annodomini (544503) <lambda2000@yahoo.com> on Saturday May 03, 2008 @01:50PM (#23285268) Homepage
        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.
      • by morcego (260031) on Saturday May 03, 2008 @05:16PM (#23286468)
        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.
    • by 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: (Score:2, Informative)

      by glgraca (105308)
      This is simply false. The brazilian constitution exempts books, magazines, newspapers, and the paper they are printed on from all taxes. It's in article 150 (VI - d). If you buy books from abroad, you don't pay a centavo of import duties. This I can also attest to from personal experience.
    • by rbanffy (584143)
      All my books bought at Amazon have zero import tax. That's policy with book imports.

      I don know what Intel is doing wrong, but it must be something big. If Amazon books come through a loophole, it's a very big one.
  • by Infonaut (96956) <infonaut@gmail.com> on Saturday May 03, 2008 @12:59PM (#23284906) Homepage Journal

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

  • by supabeast! (84658) on Saturday May 03, 2008 @12:59PM (#23284916)
    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.
    • Re: (Score:3, Insightful)

      by 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)?

  • by Jane Q. Public (1010737) on Saturday May 03, 2008 @01:08PM (#23284988)
    Nothing in the article states anything like what the headline of the post does. That was just plain irresponsible sensationalism.
  • 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!
  • by Exp315 (851386) on Saturday May 03, 2008 @01:27PM (#23285132)
    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.
  • by SoTerrified (660807) on Saturday May 03, 2008 @01:31PM (#23285150)
    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 $200 US Dollars. It's not just a Microsoft issue.
    • by Flavio (12072)
      Software and printed material aren't subject to a customs tax, so this can't be it.
    • by Espectr0 (577637)
      The wii costs over 1200$ in Venezuela. Anything not made here costs a lot more. Stuff made here that isn't widely available (such as food) is very expensive too.
      The goverment just raised minimum wage 30%. And they think this won't race inflation.
      This problem is almost everywhere in latin america.
  • by Anonymous Coward on Saturday May 03, 2008 @01:32PM (#23285156)
    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 (Score:5, Informative)

    by iris-n (1276146) on Saturday May 03, 2008 @01:43PM (#23285236)
    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.
    • by rbanffy (584143)
      I doubt the prices MS practices are the government's fault. Their products are little boxes with CDs or DVDs inside that can be printed just about anywhere and cost a couple dollars each. Most of their OS sales are through the OEM channel and cost little compared to the boxes.

      If Microsoft wanted to keep prices low, they could.

      It's pure greed. And, since they can blame the government, they get away with it.
  • 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
    • The European Union Public License [europa.eu], which is similar to GPLv2 to my untrained eye, is available in lots of languages, including "Portuguese Portuguese" :-)
    • by rohan972 (880586)

      A country could pass legislation allowing companies to keep self-developed code proprietary even if it uses GPL code in a product. Protecting one's local companies and developing industries would be a higher priority than keeping the spirit of FOSS.

      Not any country that is signatory to the Berne Convention. The GPL doesn't create any restriction on distribution or modification, copyright does. The GPL grants certain rights if conditions are met.

      However, nothing other than this License grants you permiss

    • > A country could pass legislation allowing companies to keep self-developed code
      > proprietary even if it uses GPL code in a product.

      And another country could file a WTO complaint against them (assuming both are WTO members).
  • 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.

  • OK, so 7.8% of Brazil's Gross National Income goes to Microsoft? Brazil's GNI was $7500 per capita [unu.edu] in 2003. That means Microsoft makes about $600 per person. With 200 MILLION people in Brazil, that would be $120 BILLION in revenue from Brazil alone. Considering Microsoft's 2007 revenue was $60 billion - half of supposedly what Brazil sends to Microsoft - something's not adding up.

    Hyperbole, thy name is Slashdot!

  • The current Da Silva's government is supposed to do its work as promised (back when he and its folks were the opposition to the then current gov't) and do concrete pro-FOSS actions.

    Everyone who works at the gov't knows that there's absolutely no incentive to use FOSS (except by its own benefits). -- Really, zero. All until now has been rethoric.

    Things the gov't could do:

    - Tag (let's say) 80% of money the IT expenses (hw & sw) for exclusive use by FOSS-based solutions.
    - The money spent in propriet
  • I wish people would realize that FUD like this doesn't help the cause of Free software. It is much better in the long run to inform people of the truth and let them act based on that rather than using FUD to give yourself--and others--a false impression of superiority.
  • by redelm (54142) on Saturday May 03, 2008 @04:47PM (#23286296) Homepage
    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.

  • by nxsryan (1279864) on Saturday May 03, 2008 @04:53PM (#23286332)
    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.
    • Meanwhile, in -my- Ohio hometown, the public school system is fiscally doomed while still paying out enormous sums to Microsoft, IBM, Apple.

      I'm sincerely not trying to imply you're being politically apathetic, but have you actually tried to influence the town's school practices? You seem to be pretty good with words; citing examples of other countries that are adopting open source, the advantages of open source, and the like actually is the sort of thing that is liable to gather interest at a school board meeting. If you volunteered or offered a civilly discounted rate for helping to implement that sort of a system you'd be surprised at h

    • > I-wish- the government in the US cared enough about the GPL to have a licensing
      > controversy

      I don't. I prefer that the government take no interest in the GPL at all.
  • It already happened in the 1980s. Brazilian protectionism required imports to justify that a Brazilian alternative was not available. Because of this, there was a local production of MSX computers and a local reimplementation of Unix (SOX [wikipedia.org]). By the 1990s, they had figured that protectionism was harming local consumers of equipment more than promoting local production and that there were too many routine authorizations for imports.

    It seems that free trade was not accepted enough.
  • Had to read the summary twice. 20% of per capita business income. That would be not all income. Just the business income. To explain why that matters, let's take a hypothetical situation. All business income (assuming that income means profits) could be $1. They didn't say revenue... they said income. So if all businesses spend all the money they make on reinvestment in developing new business, salaries, etc, then they have very little profit left at the end. Now take that figure and divide by the p
  • by toby (759) *

    I have spent some time living in Brazil.

    1) there is no disdain for American things there (unfortunately). American franchises and products are widespread there, if not quite with the same stranglehold one sees in Mexico City, Australia, etc. American "culture" - TV and Hollywood - is swallowed up there quite readily, to great destructive effect as always.

    2) Windows is absolutely endemic in Brazil (and Russia and India, btw). The appalling statistics in the headline tell the story, I am not sure why the

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