Microsoft Windows is currently the best known and most used Operating System in the world. Microsoft is one of the strongest companies in the world and gains more and more power in more and more markets. One part of the world, China, is a pretty new market, but most Chinese people use pirated software.
Most companies would try to prevent this, but Microsoft has now decided that piracy in this country isn't so bad. As the products are pirated, the market share of products is also increased, and in the end this will only benefit the company.
The argument for allowing piracy boils down to two words: network effects. Without a critical mass of users, most software products tend to wither and die. Conversely, the more users a software product acquires, particularly a consumer-oriented software product, the more valuable it becomes. This is especially true for operating systems, which require significant third-party support from application developers to stave off obsolescence. In fact, it was Microsoft's overwhelming dominance of the P.C. software marketplace in the mid-1990s that forced many economists to reexamine the issue of software pricing. |
Starting with a 1994 paper by Amherst researcher Lisa N. Takeyama, economists and policy researchers began advancing the argument that having a large illegal user base might actually boost vendor profitability. In a 1999 paper titled "A Strategic Approach to Software Protection" economists Oz Shy and Jacques Thisse examined instances in which companies faced with certain duopolistic market settings dropped software protection as a marketing strategy and benefited from the decision.
It's indeed true, if software is popular amongst pirates it will probably also be popular with people who actually buy software, and if people get used to the interface of the software it's not likely they'll switch. Read the entire story here.
Source: Salon.com
