Microsoft gouging Brazilians for 20 percent of income

Ever wonder why Brazil and other BRIC countries are so hot on open source, including Linux? Gustavo Duarte gives several reasons, not the least of which is the punitive pricing that Microsoft inflicts on these developing markets.

In the case of Brazil, Microsoft pillages businesses to the tune of 20.1 percent and consumers at a 7.8 percent clip. Some people pay tithing to their church; Brazilians are asked to pay a tithe to Microsoft. Perhaps this is indicative of Microsoft's self-important belief?

Microsoft licensing as a percentage of Brazil Gross National Income

(Credit: Gustavo Duarte)

Sounds, bad, right? Well, it's particularly pernicious when you take into account how this compares to Microsoft's pricing in other markets:

You might be surprised to learn that Microsoft licenses are nearly twice as expensive in Brazil in absolute terms....As a proportion of national incomes, business licenses are nineteen times more expensive to Brazilian society and home licenses are fifteen times more expensive....If there's any hope of widespread computer access, then surely we can't expect families to spend 7.8% of their annual income on Microsoft software licenses alone.

But Brazil's affection for open source isn't purely about money. It's also a cultural backlash based on three issues, according to Duarte: 1) Utter disregard for copyright, 2) strong anti-Microsoft feelings, and 3) Linux alpha geek monopoly.

In line with Duarte's observation, I'd also suggest another reason: A desire to keep Brazilian Reals in Brazil, rather than shipping dollars back to the United States. Part of this stems from Brazil's healthy distaste for the United States, but part of it is also just a realization that it's difficult to impossible to build a thriving software business on the foundation of someone else's software [PDF].

As I recently argued in Moscow, open source enables economies to develop and flourish on their own terms, not Microsoft's, Oracle's, etc. Brazil should not be spending 20 percent of its business income on Microsoft. Doing so cripples its ability to invest at home.

This is the promise of open source: Healthy economic development. Not on Microsoft's terms, but rather on Brazil's. And Argentina's. And Russia's. And so on.

The open-source movement's progress in Brazil and other BRIC countries hasn't been perfect, and there are some signs that its momentum has slowed in Brazil, in particular, but it's a far better bet than proprietary software designed to keep the profits and control in the United States.

[blackvine]

the same is true in Africa so much that Piracy is rife on the continent

[Noah Clements]

Do you know what the per capita spending on Microsoft windows and office is in Brazil? Or do you contend that every man, woman, and child in Brazil has a copy of each? That would be a real information economy!

As hard as it is to believe, income inequality is much greater in Brazil than it is in the US (which is getting historically high). I do not claim any particular knowledge, but I would be willing to bet that Microsoft is trying to sell only to those Brazilians with money - you know, the ones that can afford computers.