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Software prices must get real

Seriously, when Microsoft tells me that Windows 7, its all-new, gee-whiz operating system launched last week, is priced at Rs 5,899 for a basic upgrade and Rs 11,799 for the full-service option, I have to suppress a giggle. N Madhavan explores.

india Updated: Oct 25, 2009 23:40 IST
N Madhavan

Seriously, when Microsoft tells me that Windows 7, its all-new, gee-whiz operating system launched last week, is priced at Rs 5,899 for a basic upgrade and Rs 11,799 for the full-service option, I have to suppress a giggle.

Because my mischievous friend decided to do some back-of-the-envelope calculation and tell me that for Rs 5,000, he can buy dozens of blank CDs in Nehru Place on which he could simply copy the new software.

Piracy is bad, but Microsoft has to deal with it. And that requires more than the occasional police raid in Nehru Place, a press release or two on the virtues of legal software and a couple of threat scenarios on how pirated software is unsafe for business.

As a person who makes a living out of writing content, I feel in solidarity with software writers and programmers. Intellectual property must be paid for and intellectual labour recognised and rewarded. But then, pragmatism also matters.

Consider the fact that a netbook (a mini-laptop that is the rage now) is priced as low as Rs 15,000 today. While I can conveniently argue that the real fun is no longer in the machine but in the software, it is difficult for me to think of someone buying a Rs 15,000 netbook and loading up an OS (just the basic platform with some applications) for Rs 11,000.

The Microsoft prices I mention are special discounts for emerging markets for India, so that makes it even more quirky.

I think the software industry needs to straddle pragmatism with its intent to profit. I draw an analogy with income-tax, in which the so-called Laffer’s Curve argument states that increases in income tax rates do not necessarily result in increased tax revenue. Both the incentive to earn or the tendency to comply with the law are often linked to rates perceived to be reasonable.

While billions of dollars and tens of thousands of person-hours of work are involved in the making of a software platform, its managers need to crack the right price option that raises toasts rather than smirks. Remember, the hacker and the pirate are as young and as smart as the programmers who write the cool stuff.