Why Microsoft blows hot and cold on piracy

A few years ago, the music industry was hysterical over internet piracy – and of course, it still is. 
  (It’s DEVASTATING, according to the RIAA). 

Also a few years ago, Microsoft was giving various blasé interviews about how piracy wasn’t such a big issue for them. In fact, they were smugly “using it to their advantage”! 
You don’t hear so much of that any more. In fact, now it turns out that piracy in China is killing US jobs!

Why the dramatic change in opinion?

Software of the type that Microsoft sells tends to have the feature that it becomes more valuable as more people use it. Perhaps even more importantly, it takes time and effort to learn how to use software. So once you’ve learnt how to use Microsoft Word or Excel, it takes time and effort if you decide to switch to another word or spreadsheet processor.   

From Microsoft’s point of view, making sure that an individual’s first few experiences on a PC are of using Microsoft products means that there’s a good chance they’ll go on to choose to use Microsoft products in the future.

So how do you ensure that this happens – particularly in a developing country where people might not (at least initially) have much disposable income? Lowering prices so that your products become more affordable is likely to be one option – but allowing people to pirate the product might be much easier,  cheaper and profit-maximising in the long-run. Microsoft is even able to avoid the costs of distributing its products – instead this function is taken on by eager file-sharers.

Of course this can’t be allowed to go on forever – at some point, when people have been “locked-in” to using Microsoft products in the future, they need to be coerced into actually paying for it. My guess is the key has now turned. And so now begins the lobbying to shut down the piracy networks that initially worked very much to Microsoft’s advantage.

A cunning strategy indeed.

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