Microsoft gouging Brazilians for 20 percent of income

Microsoft pillages developing economies like Brazil with punitive pricing that stifles economic development. Is there any wonder that anti-Microsoft feeling is rife in Brazil?

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 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.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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