Windows 7 for $3

It's Windows 7 week! On Thursday, Microsoft will roll out its latest operating system at an event in New York. Did you see this? Have you heard about this? Well, be informed -- it's happening!

But if you just can't wait a couple more days to get your hands on the Vista Slayer, there is a place where you can (sort of) get Windows 7 for about $3. As you might have guessed, that place is China, were software pirates have not only beaten Microsoft to the Windows 7 launch, they've also begun offering the new OS at a very competitive price.

Of course, it's not really Windows 7, but for $3, the fake version will likely sell pretty well in China. It might even get a few takers here in the U.S. And that costs Microsoft, partners and customers money. Even if your business doesn't reach Shanghai directly, the piracy taking place there is still lifting money out of your wallet -- and pretty directly, in some cases. (Remember, for one thing, that a lot of pirated Chinese software ends up in North America and Europe.)

For specifics on piracy's effect on the channel, re-read Scott Bekker's excellent RCP article from 2007 on Chinese software piracy. Piracy flits in and out of the news as authorities make arrests or Microsoft sues partners who are allegedly selling pirated software, but it's a problem that never really goes away.

The New York Times story linked above quotes IDC as saying that fake software accounted for 80 percent of all software sold in China last year (compared to about 20 percent in the U.S.). China is, of course, a huge market that's only getting bigger as the company develops technologically, so an 80-percent piracy rate is a massive challenge for vendors and U.S. and Chinese authorities alike.

And then there's this, also from the NYT story:

"Business Software Alliance, a trade association created by the software industry, said the sector had lost more than $6.6 billion in China last year to piracy."

Some of that $6.6 billion is yours, partners. With all the numbers being thrown around in bailouts and stimulus packages, a measly $6.6 billion might not have an immediate emotional impact, but it's roughly equal to about a tenth (or, actually, a bit more) of Microsoft's annual revenue for the past couple of years, which has been around $60 billion. So, it's a lot of money.

Things are getting better, though. Microsoft has dropped prices of its wares in China. Chinese authorities are actually starting to enforce anti-piracy laws that have existed for a while. Chinese courts are convicting pirates and putting them in jail.

And partners are looking out for each other -- and looking for signs of dodgy business at home and abroad. After all, a few partners have sided with the bad guys over the years, and there are very likely some out there that still do. So, keep your eye out for ridiculously low prices or markets that suddenly become hyper-competitive. And, if you think you've found a culprit, don't be afraid to take your concerns to Microsoft. Somebody there will likely listen if it's obvious that you're being serious and have some evidence to back up what you're saying.

Pirates might have beaten Microsoft to the Windows 7 punch, but they're slowly losing their grip on the software industry both in China and worldwide. It's up to all of us who abide by the law (yes, even journalists and bloggers) to stay vigilant and stay away from those $3 copies of Windows 7. They cost a lot more than that in the long run.

Have you had any experiences with piracy among your competitors or even within your own company? Tell your story at [email protected].

Posted by Lee Pender on October 20, 2009