Linked by Thom Holwerda on Mon 13th Sep 2010 20:57 UTC
Microsoft Who said a public outcry - even if it's just on the internet - never helped anyone? Yesterday, we reported on The New York Times' findings that Microsoft lawyers were taking part in raids on opposition groups in Russia. Today, Microsoft has announced a number of steps to fix the situation - the most significant of which is a unilateral software license extended to all NGOs in Russia and several other countries.
Permalink for comment 440854
To read all comments associated with this story, please click here.
google_ninja
Member since:
2006-02-05

I've seen you make that argument before lemur. You really don't understand the economics of software, or at least selling software in a productized model.

The average developer in the states makes about 75k/yr. MS tends to pay above average, you are probably talking 95-100k/yr. According to this blog, http://blogs.msdn.com/b/e7/archive/2008/08/18/windows_5f00_7_5f00_t..., there are about 23 main product teams for windows. An average software team is about 8-10 people (more then that gets fairly unwieldy). 10x23 = 230 devs at 100k is 23 000 000 big ones. MS also has a policy of hiring developers as testers, and at least tries to have 1.5 tester for each dev on a team. Testers are more like 80k, but we are still talking 345 people, which is 27 600 000. So just in developers and testers, we are talking 50.6m per year in manpower. Win7 was about 3.5 years in development, so we are talking 177.1m, as a rough estimate, in devs + testers.

Now thats a big number, but nothing compared to all the people we aren't counting. Managers (of which MS has _many_), designers, accountants, marketing folks, marketing campaigns, sales people, HR, IT people, and everything else you would expect from a big company. We are still just talking about people,we haven't even talked about the 8 billion per year they spend in R&D. MS has sold 160m copies of windows 7 so far, the vast majority of them being OEM home premium, which they probably get about 50-80$ for at the end of everything. That means that windows 7 could cover about 1 year of R&D for the company. And windows 7 was one of their most successful ones so far. R&D isn't the only division that costs a lot but will never directly make money either, you have stuff like DevDiv that deliberately loses money on their software to bring in more developers, which in turn drives windows (and by extension, office) sales.

A windows release costs an absolutely stupid amount of money. I wouldn't be surprised if it took 100m sales just to break even. Saying that a copy of windows costs as much as the distribution costs shows a profound lack of understanding about how this industry works. You put down a huge amount up front, the only reason you would ever do it is because of the massive margins you can make up in distribution. When you factor in the real costs, you start to realize why the only software retail companies still around are extraordinarily large, or very very small. You need to be an MS or an Adobe or an AutoDesk for this stuff to even make sense. They all make loads of money, but they only do it by spending loads of money on the right things in the right ways.

Reply Parent Score: 5