Re: CFA: Microsoft overcharges consumers $10 billion in 3 years

[stan johnson <sjohnson@gwi.net>]

** Reply to note from simonc@jumper.org.uk Fri, 8 Jan 1999 20:31:06   
-0500 
> Actually, I'd say the reason for the number of M$ programmers that 
> are millionaires, and why BillG has tens of billions of dollars of 
> personal wealth is because of the stocks that each programmer is 
> given. Over time, these turn into quite a reasonable sum of money. 
 
And of course they *start out* worth quite a bit of money. The   
compensation of programmers (or anyone else) is not necessarily   
limited to a dollar 'salary'. (The value of the stocks rests in part on the   
realization that the profits of the corporation will remain high and,   
probably, grow.) 
 
Granted that the money poured into M$ stock by speculators is a real   
contribution. I've no data on the relative magnitudes, and haven't   
enough interest to try to dig it out.  
 
Regardless of the stock-option factor, whatever its magnitude, the   
fact that the cost to the OEM and the consumer of the *USE* of the   
code, which has a near-zero marginal cost, is approaching the cost of   
the precision-manufactured hardware, which requires use of what I'm   
sure is expensive tooling and machinery, displays the disproportionate   
division of the retail dollar.  
 
The profit margin is obscene. The price and the profit margin are *not*   
constrained by competition, because for all practical purposes,   
competition is ruled out by contract and unrefusable offers.  
 
The internal M$ memo discussing pulling features out of the shipping   
code so that the price of the software can be kept in line with   
hardware, with extortion of more money direct from the enduser (to   
restore full features, after the purchase of the pc with preloaded code)   
is a direct and explicit statement of the disproportionate price charged   
for use of the code.  
 
 


-- 
Stan Johnson    TeamOS/2
sjohnson@gwi.net