TELECOM Digest OnLine - Sorted: Re: Jail For 'Robin Hoods' Who Cost Microsoft Millions

Re: Jail For 'Robin Hoods' Who Cost Microsoft Millions

Henry E Schaffer (
Sun, 15 May 2005 19:04:50 +0000 (UTC)

In article <>, Lisa Minter
<> wrote:

> Robin Hood, according to legend, took from the rich and gave to
> the poor. Microsoft has been particularly hard hit from this,
> and has decided to strike back.


The description given always says things like "The cost of their
activities run into very many millions in lost profit ... the losses
are incalculable,"

This is usually (always?) calculated by taking the list price of the
software, multiplying it by the maximum estimate of the total number
of copies that might have been distributed illegally and publishing
the result.

Of course, this usually (always?) seriously overstates the loss. The
estimate of the number of copies is usually taken as the top it might
have been -- i.e. the number distributed is usually considerably
lower. Furthermore, a lot of the copies distributed aren't used.
Additionally, even if it is used -- it shouldn't count unless the
person would have bought the software absent the illegal copy. (There
is *no* lost profit in a teenager's illegal CDROM copy of an expensive
piece of commercial software -- if the teen couldn't have afforded to
purchase that software.)

The overstatement of the loss continues with the use of the list price
of the software, because software is usually sold at a discount from
list. So to be honest (this isn't a consideration when one is trying
to get a lot of PR :-) the minimum sales price (or perhaps even the
average) should be used.


--henry schaffer hes _AT_ ncsu _DOT_ edu

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