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From Rob Weir <robw...@apache.org>
Subject Re: $21 million per day
Date Thu, 07 Feb 2013 12:13:43 GMT
On Thu, Feb 7, 2013 at 6:34 AM, Hans Zybura <hzybura@zybura.com> wrote:
>
>> -----Original Message-----
>> From: Rob Weir [mailto:robweir@apache.org]
>> Sent: Wednesday, February 06, 2013 9:43 PM
>> To: dev@openoffice.apache.org; marketing@openoffice.apache.org
>> Subject: Re: $21 million per day
>>
>> On Wed, Feb 6, 2013 at 8:43 AM, Rob Weir <robweir@apache.org> wrote:
>> > Yes, yes, we're a non-profit organization.  We don't charge for Apache
>> > OpenOffice.  We don't pay developers.    But we still do produce
>> > something of value, and that value can be estimated.
>> >
>> > People need office productivity software.  The main alternative to
>> > OpenOffice is Microsoft Office, perhaps the "Home and Student"
>> > edition.  The latest version (2013) sells for $139.99 on Amazon.  This
>> > is for the downloadable version.
>> >
>>
>> So I'm thinking more on this, and there is an assumption here that the price I
>> pay for Office in the US is the same as anyone else pays around the world.
>> But this is unlikely to be true.  This is a classic example of where the fixed
>> costs are in the development and are high, and the variable costs are in the
>> media and distribution and are very low.  So a global vendor's optimal
>> strategy is to adjust the pricing country-by-country or region-by-region, to
>> maximize their profits.
>> They can drop the prince in some countries and raise it in others based on
>> ability to pay.
>>
>> I'd love to have some help exploring the magnitude of these differences, to
>> see if they are significant.  Let's use the price Microsoft quotes for "Home
>> and Student 2013".  We want the 1PC perpetual license, not the per-year
>> subscription price.
>>
>> Start from here:  http://office.microsoft.com.  I had to then go to "Products",
>> "For Home" and "Learn more".
>>
>> When I check the US price I get $139.99
>>
>> When I check the German site (http://office.microsoft.com/de-de) I am
>> quoted 139,00 €.  That is $188.04 today.
>>
>> When I check the Australian website I am quoted $169.00 which is $174.42
>> USD.
>>
>> The Russian website quotes 3499.00 rubles, which is $116.30.
>>
>> So I'm seeing some higher and some lower.  Does anyone see pricing that is
>> outside of the range USD 116.30 - 188.04 ?
>>
>> This complicates the analysis, but I don't think it changes the story much.
>>
>> -Rob
>
> You can buy Microsoft products considerably below their "official" prices quoted on Microsoft's
web sites.
>
> On http://geizhals.de/eu/894430
> you can compare real market prices for different European languages in different countries
and from different vendors.
>
> Microsoft Office Home and Student (1 computer) sample best prices (VAT included, shipment
excluded) as of Feb. 7th
>
> Germany: 105,11 Euro
> Poland: 110,11 Euro = PLN 460
> Italy: 108,04 Euro
>
> Differences are mostly due to differences in VAT percentage, e.g. Germany 19%, Poland
23%.
>

Ah, good observation.  That would explain the difference in the US
price.  In the US most internet sales are free of sales tax.  And even
where there is tax it is not listed in the "sticker price", but is
added after.

-Rob

> Sample Amazon prices
> Amazon.de:  112,69 Euro
> Amazon.at: 112,69 Euro
> Amazon.it: 114,24 Euro
> Amazon.co.uk: £96.50 = 111,50 EUR
> surprisingly expensive
> Amazon.es: 127,35 Euro
> Amazon.fr: 129,90 Euro
>
> In general, the real market price in European countries seems to be mostly in the range
of 110,00 Euro to 115,00 Euro
>
> Hans
>
>>
>>
>>
>>
>> > We have averaged 153K downloads per day of Apace OpenOffice over the
>> > last week.  That is an average value to the public of $21.5 million
>> > per day.  Or $7.833 billion (7.833 thousand million) per year.
>> >
>> > To put that in perspective, here are comparable annual sales figures
>> > for some familiar companies:
>> >
>> > -- Campbell Soup Company:  $7.882 billion
>> > -- Royal Caribbean Cruises:   $7.657 billion
>> > -- Mastercard, Inc:                $7.391 billion
>> > -- OfficeMax:                        $7.094 billion
>> >
>> >
>> > So we're providing tremendous value to the public.  We should be proud
>> > of what we've accomplished over the past decade.
>> >
>> > Note:  We could certainly debate the exact value provided to users.
>> > Determining what a user would do if they did not get AOO for free is
>> > tricky.  But the logic above is similar to how the BSA estimates
>> > losses to Microsoft from software piracy.  They assume that the person
>> > who pirates Office would buy it if they did not pirate it.  So it
>> > seems fair to use that same logic to estimate the value provided to
>> > users by a legal free alternative like Apache OpenOffice.
>> >
>> > Regards,
>> >
>> > -Rob
>

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