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From Rob Weir <robw...@apache.org>
Subject Re: $21 million per day
Date Wed, 06 Feb 2013 20:42:54 GMT
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




> 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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