Microsoft Investigating Extent Of Abuse In Software Sales System

from the how-will-this-play-out dept

Following the news from a last week about the Microsoft employee who stole $9 million worth of software, Microsoft says they’re investigating others who may have abused the system. This article also has more details on the accounting of how they came up with the $9 million number, saying that many of the products sold retailed for over $20,000. What I’m wondering is how many of these $20,000 products he actually sold. If you’re going to spend $20,000 on a software product, I would think you’d make sure it was an authorized reseller or some sort, and not some random guy. The article also points out that none of these products had an actual cost of goods sold of more than $1,000 (which triggers an alert saying the boss has to approve the sale), giving you some idea of the markup margins that Microsoft puts on its products. It certainly seems worth questioning the $9 million claim, which is sounding more and more like Hollywood’s claims of the “billions” lost to online file sharing.

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Comments on “Microsoft Investigating Extent Of Abuse In Software Sales System”

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Mark Fox says:

High markups

Given that the only phyiscal cost of a software produce is a few cds or dvds and some manuals I would be surprised that anything MS sells has a phyiscal production cost of over $1000. The actual cost would include the development costs, which is not included in this figure. The value of the software is what people pay for it. Since the company that bought the software resold it, it clearly has a value.

Oliver Wendell Jones (profile) says:

Re: High markups

Got to love that legal math.

According to the original story he stole “more than 1600 pieces of software”. That means he stole somewhere between 1600 and 1649 pieces of software, as any more would have been “almost 1700 pieces”. So, for the sake of argument, let’s say it was 1649 pieces of software.

Later stories point out he only purchased software that was less than $1000 to avoid needing a supervisor’s signature. That means he stole a maximum of 1649 pieces with a maximum price of $999.99 each.

According to my calculator, that’s a maximum of 1,648,983.51, which is significantly less than the $9,000,000 in damages that MS is claiming.

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