The Bloor Perspective: Spam tax, Microsoft licensing twist and the weakening greenback

Email has today become one of the standard tools utilised by businesses and individuals. As a communications technology email has much going for it, especially the capability to deliver copies of the same information to multiple people at the click of a mouse. Alas this very facility also allows one of the banes of the internet - spam. There are very few email users that do not receive unsolicited messages. A minority of spam may be of genuine interest but it is not unusual for the vast majority to offer pornographic services, dubious medical treatments or to be entirely fraudulent in nature. In a hearing in the US Senate last week, Democrat Mark Dayton proposed that every email sent attract a 'small charge'. The suggestion follows the Computer Owners' Bill of Rights which proposed setting up an anti-spam registry. Recognising that the spam problem transcends national boundaries, another Senator proposed the creation of an 'International Spam Treaty' to combat the problem.

There is no doubt that dealing with unsolicited email costs both time and money. Some guesstimates suggest it will cost businesses in excesses of $10bn this year. This is clearly an issue worthy of balanced debate. The idea behind the spam tax is to place far more of the economic burden onto the initiator of the traffic. At the moment it is extremely cheap to send out millions of messages. Nearly all of the cost of dealing with spam currently rests with the recipient and the ISPs.

The addition of a small charge to each message would have only a marginal effect on the vast majority of users. However, a tax levied at a rate of only a dollar, euro or pound per thousand mails could seriously discommode those behind spam. Such a tax would undoubtedly generate charges of 'censorship' from some of an unrealistically liberal mindset but many ordinary email users would pay happily to remove the existing scourge of spam. A far more interesting question is where should any tax revenues generated be spent? Currently there exists no enforceable mechanism to collect an email tax and there is little chance of anything effective occurring to limit spam until nations, businesses and individuals across the globe get together to force action. Spam is not a matter of philosophical freedom. In this respect the internet should be no different from the rest of the world where all 'freedoms' - be they commercial, civil or personal - are 'freedoms' subject to some form of regulation. The web is still young but maturity demands responsibility. Taxation, monitoring and legal action may all have a role to play.

*Microsoft - progress with licensing*

Microsoft has long been criticised for its licensing policies. One has only to consider the recent launch of its Software Assurance Programs. Last week, however, came news of some unexpected developments in these programmes as the Seattle giant unveiled new flexibility in its licensing. Microsoft has provided a means for organisations to spread costs for software through annual payments rather than up front purchase. The new offerings will also continue to provide new releases of software as they become available. It is in the new 'Home Use Program' that Microsoft has taken perhaps the most unexpected steps. Put simply, this programme enables employees of organisations with Software Assurance contracts to get a fully licensed copy of Microsoft software to install and use on a home computer. The software covered by Home Use includes Word, Excel, PowerPoint, Access, FrontPage, Office, Visio, InfoPath and Project. This is a very good decision by Microsoft and is to be applauded. It is certain to appeal to many users who often work at home, often with considerably out of date tools. The Microsoft Employee Purchase Program will offer 'significant' discounts off the retail prices of many of the company's productivity and consumer applications. This will also be good news for many as the costs associated with software can easily exceed the cost of buying the hardware for a modern desktop. The potential market for many of its offerings has been contracting as its user base has expanded. These new programmes just might lead to companies and individuals installing yet more licences to enable home working. This may be good for business as a whole but is bound to lead to employees putting in yet more hours. It is clear from these developments that Microsoft has listened to the voices of its user community, analysts and the media. The new elasticity for customers that these announcements bring is certain to find favour and, more importantly, be exploited. Those who believe that all software should be freely available will continue to berate Microsoft but its core customers will be happier now than they were previously. If Microsoft would now take a look at its policy on 'Cals' some people might even start smiling.

*What about the Benjamins?*

We are all aware that the US dollar (US$) recently declined to a four-year low against the euro. Perhaps it is more accurate to state that the US$ has retreated from its previous overvaluation. More importantly, many experts suggest that it will not recover its strength for a long time to come. So the euro grows stronger. The UK pound (UK£) sits somewhere in the middle but still moves more in sympathy with the US$ than with the euro, though we are advised that the economies of euro-land and the UK are converging. The most apparent effect should be more exports of US technology to Europe. It should all be cheaper, more cost justifiable - another contributing factor to a loosening of pent-up IT budgets. This should stimulate innovation and production in the US. Life becomes more difficult for European IT product and service suppliers. The costs of their products and services rise. Of course, US enterprises which maintain establishments in Europe for service, marketing and distribution purposes, will see some incremental additions to their local cost bases. If the US$ does not recover its strength for some time, we should see some reforms in the structures of the European labour markets, which are as substantial an impediment to the IT industry as they are to any other sector. Prolonged US$ dollar competitiveness will lead to further consolidation of the IT industry in Europe through mergers and acquisitions. The alternative does not really bear contemplation. The challenges of social and labour reforms in Europe are so daunting that even more of the IT industry could move to cheaper locations for manufacturing and service support. However, political expediency may encourage some European governments to subsidise and provide greater protection to their local industries. A weaker US$ will further diminish opportunities for trade liberalisation as governments, faced with higher national unemployment through a more competitive US$, will seek to protect domestic enterprises. The irony of all this is that the US will not suffer from a weak US$. The US economy is more flexible and uninhibited by the regulations in the European economies. It is equipped to handle the sharp volatility of its currency.

Bloor Research is a leading independent analyst organisation in Europe. You can find out more at www.bloor-research.com or by emailing mail@bloor-research.com.