Microsoft submitted 500,000 takedown requests to Google over the past month related to copyright infringement and software piracy.
Extrapolating that for a whole year - assuming half a million takedown requests a month - that would be six million websites attempting to illegally distribute Microsoft operating systems or applications. And, those are just the ones that are identified. Who knows how many slip through the cracks or fly under the radar?
Windows is by far the dominant operating system in use around the world, and the Microsoft Office suite has a virtual monopoly on the productivity software market. A good chunk of the Windows and Office software in use is pirated, though.
Microsoft has even had issues with unethical use of its software by paying customers. It recently reduced the number of licences available for TechNet subscribers to minimise the chances of piracy.
When it comes to piracy there always seems to be some segment of the population that justifies theft of content based on its cost or availability. For example, with movie piracy the rationale seems to be that if a studio would make a movie available online at a reasonable price people wouldn't need to download rogue pirated copies.
I assume the same argument could be made about Microsoft software. Purchasing an upgrade for Mac OS X only costs about $30, but the upgrade from one version of the Windows operating system to the next can cost up to $200 depending on which flavor of Windows you upgrade to. The Microsoft Office suite starts at $120 and doesn't even offer any upgrade pricing discount.
In my opinion it's a very weak rationalisation to claim that piracy is somehow justified by the cost of a product. Whether it costs $5 or $500 theft is theft. There are plenty of free alternatives for those who can't afford the Microsoft software or simply choose not to spend the money.
But, just playing devil's advocate, it's possible that Microsoft could curb or minimise piracy by pricing the software at a more reasonable point that is more accessible to users with limited budgets. There has to be some point that strikes a balance between the amount of money Microsoft loses due to piracy and the amount of revenue Microsoft could gain by boosting sales with lower prices.
On the other hand, Microsoft just reported record quarterly revenue, so perhaps it's doing just fine despite the rampant piracy. Microsoft could lower its pricing and possibly raise revenue even higher, or it can just continue sending half a million takedown requests per month to Google.