Back in the days when software was distributed on floppy disks (remember floppy disks?), the rule of thumb for Windows was one byte costs a dollar.
In other words, considering the cost of materials, the additional manufacturing time, the contribution to product weight, the cost of replacing materials that became defective after they left the factory (e.g., during shipping), after taking data compression into account, and so on, the incremental cost of adding another megabyte to the Windows product was around one million dollars, or about a dollar per byte.
This was a cute rule of thumb to have, because it let you put a (admittedly somewhat artificial) monetary value on code bloat. Was your feature even worth the disk space?
Of course, the advent of the CD as the primary distribution medium changed the mathematics, but there was still great concern over the size of the operating system. It is my understanding that the Windows Server 2003 CD was basically “full”. It may not look full to you, but remember that your CD is probably the 32-bit English version. Additional space needs to be reserved for translations into other languages, and don’t forget that the 64-bit edition of Windows is roughly twice as big as the 32-bit version, since it needs to contain two operating systems, the native 64-bit one and the emulated 32-bit one. (It’s not quite that bad, because some files can be shared, and many 32-bit components can be jettisoned.)
And then distribution media switched to DVDs, and now it’s entirely online. I wonder what the cost-per-byte is nowadays. The cost is now in bandwidth, but it still costs money.
Back in the heyday of the IBM 360 mainframe, it was a major breakthru when the cost of core memory (i.e. RAM) dropped below $1 a BIT (and that was in 1960s dollars)
A byte was a dollar? Sure; a dollar is eight bits!
The Windows 10 installer ISO, unmodified and with no extra languages, just barely fits on a single-layer DVD. What I find interesting is that the ISO size varies wildly depending on the language. The English US ISO for Windows 10 v1903 sits at 4.59GB. The English UK one sits at 4.60GB. Makes sense so far. But then the French Canadian ISO sits at 4.3GB. I would have expected non-English ISOs to always be larger, not smaller!
ISOs were downloaded from MSDN in May. Your number may vary.
Interesting, presumably there's some non-essential component dropped from the French Canadian version for some reason, maybe an instruction video or similar? At ~ 300 Mb, a few short video clips would explain it (and video would be harder to localise than most content; for US->UK you could just leave in in US English).
As for the current costs - somewhere between 2 and 25 cents per Gbyte depending on volume and area, so if we assume each byte of Raymond's code get downloaded at least a billion times (800m devices running Windows 10 per microsoft.com, but some come pre-installed, some...
Nowadays, rarely, it’s the required minimun size of the recovery usb stick that I (user) think about in terms of Window’s size… As in, “What are the chances any usb sticks in Dad’s desk are >= 16Gb?”.