Microsoft marches on Moscow to do battle with Linux

Microsoft will release a low-price version of Windows in Russia by the end of the year, in an effort to wean Russian consumers off pirated software and Linux.

The software giant will also announce later this week that it will bring a version of Windows XP Starter Edition to a fourth Asian country -- after Malaysia, Indonesia and Thailand -- bringing the total number of countries in the programme to five, but they have not specified which country this will be, although they have said it will not be China. A likely candidate is Vietnam, where Internet cafes are popular and products like Mr. Yee's Windows 98 can be bought for $1 in the street.

Windows XP Starter Edition is Microsoft's attempt to gain more customers in the developing nations, the fastest growing markets in the world. The OS differs from regular Windows in a number of respects. For example, users can run only three programs on the operating system at once and home networking has been deleted.

It is also only available preloaded on authorised PCs: Microsoft does not sell the software separately in stores.

On the other hand, it costs far less than regular Windows. Starter Edition costs about $36, according to sources, less than the $70 or more PC makers pay for Windows XP. The OS also comes with a tutorial CD and localised content to help first-time users.

The low price allows Microsoft to better compete against Linux desktops, executives have said. Because Starter Edition customers can get patches and updates, Microsoft hopes that PCs loaded with the OS will be more attractive than PCs with pirated software.

Russia -- along with Brazil, India and China -- has emerged as one of the prime opportunities for high-tech companies. One Intel executive said Russia and China will likely be two of the company's fastest-growing markets over the next few years.

The country has also begun to promote itself as a centre for technology development and outsourcing. Notable tech successes from Russia include antivirus specialist Kaspersky Labs and Sea Launch, a Russian-Ukrainian-Norwegian-US joint venture that launches rockets from a platform on the equator for commercial satellite deployment. Several venture capitalists have begun to place investments in the country.

At the same time, piracy is fairly extensive in Russia. A study released by the Business Software Alliance and IDC in July said 97 percent of the software in Russia is pirated, a figure bested only by China, Vietnam, Ukraine and Indonesia. Critics, however, often assert that BSA figures tend to be on the high side.

In the past 18 months, Microsoft has dedicated more and more efforts toward wooing customers in the developing world. The company, for instance, permits schools in 67 countries to obtain Microsoft Office for a few dollars and a free upgrade to Windows XP on donated computers. Intel, AMD, Hewlett-Packard and others have similar programmes for emerging nations.

The Starter Edition for Russia will come out by the end of the year, said a Microsoft representative. A full-fledged Russian version of Windows already exists.