Earlier this month, the software maker announced plans to ship the Starter Edition -- a cheap, localised, stripped-down version of its standard WinXP operating system -- in developing Asian markets like Thailand, Indonesia and Malaysia by October.
After the move was announced, research firm Gartner issued a strongly worded statement and rebuked Microsoft for the product's many impairments, such as the restriction on running only three applications at any one time.
"Microsoft could have made a big difference with this product, but is more likely to be seen as pushing the upgrade path and frustrating users rather than delivering the value that this product is capable of, due to unnecessary limitations," said Dion Wiggins, Gartner's vice president and research director.
As a result, Wiggins added, end users will invariably turn to bootleg copies of the standard WinXP, which will lead to higher piracy rates in these developing countries. Gartner further advised users to "steer clear" of the Starter Edition until the kinks have been fixed.
In spite of this harsh warning, Microsoft's cut-price Windows will likely prove to be a winning move, simply because the firm has nothing much to lose from this experiment.
Yes, the Starter Edition has its limitations, but the restrictions are aimed at differentiating this product from the full WinXP. If the Starter Edition is improved, it gives users little reason to cough out 10 times more for a legitimate copy of Windows XP Home Edition. The Starter Edition must be good enough for novice users, yet "bad" enough to avoid cannibalising its flagship Windows revenue stream. It's a hard balance to strike, but Microsoft appears to have done its homework, having conducted a year-long study on the usage patterns of 1,000 first-time computer users in Thailand.
Secondly, I don't think Microsoft expects the Starter Edition to fly off the shelves in computer stores. It is not meant to be a runaway commercial success, and it will not miraculously persuade users to switch to licensed copies of Windows. At this point, the product is only bundled with cheap computers from government-backed schemes in Southeast Asia.
With this in mind, Starter Edition serves more to counter the competition from Linux desktop alternatives, which are currently offered as options in the "People's PC" projects in Thailand and Malaysia.
On the other hand, the cut-price Windows package allows Microsoft to salvage sales it would have otherwise lost to piracy anyway. Piracy rates in Thailand, Indonesia and Malaysia are well over 60 percent and counterfeit copies of Windows software are readily available. The problem could only be worsened by the spike in computer sales from these budget PC projects, and the Starter Edition could mitigate against further damages. Should a user decide to install a bootleg copy of Windows XP Professional Edition a day after splashing on his low-cost PC, he would have already paid for the Starter Edition at the point of computer purchase.
"This is profit they [Microsoft] wouldn't have normally made," Martin Gilliland, principal analyst with Gartner Asia-Pacific, said in a previous interview.
In addition, the firm has made it less appealing for pirates to prey on the cheap Windows version and export it to other countries by releasing it in selected native languages -- Thai, Bahasa Melayu and Bahasa Indonesia -- only.
Lastly and perhaps most importantly, I view the Starter Edition as somewhat of a conciliatory gesture towards regional governments, following years of see-saw debates on how to curb the piracy plague.
Authorities in markets like Malaysia and Thailand have long been targets of criticism by the US and intellectual property organisations for their lax stance on piracy. In retaliation, these governments often blamed software makers like Microsoft for fuelling the problem by refusing to loosen their pricing grip. The Starter Edition helps to appease this dissent, and gives the firm inroads into government projects it would normally have been priced out of.
In the long run however, the usability of cheaper Linux desktops will continue to improve. There will come a point when familiarity and interoperability become less compelling reasons to stick with the Windows interface. In the meantime, Microsoft can still maintain its universal stranglehold on its standard WinXP pricing, but the question is how long before the next horn sounds for further price concessions?
Talkback
I can agree with the author. Windows XP Starter Edition may find the places in some Asian countries. I'll keep watching this experiment.
Another pathetic attempt by Microsoft to rake in as much money as possible and try to keep their monopoly. And, typical of Microsoft: Create Bloatware, then Restrict.
My regular operating system is Linux, but I keep a small partition on my HD for windows, for those occasional programs for which there is no alternative in Linux. (f.i. CallServe). To run only three programs at the time is more than enough for me in Windows (anitvirus, firewall and the working application). Presently I use Windows 98 from my old computer, but Win XPSE would be a reasonable upgrade. Full Win XP is simply too expensive. When would it be universally available? If ever..