Will Cheaper Software Ease Piracy?

REDMOND, WASHINGTON -- Aiming to foil the advent of Linux and attack software piracy in emerging markets, Microsoft plans to expand its cheap Windows XP Starter Edition offer to more countries, a company executive says.

Windows XP Starter Edition is a version of the operating system designed for a specific market that is easy to use, support and sell, says Will Poole, senior vice president of Microsoft's Windows Client group. He made the comments at the company's annual financial analyst meeting here this week.

Luring New Users

Microsoft is already working with governments in Thailand, Malaysia, and Indonesia to offer the version of Windows, which has a "lower price appropriate for the emerging market needs," Poole says. While the Starter Edition is still a pilot project, Microsoft plans to offer the software in other countries as well, he adds.

Microsoft has identified emerging markets as a major sales opportunity partly few PCs have yet been sold there. In the U.S., about 60 percent of households have a PC; in Western Europe, about 30 percent; but in India the figure is below 2 percent. Russia and China are below 5 percent, and Brazil is at about 10 percent, Poole says, citing IDC figures.

However, software piracy is rife in the same emerging markets. Microsoft estimates that 92 percent of the PCs sold in China run unlicensed, pirated copies of Windows. That compares to 22 percent in the U.S., Poole says. Also, competition from open-source products, specifically Linux, is strong in the emerging markets.

Office Options

Windows is not the only group seeking to conquer emerging markets. Microsoft's Office group is also working to win more customers in those countries through "tailored and market specific offerings," says Steven Sinofsky, a senior vice president in Microsoft's Office group. In China, for example, Office includes an English writing assistant, he notes.

Microsoft has generally stuck to a system where its products are priced the same around the world, but has recently reconsidered its unified pricing. Windows XP Starter Edition is part of that approach.

Microsoft has shared few specifications of the Windows XP Starter Edition, but company executives have said it is not a stripped- down version of Windows, but instead a tailored version in local languages.

As part of the Malaysian program, for example, Microsoft offers a localized and specific Windows XP Home Bahasa Melayu version. The software bundle for the cheap PCs also includes the English version of Works Suite, the vendor has said.