Picture Bill Gates or any other senior Microsoft exec holding forth in a keynote about the limitless possibilities of ever-faster hardware, ever more powerful software. Then cut to this week's Windows XP Starter Edition announcement and read "users can have up to three programs and three windows per program running concurrently. Further simplification of the operating system includes the display resolution set to 800x600 maximum and no support for PC-to-PC home networking, sharing printers across a network or more advanced features such as the ability to establish multiple user accounts on a single PC."
It's cheap, it's crippled, and if it's a bid to convert Asian PC users from pirate copies of Windows, it's surely futile. Microsoft announced Starter Edition as a five country, one year pilot to be tried out in Thailand, Malaysia and Indonesia, and two more that have yet to be announced. It's essentially a localised version with much of the useful stuff in XP pre-broken, and it will probably cost around $30. This is clearly a lot less than the full price version, but a lot more than the pirate version, or the free pirate version you borrowed from a friend. From the point of view of the cash-strapped individual user with ambitions beyond their budget it isn't an attractive prospect, nor does it significantly reduce the overall entry cost to IT; $500 for a PC may not seem too much in the developed world, but elsewhere it's unattainable.
The pilot programme however has other, less obvious objectives. Starter Edition was first thought up in response to Thailand's government-initiated Linux PC project. Microsoft's initial refusal to play ball on pricing was swiftly replaced, when faced with the prospect of a million PCs running Linux, by the 'flexible' approach that has produced Starter Edition. Microsoft didn't make a whole bunch of money out of full price Windows in the area, Microsoft won't (immediately) make a whole bunch of money out of Starter Edition either, but Linux has been stopped, so Redmond can call that a result.
Note also, however, that Microsoft's announcement quotes the Thai ICT minister as saying: "Microsoft Windows XP Starter Edition demonstrates Microsoft's commitment to collaborate with the Thai government to provide significant benefits for our citizens and their future," and that Microsoft itself comments: "In addition to the social benefits of digital inclusion, Windows XP Starter Edition also creates economic opportunities for system builders and ISVs that are partnering with local governments to deliver a tailored and localized solution built on the Windows platform."
What is happening here is that Microsoft is trying, successfully, to strike deals with governments and using these deals as leverage with local system builders who want/have government contracts. From the point of view of the system builder it is probably of no great moment whether a box aimed at the general market has an operating system that stinks, Linux, or no operating system on it, but if the government strikes a deal with MS that requires the operating system that stinks, well, that's what the system builder ships, and it takes a step towards legitimacy as it does so.
Previous attempts to sell Windows crippleware to general consumers failed locally, we understand, because the consumers simply got hold of a pirate copy of Windows and installed it instead. This will also likely be the situation with the latest effort where the users can get away with it. Government employees, however, are unlikely to be able to get away with it, so if government needs more powerful features than are available in Starter Edition, then government will have to pay for them. Similarly, as Microsoft builds relationships with the local system builders it will become less and less feasible for businesses to get away with running pirate software. They'll be offered special upgrade deals to full versions, pulling them further into the 'ecosystem' too, and you can see clear parallels with the way Microsoft's sales efforts have progressed in the developed world.
The plan, therefore, is not to eradicate piracy in consumer markets, but to fuel the development of a 'legitimate' market in government and business while throttling any prospect of open source developing its own markets in the area. Government and business will, as in the developed world, pay a goodly price to Microsoft for its software, while Microsoft will be able to increase the number of PCs that ship with its software (any software will do) and hence yield it the Microsoft tax. The actual entry price paid by government isn't (as in the developed world) particularly relevant, so long as it enters) and whatever the end user shoves on the machine isn't anything like as important as it is for Microsoft to pick up the rent from them as part of the machine's price (as, also, in the developed world). ®