An article in New York Times yesterday indicated Microsoft's next step towards globalization and maintain a dominant position in operating system and office software. Microsoft plans to offer a stripped down version of Windows XP and Office 2007 for $3 per copy. This is a very aggressive move by Microsoft in fulfilling its ambition to dominate the developing nations. While official press indicates that this policy is not a reponse to piracy issues, the "stripping down" is a clear signal that Microsoft is worried about piracy. Creating a stripped down version would actually increase the development cost of such software and would not be sensible if Microsoft did not need to prevent arbitrage or piracy issues.
The challenge for Microsoft's ambition would be whether finding hardware partners to provide low cost packages is successful. One Laptop per Child already plans to introduce machines @ $150 while offering Linux, it would be vital for Microsoft to find partners to offer similar range machines or at lower prices. Furthermore, Microsoft has yet created a network effect in these developing nations, the $3 OS, while inexpensive to developed nations, would be no contest to the free open Linux.
If and when this product is available to the developing nations, I think Microsoft should also offer the product to underprivileged children and underfunded schools to help realized the potentials of these children.
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Microsoft's offering a $3 version of Windows?
That's one way to build network effects and increase lock-in for Microsoft's products in third world countries.
I guess I will still have to pay $300+ for Microsoft Windows and Office.
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