MS Targets Linux, Pirates with New ‘XP Lite’

Microsoft has introduced a new version of Windows XP designed forcomputers sold in emerging markets — and analysts contend that is a signthat the Redmond, Washington-based software giant is worried about threats toits leading market position by Linux as well as to its bottom line by pirates.

Popularly known as “XP Lite,” the new stripped-down edition of theoperating system will begin appearing on PCs sold in Thailand, Malaysiaand Indonesia in October as part of a pilot program to introduce thesoftware to emerging markets, according to a statement by the softwaremaker.

Later this year, two more countries will be added to the pilot program, Microsoft said. Their names will be announced following final discussions with the governments and partners involved.

Digital Ecosystem

No pricing for the product was disclosed.

“Technology serves as a catalyzing force for economic and social changearound the world, but too many countries still lack basic digital skillsand access,” Microsoft Worldwide Public Sector Senior Vice PresidentMaggie Wilderotter said in a statement.

“By providing a technology solution that is low-cost, tailored andlocalized, and delivered in a manner that meets country-specific needs,we hope to create opportunities for more global communities to realizethe boundless social and economic potential of the digital ecosystem,”she added.

Worried About Linux

In addition to enhancing the digital ecosystem, analysts say Microsofthopes to stem the spread of Linux into developing markets, where pricesensitivity plays a crucial role in the buying decisions of computerconsumers. According to some industry reports, Windows XP PCs can sellfor as much as 20 percent more than Linux PCs.

“Microsoft realizes — unlike North America and Western Europe — theone-price-for-all pricing model isn’t going to fit in the Asian market,”Laura DiDio, a senior analyst with the Yankee Group in Boston toldLinuxInsider.

“If Microsoft wants to play in this market and not get co-opted byLinux, they’re going to have to slash prices and provide a costeffective, aggressively priced PC,” she maintained.

Get Them Young

She noted that Microsoft has augmented its Windows proselytizing effortsin the Asia-Pacific region by distributing free software in the publicschools. “They know that if you get them while they’re young, youusually keep them when they reach the workplace,” she said.

While pricing is a big consideration for new PC users, it isn’t anoverreaching one, contends Open Source Initiative (OSI) Vice PresidentRussell Nelson.

“It’s not about price,” he told LinuxInsider. “It’s about reducing therisks to your business by having the ability to make the code do whatyou want it to do.”

Seducing Buccaneers

Linux isn’t Microsoft’s only problem in developing markets, which have areputation for being hotbeds of software piracy.

“Microsoft’s strategy with XP Lite is to bring people — who may otherwisebe pirating software and creating an illegal installed base of XP andother software — into the fold by lowering the price point,” AlexManfredi, in Miami, Florida, program director for global projectmanagement for research firm IDC told LinuxInsider.

“All our studies and surveys indicate that there is an inflexion pointin pricing where people begin to see the value in purchasing legalsoftware and all the benefits that come with it,” he said. “Microsoft isusing the carrot approach instead of the stick.”

Piracy Hurts Linux

Piracy doesn’t only hurt Microsoft; it hurts Linux as well, OSI’s Nelson maintained.

“All Linux users should be in Microsoft’s camp in this regard,” he said, adding, “The reason being that it will push the people who are price sensitiveinto the Linux camp.”

He argued that Linux users, who do not have to pay licensing fees,should encourage everyone to pay licensing fees to vendors who requirethem. “Why not?” he asked. “It’s good for us. It emphasizes the businessrisk of relying on a vendor for getting your software.”

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