Robert McLaws: Windows Edition

Blogging about Windows since before Vista became a bad word

Microsoft Introduces $3 Windows Bundle for Emerging Markets

Kudos to Microsoft for making the right move.

My good friend Jed Rose, former manager of the Windows Featured Communities team, came out of hiding a few minutes ago and told me a bit about the project he's been working on for the last 8 weeks. Today, Microsoft is announcing that, sometime in the second half of the year, they will be making Windows Vista XP Starter, Office 2007 Home and Student, Windows Live Mail Desktop, Microsoft Math 3.0, and Learning Essentials 2.0 available for a grand total of $3 USD. This won't be available for just anyone to buy, however. Governments would have to pay for at least part of the cost of computers from certain retailers, who would then pass the computers on to students.

The New York Times article had some great information:

There are about a billion PC users worldwide, mainly in developed nations. The initial goal of the Microsoft program, working with many industry partners, would be to add another billion PC users by 2015, Mr. Ayala said.


Software piracy is another pressing concern for Microsoft and other software companies in developing nations. Mr. Ayala acknowledged that piracy and the competition from Linux were business issues for Microsoft.

“But this isn’t really about responding to those things, but about finding an economically practical way to put good software and a good computer into these people’s hands and get them going in life,” Mr. Ayala said.

“Certainly,” he added, “for Microsoft this is an investment in the long term. These are the consumers of the future.”

No matter what happens with Microsoft’s effort in developing countries, it is not going to have much impact on the company’s financial performance anytime soon. Its annual sales are running at more than $45 billion a year.

“Microsoft is betting that at least some of the kids from developing nations will turn into buyers of more mainstream products later in life,” said Roger L. Kay, president of Endpoint Technologies Associates, a research firm. “The theory is that if you get them young, you can keep them for life.”

Ina fried of interviewed Will Poole, who had this to say:

"This is a new trend we are trying to embrace," Poole said. "We expect there will be some number of many tens if not single hundreds of thousands of PCs purchased under programs like this over the next 12 months."

Although Microsoft is aiming the PCs at students, it understands that they may get used more broadly by the families who get them.

"We're not going to tell them that the father cannot use it to look for job listings or the mom can't use it to look up health information," Poole said. "Of course it is going to be used however it is that it is used in the household, but the expectation is that it is for the student for education as the primary use."

Personally, I think this is an amazing thing. If Microsoft sees piracy as it's biggest competition, than this is their tried-and-true strategy of out-competing their competitors. Why would you buy an illegal copy for $1 in China when you could buy a legitimate copy for $3? Brilliant! Can you imagine the pitch meeting for this plan though? I bet several Microsoft VPs probably had to change their underwear after the meeting. That couldn't have been an easy pill to swallow.

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  • tf said:

    "Why would you buy an illegal copy for $1 in China when you could buy a legitimate copy for $3?"

    Conversely, why would you offer it for $3 unless others were selling it without your approval for $1?

    Or put another way: why has Microsoft spent millions and countless manhours trying to crackdown on pirating if it now concedes its "valuable IP" is only worth 3 dollars.

    April 19, 2007 4:14 AM
  • TF, that's a rather short-sighted way to look at it. You missed the point. Just because that's the price they're selling it at doesn't mean that's what it's worth. Microsoft is leveraging an asset (Windows R&D) to make a long-term investment in a HUGE untapped market. The first billion computer users have had a nearly immeasurable impact on the world, and Microsoft wants the second billion computer users to get to know the new, more genial side of the company. And children are more brand-loyal than adults.

    Besides that, the sale is limited to governments, and thusly they can control how it is distributed. It provides a low-cost alternative to get access to software legitimately, and practically eliminates the need for piracy in the first place.

    So Microsoft just created a huge subsidy for kids in need. So what are you complaining about, TF?

    April 19, 2007 4:40 AM
  • tf said:

    Please. I think you are the shortsighted one for proclaiming it a subsidy for the children.

    I'm not complaining: I'm simply preferring to look at it rationally. This is motivated solely to make another 3 billion in revenue.

    I question (but do not complain about) how they can rationalize their standard views on IP (1% royalty on server compatibility only in Europe is too little but they can markdown their core product 99.9% to the largest market in the world?). etc...

    April 19, 2007 6:17 AM
  • Where did you see it would be Vista mate? Only info I can find says XP.

    Cheers - EP

    April 19, 2007 7:43 AM
  • tf said:

    Robert, I would also add: this does ZERO to eliminate piracy. As you said this is tied to governement programs which are providing PCs to students in homes without PCs. (These aren't the people pirating software.) People who have PCs and are pirating are not eligible for this.

    Moreover, even if it was directed at piracy, I still do not see why I would pay $3 for less than what I can get for $1. (Crippled versions of MS only software) What these "pirates" can get for $1 is full versions of many apps.

    Even if this wasn't the case, why wouldn't they prefer to give the buck to the corner vendor rather than $3 to Microsoft, a 200+ Billion dollar company half way around the world?

    April 19, 2007 9:07 AM
  • Fernando said:

    It is fun to watch the ABM crowd reacting to this announcement:

    ABMers - "Piracy is rampant in the third world because greedy Micro$oft charges EXPENSIVE price to its useless software!"

    Microsoft - "Ok, we'll make it available for U$ 3."

    ABMers - "This does ZERO to eliminate piracy!!!"

    You can never please this folks...

    April 19, 2007 11:45 AM
  • tf said:

    Fernando, I have no problem with piracy or appropriate prices for software (I think MS's plethora of SKUs is nuts and the low end is not a good value but...)

    I don't blame MS for piracy nor do I think that MS software is the only thing being pirated.

    Maybe you should actually try to refute my claim rather than dismissing me as something you think I am.

    April 19, 2007 12:23 PM
  • Fernando said:

    tf, make a coherent argument and I'll be glad to refute it.

    April 19, 2007 1:19 PM
  • Matthew said:

    Discounted commercial software is a threat to fair trade in the labor market.  This “giveaway” and the continued discounts to the “emerging nations” in part is an effort to maintain and expand the pool of low cost offshore labor.  Far from a charitable act, it is a loosely disguised marketing program to preserve Microsoft’s dominant position. It does so in a manner that discriminates against the population of developed nations and tampers with fair trade and fair competition.   Where are the discounts for the poor in developed nations?  They don't exist and it's not an oversight.

    April 19, 2007 9:21 PM
  • April 20, 2007 1:23 AM
  • April 20, 2007 4:16 PM
  • Yuvi said:

    Having grown up on pirated copies of Windows and Office, and living in India, I can "REALLY" appreciate this. Here's an anectode.

    The Indian Government tried distributing free OpenOffice and Linux CDs a few years ago to everyone who has a telephone connection. Open Source. Problem being, they were worse than unusable. Heck, our school got around 30 of those CDs, and they never managed to get it to install. I was able to somehow get OpenOffice to install in a single PC, which was carefully avoided by everyone over here. They are just too unusable. And, this is a pretty high end school. So, the whole govt project flopped, and was swept under the rug.

    The percentage of people using computers is increasing around here, and ALL have pirated copies of every software they use. There are local "software people" to whom you give about $3 and they'll install whatever software you ask, mostly downloaded out off BitTorrent. This will curb them.

    If this sortof program was available when the Indian Govt started handing out those Linux CDs...

    April 24, 2007 2:03 AM
  • Yuvi said:

    P.S. Am I making sense?

    @Matthew: LOL! You don't understand things, do you? Come over here and live for a while buddy, and then you'll probably grok it...

    April 24, 2007 2:04 AM
  • Yao said:

    It's clearly about marketing, Yuvi. Who doesn't like cheaper things? I think it's a marketing effort to tap the market that will not exist without the $3 offer.

    May 5, 2007 5:13 AM
  • June 6, 2007 3:06 AM
  • Microsoft Introduces $3 Windows Bundle for Emerging Markets - Robert McLaws: Windows Edition

    September 12, 2014 8:44 AM