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 News.com 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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