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It Will Start, But Will It Go?

Two weeks ago Microsoft held an analysts meeting at their headquarters. I've spoken with several people who attended, who revealed some telling details of the event. A significant amount of time was devoted to Linux, including dedicated sessions designed to continue the anti-Linux propaganda that

"it's not cheaper" and "it's not more secure." If it's not either of those, why would anyone consider Linux? Even the most ardent Linux fans would be hard-pressed to claim that Linux is easier than Microsoft.

More interesting was the information that is slowly leaking out about a crippled version of Microsoft Windows XP in the works called "Starter Kit," which many believe is meant to slow Linux adoption overseas. I predicted this development more than a year ago (see MS Windows XP Lite), as Microsoft for the first time in a decade faces meaningful competition. Microsoft's "one pricing globally" strategy is something they must abandon. Only a monopoly can get away with that - every other company has to tailor their price to the market. Part of this is creating differentiated products suited for each market. The Starter Kit seems to be the first example of this.

What surprises me is just how limited the Starter Kit will apparently be. If this was a car, it would start but then you'd find out it only goes 25 mph because the parking brake is intentionally and permanently left on. Certain limitations also seem misguided, like limiting multi-user machines which are likely to be popular in emerging markets. There's no good reason for Microsoft to give an inferior product to third world countries except to protect their profits. Americans would reject these products, but apparently they believe others will not be so discerning. I think they'll be surprised how savvy the computer buyers in these countries will be.

From the information I've gathered, which may be incomplete given that the Starter Kit hasn't been released yet, here's how the Starter Kit seems to compare to Linspire, and the decision emerging markets will have to make:

XP Starter Kit
Intended Use
Business, School, Home
Home Only
No limits
52 Language Packs
3 (Thai, Malay, Indonesian -
for less than 6% of the world)
Under $10 (OEM)
Under $50 (OEM)
Simultaneous Programs
Limited only by memory
Limited (no PC-PC, shared printers)
Multimedia Tutorials
Bonus CD
Shared PC (multi-user)
October or later

Buyers of the Starter Kit will still be paying a significant premium over Linspire. They will also receive a product that is quite limited when compared with its Linux counterpart. Also, Microsoft appears to have very judiciously selected only minor languages. What happens when they want to offer a product to India who requires it in English? Microsoft will be hard pressed to offer them a product since there will almost immediately be a grey market where it is re-imported into the US and other places.

Get Linspire: Feature-rich and affordable!
The good news is that these are the seeds of healthy competition slowly germinating. Microsoft claims to have 600 people working on Starter. I'm not sure it takes 600 people to rip features out of XP. Perhaps it's time for Microsoft to consider a Linux product of their own? We have less than 100 employees and have made a product that compares very favorably to the full-featured version of of XP, let alone the version shown in the chart above. Now that would "start" things up in a big way...

-- Michael

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