Microsoft Strips Down

The world is changing, and apparently, Microsoft (Nasdaq: MSFT  ) has to follow suit. Today, CNET reported that the technology giant is offering a less comprehensive version of Windows XP, dubbed Windows XP Starter Edition, for a less comprehensive price. The product is for sale in Thailand.

Not so many months ago, many pooh-poohed the notion that open-source operating systems like Linux, championed by companies like IBM (NYSE: IBM  ) and Red Hat (Nasdaq: RHAT  ) , to name a few, could pose any threat to Microsoft. After all, Windows has a lion's share of the real estate on PC desktops.

However, recent months have revealed a situation in many emerging markets. That is, Windows is prohibitively expensive for those in countries that are just starting to get their populations hooked up. In addition, Windows security concerns have been noted as another reason for some countries' governments to go open source.

Of the coveted Asian market, several countries' governments have already turned up their noses at Windows, including China and Japan.

Certain PC makers have even made moves that implied they might see at least the faintest scribbling on the wall, with Hewlett-Packard (NYSE: HPQ  ) being one company that said in the spring that it would offer support for machines loaded with Linux.

Windows XP Starter Edition, which doesn't include all the functionality in the full-price version, will cost the equivalent of $36 in Thailand, a price that might make an impression on those of you who have dropped hundreds on Windows. With emerging markets a vehicle for potentially vast growth, Microsoft's doing the right thing by recognizing that economics may mean it has to strip down... before it gets stripped by rivals and change.

Is Linux a real contender or just a tempest in a teapot? Shout out on the Microsoft board here at the Fool. Or, if you are a Linux user, chat about topics and questions on our Linux Users Group discussion board.

Alyce Lomax does not own shares of any of the companies mentioned. She finds the Linux penguin mascot amusing.

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