On Wednesday, The Wall Street Journal reported that software juggernaut Microsoft
Microsoft is attempting to kill three birds with one stone here. First and most obviously, creating an entry-level version of a company's flagship product is a well-known technique used in a variety of industries. A good example is Toyota's
More important are Microsoft's other two goals. It is no secret that the company fears it is losing market share to the "free" Linux operating system, especially the Linux versions repackaged (and sold) by companies such as Red Hat
The final bird in Microsoft's sights is the threat of pirated Microsoft operating systems draining away sales of licensed software. Again, even pirates charge something to compensate themselves for going to all the trouble of cracking into the CD-ROM that contains the operating system, duplicating the program, and so on. By charging just a nominal fee for its stripped-down version of Windows XP, Microsoft can offer consumers of limited means a chance to buy a licensed version of its software -- and both the clean conscience and lessened fears of getting a bum copy that go with it -- for not much more than the cost of a pirated version.
Smart move all around, Microsoft.
Fool contributor Rich Smith owns no shares in any company mentioned in this article.