Pity Microsoft (NASDAQ:MSFT). For all the grief we give the company about its failure to plug security holes in its software, its historical problems with the blue screen of death, and its abuse of its monopoly position on the operating system market, the company really has done a lot of good. Remember, this company went to all the trouble of writing an operating system so good that it has been adopted around the world, vastly simplifying personal computing. And then what happened? A bunch of overeducated, under-moraled teenagers went and hacked the heck out of its copy protection and began selling pirated copies of its programs for $5 a pop.
The pirates, and their customers, argue that Microsoft charges way too much for its software for ordinary consumers in low-wage countries to afford it. And they use that as justification for stealing the software. Lovely.
But hand it to Microsoft. They took the high road and, rather than just wave the stick of lawsuits and criminal prosecution at the pirates, the company is also offering a carrot. Admitting that the pirates' arguments have some merit (even as their criminal conclusion is devoid of any merit at all), Microsoft has embarked on a project to bring cheap Windows software to the masses. As fellow Fool Alyce Lomax reported back in June, and as I followed up on in August, Microsoft has created a down-market version of its famed Windows software called "Windows XP Starter Edition" for the developing-world market. Microsoft has been pre-loading the software onto basic box computers and will begin selling them in Thailand, Malaysia, and Indonesia in October. The company advised back in June that it would expand the program to two other countries at a future date, and that date has arrived.
Lucky country No. 4 is Russia -- home to a software market that is estimated to be 97% pirate-dominated. Microsoft plans to begin selling computers loaded with its Starter Edition there closer to the end of this year. (The fifth market is set to be announced later this week.)
Selling for an estimated $36 per program, Microsoft's initiative will not be boosting its earnings anytime soon. The best we can hope for is that it will stem the flow of revenues lost to illegal copies of Microsoft's software. That, and keep customers hooked on Windows so they are not tempted to defect to Linux alternatives such as those sold by companies such as Red Hat (NASDAQ:RHAT) and Novell (NASDAQ:NOVL).
For more Foolish news and commentary on both these Microsoft stories, read:
- Microsoft's European Catch-22
- Microsoft Heads Down Market
- Microsoft Strips Down
- Microsoft's Punishment Delayed
Fool contributor Rich Smith owns no shares in any company mentioned in this article.
