The Real Cost of $3 Windows

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LEAVE it to Bill Gates. There’s a reason he’s the richest man in the world.

On a visit to China last April, he announced a program that would sell a $3 bundle of Windows XP and MS Office to governments in poor countries that subsidize computer purchases by students.

“All human beings deserve a chance to achieve their full potential,” Gates said in announcing Microsoft’s latest program to bridge the digital divide.

It was a public relations coup and a shrewd business move besides.

Now $3 is a great price for MS Office 2007, even though it’s the Home and Student Edition that doesn’t have PowerPoint. But Windows XP Starter Edition is a crippled version of a five-year-old operating system, with networking disabled and multitasking severely limited.

So the software isn’t great, but it’s good enough to do the job.

Unfortunately, the “job” isn’t just personal productivity, it’s technology lock-in. It’s all about creating a new generation of computer users who are hooked on Windows and programs that run under the proprietary operating system.

Microsoft isn’t shy about this goal of “reaching the next billion” computer users and tying them in to its technology.

“Many of these people we think are going to be consumers down the road,” said Orlando Ayala, senior vice president for Microsoft’s emerging segments market development group.

A closer look at the $3-deal also exposes software pricing as an artificial and arbitrary affair. Why sell software priced at hundreds of dollars for just $3. Why not $2? Or $5?

Even the Starter Edition is an arbitrary, marketing-oriented creation that artificially limits the functionality of software. It harks back to the day when some marketing geniuses at Intel decided to sell a version of the 486 processor with the math co-processor disabled, simply so it could sell the same chip at a lower price–without having customers who were willing to pay more for it complain. Crippling a piece of software so you can sell it cheaply makes just as much sense.

Significantly, Microsoft’s $3 offer comes at a time when the open source Linux operating system is becoming increasingly popular as a free alternative to Windows on desktop and notebook computers. By aiming its program at developing countries, Microsoft seems determined to head off Linux in markets where the free alternative is most likely to thrive at Windows’ expense.

But in the same week that Gates announced the $3 subsidy, a major software milestone passed without fanfare.

There was no Times Square countdown. No whiz-bang demo by an aging technology   guru . No big advertising campaign or clever TV commercials. With a refreshing lack of marketing hype, the latest version of Ubuntu, one of the most popular Linux distributions, was released to the general public on April 19.

On that day, the Ubuntu home page was replaced with a bare page under a headline that read “Ubuntu 7.04 – Well Done.”

There were just two sentences under the headline: “Thank you to everyone who has helped make Ubuntu 7.04 a reality. Thousands of you have helped code, test, translate and promote Ubuntu and everyone can celebrate today’s release.”

Below the note were links to servers in 30-odd countries where the 700MB file (an ISO disc image) could be downloaded.

The lack of hype wasn’t the only thing that set Ubuntu apart.

Bucking industry trends, Ubuntu developers delivered the latest version of the operating system on time, as promised. In stark contrast, Microsoft missed numerous launch targets on its five-year road to Windows Vista, and even Apple has had to push back the June release of Leopard, the new version of the Mac OS X operating system.

The on-time delivery of Ubuntu 7.04 is yet another sign that the open source approach to software development works. Unlike the traditional approach in which one company hires all the programmers and controls product development, open source projects are farmed out to volunteer programmers around the world, working cooperatively over the Internet.

And Ubuntu 7.04, code named Feisty Fawn, is not crippled software. It’s a sophisticated, fully functional, modern operating system that is more secure, and arguably more efficient than Windows Vista. It also comes with a boatload of excellent software, including an office suite that does what MS Office does–all for free.

So why would a developing country want to pay $3 per PC when it can get a much better deal for free? The real cost of Microsoft’s $3 offer to developing countries is much higher than its price tag suggests. The real cost is getting sucked into a proprietary world and the loss of choice that open source software would bring.

Source by Chin Wong

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