Microsoft Scales Down Windows For Thai MarketMicrosoft Scales Down Windows For Thai Market

Microsoft Corp. is developing a slimmer version of its Windows operating system for the Thai government's low-cost PC program, a reflection of the impact open-source Linux is having on the desktop market in Asia.

The entry-level version of Windows XP will contain less capabilities than the regular professional and home editions, and will be available in limited, selected markets later this year, Microsoft Thailand Managing Director Andrew McBean said in a recent interview with The Bangkok Post.

The Redmond, Wash., company has provided the Thailand ICT Minstry's program with Windows XP Home and Office standard editions for 1,500 baht, or about $38. The program to get budget PCs to Thai consumers was launched last May.

Until now, Microsoft has preferred to sell Windows and Office for the same price no matter where they are sold in the world. Market researcher Gartner Inc., however, predicted that Thailand's PC program would likely force Microsoft to reconsider its pricing model in poorer nations. The average Thai worker, for example, makes $7,000 a year, and the combined cost of Windows XP Home and Office XP is nearly $600.

A Microsoft spokeswoman, however, said in an email Monday that the offering was "unique" to the Thai government program and "the only trial of its kind a the moment."

Besides the lack of disposable income in poor nations, Linux is also having an impact on the Asian software market, experts say. While the desktop version of the open-source operating system doesn't have all the capabilities of Windows, its distributed for free, prompting several Asian countries, including China, to move toward wider adoption of the OS.

Microsoft's decision to develop an entry-level edition of Windows may not be directly related to Linux, but there's no doubt the free OS has lowered the bar for pricing of software in many countries, Gartner analyst George Weiss said.

Windows costs more because of its many capabilities and support for a wide variety of third-party software, along with Microsoft's own products. The market in poorer nations, however, appears to be calling for an inexpensive alternative with less capabilities.

"Linux is starting to chip away at the levels of functionality, or the gap, that might have existed between Linux on the desktop and Windows at a much lower price point," Weiss said. "What (Linux) is doing is forcing Microsoft to look at different user categories in terms of their needs, for the desktop.... (Microsoft) is saying we need to meet that kind of market or Linux will take it."

Customers of the upcoming version of Windows would be provided with an easy upgrade path to a full version of either Windows XP Home or Professional, McBean told the Post. In addition, the entry-level product would include enhanced tutorials for first-time users.