Staff Writer, CNET News.com
Microsoft will release a low-price version of Windows in Russia by the end of the year, an effort to wean consumers in that country off pirated software and Linux.
The Redmond, Wash.-based software giant will also announce later in the week that it will bring a version of Windows XP Starter Edition, a relatively inexpensive and slimmed down version of Windows, to a fourth, as-yet-unidentified, Asian country, bringing the total number of countries in the program to five.
Windows XP Starter Edition is Microsoft's attempt to gain more customers in the developing nations, the fastest growing markets in the world. The OS differs from regular Windows in a number of respects. Users can run only three programs on the operating system at once, for instance, and home networking has been deleted.
It also comes preloaded only on authorized PCs. Microsoft does not sell the software separately in stores.
On the other hand, it costs far less than regular Windows. Starter Edition costs about $36, according to sources, less than the $70 or more PC makers pay for Windows XP. The OS also comes with a tutorial CD and localized content to help first-time users.
The low price allows Microsoft to better compete against Linux desktops, executives have said. Because Starter Edition customers can get patches and updates, Microsoft hopes that PCs loaded with the OS will be more attractive than PCs with pirated software.
Russia—along with Brazil, India and China—has emerged as one of the prime opportunities for high-tech companies. One Intel executive said Russia and China will likely be two of the company's fastest-growing markets over the next few years. Kraftway is one of the country's leading PC makers.
The country has also begun to promote itself as a center for technology development and outsourcing. Notable tech successes from Russia include antivirus specialist Kaspersky Labs and Sea Launch, a Russian-Ukrainian-Norwegian-U.S. joint venture that launches rockets from a platform on the equator for commercial satellite deployment. Several venture capitalists have begun to place investments in the country.
At the same time, piracy is also fairly extensive in Russia. A study released by the Business Software Alliance and IDC in July said 97 percent of the software in Russia is pirated, a figure bested only by China, Vietnam, Ukraine and Indonesia. Critics, however, often assert that BSA figures tend to be on the high side.
In the past 18 months, Microsoft has dedicated more efforts toward wooing customers in the developing world. The company, for instance, permits schools in 67 countries to obtain Microsoft Office for a few dollars and a free upgrade to Windows XP on donated computers. Intel, Advanced Micro Devices, Hewlett-Packard and others have similar programs for emerging nations.
The Starter Edition for Russia will come out by the end of the year, said a Microsoft representative. A full-fledged Russian version of Windows already exists.
Last month, Microsoft announced it would come out with Starter Editions of Windows for Malaysia, Indonesia and Thailand in October.
Microsoft will announce a fifth Starter Edition later this week for a developing Asian country, but tt will not be China, the company representative said.
A likely candidate is Vietnam, where Internet cafes are popular and products like Mr. Yee's Windows 98 can be bought for $1 in the street.