News

Russia is Fourth Country for Windows XP Starter Edition

Microsoft hopes to get the software to PC OEMs in Russia and the Commonwealth of Independent States by early 2005.

• By Michael Domingo
• 09/27/2004

In early August, Microsoft had confirmed that it had created a version of Windows XP that would have limited distribution in several countries that it calls "developing technology markets." The pilot program debuted in Thailand, Malaysia and Indonesia.

The company plans to name a fifth country in the coming weeks. Gartner principal analyst Annette Jump guesses that the next version will target India, China or Brazil. Each is a major PC market with a high level of piracy, she notes. [Update: Microsoft on Sept. 29 announced India as the fifth country. -- MD]

"I am not surprised that Microsoft chose Russia as it is one of the 10 largest PC markets worldwide," Jump says.

Traditional Windows pricing is prohibitive in a country where the typical Russian salary is equal to $200 monthly. Countries with low per capita income can be hotbeds for software piracy. The Ukraine, a CIS member, has been fingered among the worst offender countries of pirated software by rate of piracy, according to a recent report by research firm IDC.

Gartner data suggests what happens to new computers that ship with Linux or with no operating system in Russia. New PCs in Russia ship with Windows 80 percent to 85 percent of the time. PCs with Linux or no operating system account for 15 percent to 18 percent of new systems. Look at the installed base, and the picture changes completely, Jump says. Windows, both licensed and pirated copies, is present on 97 percent to 98 percent of PCs in Russia.

Microsoft faces significant challenges in trying to use its Starter Edition to get some revenues in cases where PC makers would have shipped systems with Linux or no operating system.

"I suppose the price that Microsoft will charge for this OS would be important issue, as it will partly determine how many vendors will be willing to use it instead of free Linux OS," Jump says.

The Starter Edition has software governors that prevent the system from running more than three applications at once, and each application is capped at three windows at a time. Hardware is also restricted to 128 MB of RAM, a 40 GB hard drive and 800X600 screen resolution.

Jump says Microsoft limited its pilot program in other ways that will reduce the attractiveness of the software to customers -- and reduce the effectiveness of the program for Microsoft's own goals over time. "Microsoft has failed to address security issues such as providing antivirus software and the distribution of patches and security fixes without the reliance on slow, expensive connections," Jump says.

Microsoft also hasn't developed an upgrade path for users who have grown out of the Starter Edition. "This means users would have to buy the full retail version of XP Home and reinstall all their software and move their data," she says.