Saturday, November 15, 2003
http://www.theregister.co.uk/content/4/33963.html contains the following :
Microsoft recently broke its global pricing policy for the Thai market,
offering steep discounts in the Royal Kingdom for its Windows and Office
products. From a report at Linux Insider, we learn why.
First-time computer users are flocking to a government-subsidised
programme to bring cheap PCs to the public. Although pirate copies of
Windows and Office have a street price as low as $4, the information
ministry's scheme of selling PCs loaded with Linux and OpenOffice for
$250 is a runaway success. A million new PC owners will be using Linux
within the next few months.
"Charging Thai consumers nearly $600 for Windows/Office is the
equivalent of charging US consumers $3000," notes the report. But even
at the right-sized price of $37, Thai first-timers are preferring Linux.
Which also cites Linux's superior Right-to-Left support as a reason why
the ministry's computers are popular.
>From the report we can draw several, and some surprising conclusions. As
a business model, charging a software licence fee against a comparable
free rival is now, perhaps, a risky proposition. The oft-cited factors
of global brand appeal (Microsoft is one of the world's most recognised
names) and integration count for little in emerging markets.
This isn't to say Microsoft will disappear in a puff of smoke: with a
cash pile of $51 billion, it isn't going to go away anytime soon. And it
can conceivably switch, as IBM did, from dictating the market to shift
to a services model where it maintains legacy code: keeping it just
about up to date for incumbents to count the costs, and find it cheaper
to stay where they are. Microsoft's most valuable software asset right
now is not any of the interesting file system or user interface
enhancements in Longhorn that it unveiled at PDC, it's Windows Update.
Keeping the worms and viruses at bay is going to be a full-time job:
probably one that ensures Microsoft's long-term survival.
But in terms of simple economics: when a piece of software with an
expensive licence fee is pitched against a free rival of equivalent
functionality, the software with the licence fee will lose. And this
particularly applies to emerging markets in the East. Here in the
occident, we expect to hear "exit costs" to emerge as the dominant theme
of Microsoft marketing in the coming months and years.
We also have an anecdote to offer, which might be useful.
Alt-F4?
This reporter gave up Mac OS X for Ramadan. Well, sort of. Fasting is
good for soul, to be sure, which explains why 2.5 billion people around
the world practice it in some form, but my reasons weren't so
high-minded. Not having spent more than an hour at a time at an x86 PC
in the past three years, I was curious to see what was going on in the
Windows world. I have no great revelations that you haven't heard: yes,
Opera on Windows is incomparably great (and makes Safari look like, to
paraphrase my colleague Ashlee Vance, a grey rectangle). And yes, the
hardware is much better value and feels dangerously cheap. (When I began
to burn a CD, the USB bus failed: Windows reported that there had been a
"power surge" - and disabled all the USB devices).
But all this, you already know. However, I found that moving from a
coherent (although still flawed, as John Siracusa points out this week
in his latest heroic installment) the user interface on Windows is a
very jarring experience. There are many patches, spyware and virus
checkers to install, nothing is ever quite predictable, and the system
guides the user over a barbed wire fence. Ctrl-W now closes many
applications windows, but not all. Alt-F4 closes the others. What should
I press?
Now this is relevant, we figure. The new PC users in Thailand have only
some muscle memory of legacy systems, which levels the playing field in
unexpected ways. Linux on the desktop is still immature and infuriating,
but for a new and resourceful user, the legacy is as much of an
encumbrance as it is an opportunity. And here's the key.
Linux Insider reports that most of the new Linux users are expected to
stick with their PCs thanks to the fanatical level of support provided
by the Thai Linux user groups. Gartner predicts a 70 per cent stick
rate: which is quite extraordinary, given the power that is so often
attributed to factors such as branding and incumbent advantages.
So here we have two related phenomenon. A government is prepared to look
after its people and subsidise a low-cost PC initiative, which
enfranchises a new middle class. (Thailand's infant mortality rate
doesn't look to shabby compared to some laissez-faire countries, such as
the United States). And community based support groups, which are very
much part of software libre's growth, hold a huge advantage, here. The
report cites Thai language support as a key factor in Linux's
popularity: but this didn't appear out of nowhere over night.
Asked to "think local", Thailand has provided an intriguing and
successful solution: a community-based model that atomises concepts
we're used to thinking of as important, such as "brand". It's a new way
of doing business, and we look forward to seeing how Western companies
adapt, given that the potential market is so large in Asia.
And is it too early to declare the software licence dead? ®
- posted by sankarshan @ 11/15/2003 06:38:00 PM
