Monday, June 07, 2004

Microsoft starts PPP pricing

Microsoft has started providing its Windows OS and Office suite of software at "low low" prices of $40 in Thailand and Malaysia for government sponsored programs.

This is the first step by the Redmond giant to change its pricing policy, which could be a bold step, and has many repurcursions.

But in Southeast Asia, the software giant seems more like an ardent suitor, wooing governments with sweet promises and gifts - such as unprecedented bargain prices on its Windows operating system.

Microsoft executives suggest that pricing policies for government-promoted PC sales pioneered last year in Thailand and used again in Malaysia this year presage a new marketing approach for emerging markets.

So far, the localized versions consist of Windows XP minus English language support. The company also has hinted that it's developing a kind of "XP Lite," a leaner Windows with features more appropriate to developing countries where "high tech" is not a reality of everyday life.

Microsoft executives are themselves being lean with details, citing competitive strategy. But they're willing to discuss the concept.

"This is a new market with very different needs, from an economic perspective, from a social perspective, from a technical perspective," Barry Goff, group product manager for Windows Client group, said in a telephone interview from company headquarters in Redmond, Wash.

Setting prices based on geography is not new in other industries. Pharmaceutical firms charge lower prices in developing markets like Africa than in mature ones like the United States. Even McDonald's sets different prices for Big Macs based on geography.

But the software industry is just beginning to move beyond a one-price-fits-all strategy.


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