Microsoft has given strong indications that it will vary the price of Windows depending on where it's selling the product, according to reports of a recent analysts briefing.
Dubbed the 'Big Mac' approach, after McDonald's variable junk-food pricing, this is in part Redmond's response to software piracy - in turn viewed by many as a local response to high prices - and is a major change from the single global price policy which has prevailed until now.
However, most see Microsoft's move as a response to both the threat Linux poses to its core business, as well as piracy.
Analyst Joe Wilcox from Jupiter Research commented: "It’s about time Microsoft starting thinking this way; too bad that it really took the competitive threat posed by Linux for Microsoft to do right by customers. I would argue that overseas, particularly in Asia, Microsoft and other software vendor pricing structures contribute to software piracy."
Piracy is highest where incomes are lowest, suggesting that the same global price model is finally breaking down, according to Wilcox. In Asia, "these so-called pirates charge prices the local folks can afford and they keep the money in the local economy," he continued.
Wilcox further argues that by charging high prices, Microsoft encourages not only piracy but also the growth of open source software, especially Linux.
"Microsoft has much more to gain than just wooing foreign governments away from Linux. I’m convinced that more regionally appropriate software-licensing fees could help curb piracy in those regions," he said. "If pricing isn’t made more suitable, companies like Microsoft could face a backlash. It would be so easy for governments, co-operating or thinking about co-operating on Microsoft anti-piracy efforts, to simply stop."
Microsoft is also aware that governments are looking at open-source alternatives, especially in places where Microsoft "isn't exactly welcomed warmly and where piracy is rampant," according to Wilcox, citing China, India and Russia as examples.
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