What Is Microsoft's Unlimited Potential?
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Overnight, Microsoft announced a bold, new initiative to increase revenue in emerging markets. Goal: Create 1 billion new computer users. |
The announcement is complex, so we are dedicating several posts to explanation and analysis. This first one focuses on the what, while subsequent posts will look at the how and the why.
Microsoft announced the initiative in Beijing, with a cadre of attending executives, including Chairman Bill Gates and Will Poole, corporate vice president of the Market Expansion group.
Three broad areas make up the initiative, with a $3 per student product offering sure to capture the attention of the news media and bloggers.
Roger Kay, president of Endpoint Technologies, described Microsoft's effort as "a big step forward." Microsoft Watch spoke with Kay from Beijing, who was there for an event unrelated to Microsoft's.
The initiative is an expansion of Microsoft's existing Unlimited Potential program. Microsoft is breaking its efforts into three broad categories: education, innovation and economic opportunity. The first category is about technology education and providing access to technology through education. The second is more Microsoft marketing speak. The final one is about using Microsoft technologies to foster local economic growth and to generate jobs.
Through Unlimited Potential, Microsoft will seek to make computers and software available to more people around the world.
"It took about 35 years to get about 1 billion people access to computers," Orlando Ayala, senior vice president for Microsoft's Emerging Segments Market Development group, told Microsoft Watch. "It can't take us another 35 years to reach another 1 billion."
Microsoft's goal is to reach the next 1 billion people with computers before 2015. The choice of 2015 isn't arbitrary. That's also the United Nations' target year for achieving the eight Millennium Development Goals.
The Three Buck Solution
Through its Partners in Learning program, Microsoft plans to work more closely with government agencies and local organizations on improving student technology education. Not surprisingly, the program seeks to certify students and teachers—722,000 to date—on Microsoft technologies.
Through the program, Microsoft will make available to governments the Student Innovation Suite. For $3 a student, governments receive Learning Essentials 2.0 for Microsoft Office, Microsoft Math 3.0, Office Home and Student 2007, Windows Live Mail Desktop and Windows XP Starter Edition. Microsoft charges the $3 fee to local governments; the students do not pay.
At first glance, the pricing is shockingly low considering the broader value of the software. For example, in the United States, Office Home and Student 2007 retails for about $150. But further examination reveals pricing not so out of line with what college students might see in the United States. It's fairly typical for universities to provide students with Microsoft software for as little as $5 or $10 a copy under a Microsoft Campus License. While there are other significant cost differences between a Campus License and the Student Innovation Suite, the fundamental approaches are similar. After all, they're all software licenses.
The $3 suite would be available to governments with PC purchase programs for students. The PCs must be for the students directly, rather than for schools. The software also would be available in some developed countries, too, to the poorest 15 percent, or thereabouts, of the population.
"It's a bit out-of-box thinking. It is very clever," said Clive Longbottom, service director of Business Process Analysis for Quocirca. "We wouldn't see millions of licenses sold through educational institutions in established markets. You will see thousands."
But in markets like China, "you will see millions," he added.
Microsoft will offer its newest product versions, with a glaring exception: Windows XP Starter Edition instead of its Vista successor. While it might appear Microsoft is devaluing the suite—offering something less for that $3—the real reason is more logistical. Microsoft wants to support the broadest hardware, which means XP rather than Vista. There are simply too many driver compatibility and other issues with Vista. However, Windows Vista Starter Edition will be made available at a later time.
Microsoft will start offering the $3 suite to governments in the second half of 2007, which indicates how the company really sees the future state of Vista hardware support. Actions speak louder than marketing messaging.
Dollars and Sense
Microsoft is heavily touting the economic benefits its Unlimited Potential program will generate, particularly for creating jobs and developing local economies. The effort heavily relies upon Microsoft leveraging and extending beyond its worldwide network of 700,000-plus partners.
To achieve its goals, Microsoft will "expand to new categories of partners," such as government agencies, NGOs (nongovernmental agencies) and development agencies, Ayala said.
One anchor to the effort: Microsoft Innovation Centers, of which there are 110 in 60 countries. Microsoft will expand the number of centers to 200 in 25 additional countries by 2009.
Additionally, by the end of 2007, Microsoft will create an employability portal for helping people in developing countries to find jobs. The idea is to match skills with potential jobs and, in conjunction with other programs, to create more local jobs. Both programs will leverage local partner channels.
"The institutions that operate within emerging markets—governments, education, health and private enterprise—are beginning to recognize that without an educated, technology-aware workforce there's a pretty good chance that they won't be able to grow economically beyond their own borders or improve the lives of their citizens," Simon Yates, a Forrester research director, told Microsoft Watch.
Microsoft also made a vague announcement about an alliance with the Asian Development Bank, which would promote regional, economic development.
Additionally, Microsoft will expand its PTA (Partnership for Technology Access) program to Argentina, Botswana, Chile, China and Egypt. PTA works with governments and local partners to create new ways to open technology access, such as nontraditional payment and services plans.
Microsoft also announced the Telecentre Knowledge Network, in cooperation with the Academy for Educational Development. While officially launched today, a beta Web site has been available for some time. The wiki is a growing knowledge base of information for creating, developing and maintaining telecenters.
Microsoft is purposely distancing the Unlimited Potential program from philanthropy work done by the Bill & Melinda Gates Foundation. Longbottom inquired about any relationship—a reasonable question with Gates as the Unlimited Potential front man—and was told the projects have nothing else in common.
"The Bill and Melinda trust will be way out of this," he said. "Full marks for sticking for principles."
Related Posts:
- Microsoft's $3 anti-Linux Weapon, Linux Watch, April 19, 2007
- Tellme About Dial Tone 2.0, Microsoft Watch, March 16, 2007
- Windows Mobile Turns Six, Microsoft Watch, Feb. 8, 2007
- It's the Gulag or Linux for Some Russian Schools, Microsoft Watch, Feb. 7, 2007
- Microsoft Q2 2007 by the Numbers, Microsoft Watch, Jan. 25, 2007
- What the HP-Microsoft Deal Really Means, Microsoft Watch, Dec. 14, 2006
- Microsoft Launches 'Pay As You Go' PC Trials, Microsoft Watch, May 22, 2006
- Will Vista Pump Up Microsoft's Future Profits, Microsoft Watch, Feb. 3, 2006
- Microsoft Readies Two More Cut-Rate Windows Bundles, Microsoft Watch, Aug. 11, 2004
Comments (21)
Well Joe this just screams
"Linux is eating our market
Sincerely yours,
Microsoft"
Although the whole project looks interesting. There are a couple of catches.
-It is Windows Starter which is a joke of an OS
-It is Office Student and students have this tendency of stop being students and becoming professionals.
On the other hand Linux and Open Office are three bucks cheaper. They're a full fledged OS and functional office suite and they will keep being three bucks cheaper when the student becomes a professional.
PS. Do the 3 bucks include antivirus and anti spyware? Don't forget some of the great features of Starter
With Windows XP Starter Edition, first-time home PC users can have up to three programs and three windows per program running concurrently.
Further simplification of the operating system includes setting a maximum display resolution of 1024x768 and no support for PC-to-PC home networking, sharing printers across a network or more advanced features such as the ability to {not} establish multiple user accounts on a single PC.
Posted by Gerardo Tasistro | April 19, 2007 12:12 PM
Gerardo, I think Microsoft intends to acclimate these users to Windows and Office so that when they become professionals, they will stick with what they're familiar with. It's a smart strategy.
I didn't realize that WinXP Starter Edition was so crippled. But for most of these newbies and students, it will probably be enough to get by on.
The important thing to understand is that this initiative is Microsoft's way of establishing their empire in the Third World. Through "education" (brainwashing). Through economic tie-ins and job creation. Through infiltration into governments and industry. It's diabolical.
How will Open Source fight this? It takes deep pockets, which is why Microsoft can pull this off.
Grassroots efforts are no longer enough. We need to rethink our strategy.
Posted by Richard Eng | April 19, 2007 2:51 PM
Richard I totally agree with you and I see Microsoft's intentions. My questioning is what will become of this project in 5 or 10 years. If they can get this for 3 bucks it is great, but sooner or later (I believe sooner than later) Microsoft will want its investment's worth.
Will the "third world" stop being the "third world" in 5 years or the time it takes someone to go through college? Will they have the 360 US Dollars to pay for Vista Ultimate or as it is here in Mexico 630 US Dollars. What will Microsoft be selling them when the time comes to use more "professional" tools? And at what price will they sell them? Or will these people turn to what some of them do today, piracy?
Posted by Gerardo Tasistro | April 19, 2007 5:38 PM
Richard Eng wrote:
I didn't realize that WinXP Starter Edition was so crippled. But for most of these newbies and students, it will probably be enough to get by on.
It might be enough--until those same newbies and students get their hands on an OLPC running Linux, and are able to compare the two systems side by side. On the one hand, a closed system with cut-down functionality offered for a cut-down price. On the other hand, an open, free system--no built-in limits.
Then we'll see what those newbies and students think...
Posted by Lawrence D'Oliveiro | April 20, 2007 3:15 AM
Add .50 cents antivirus and .50 cents for spyware. What a load of crap.
Posted by More | April 20, 2007 9:19 AM
And don't forget the .50 cent upgrade fee (LOL)
Posted by Michael | April 20, 2007 9:25 AM
this is nothing but a shallow offering
linux is taking off in these coutries and microsoft is afraid very afraid.
they are doing this also as a political move because most of those countries are going to vote no in getting open-xml approved as a standard - so they are hoping they get all the kiddies addicted to their crack and then once they are hooked the hammer will fall.
a word to these countries - vote no on open-xml as an ISO standard and chose linux instead of windows and you will very glad in the end - microsoft is nothing but junk software and stay away from it as far as you can. just go with linux and open office - and linux has tons and I mean tons of development software that you can learn to program yourselves and be self supporting. the development programs on windows pale in comparison to what is available on linux.
Posted by jsusanka | April 20, 2007 12:16 PM
This is a fair and straight tech reporting. MS made a smart and strategic move.
Posted by pal-in-tech-not-ms-lover | April 20, 2007 12:57 PM
This is fascinating....MS gets all the poor kids hooked on their drug, for a loss-leader entry price. Later they get them into the really expensive hard stuff. Guess they have been reading all about the Columbian drug cartel ! Note they said there are lots of business opportunities...for whom, I wonder ? Anyone selling a Windows app will surely be ticked at MS, because THEY won't be able to afford scrape-the-bottom prices for these students. And if they can't, they concede the entire market to MS ! Nice. Can you say "abuse of monopoly position" ? So the smarter students will hopefully see that if they DO buy this $3 package, they will either be locked into the MS world as supplied, OR they will have to fork out a lot more money to get non-MS apps, or better ones from MS. Nah. Stick with Linux. Then your costs are contained, forever, unless you want to buy some special Linux app (if there is one that charges - games maybe ?).
Posted by Brian | April 20, 2007 4:01 PM
The software is free in the countries now. Why will they pay $3 in the future?
How can they afford the $100 computer or will the foundation sell on?
Posted by cornstoves | April 21, 2007 12:59 PM
There is on good will in this venture. The free Linux computer for the poor project, which seems about ready to launch has generated this cynical response from Microsoft.
It's all about turf war. People are getting less patient with Microsoft's attempts to lead them around by the nose using their office suite and desktop dominance. Linux has become an extremely viable alternative to Microsoft Inc. operating systems; so Microsoft is pulling out every trick they can think of to maintain their grip and control over people through the desktop.
To prevent any competition from developing and driving the "heretics" back into the herd Microsoft Inc. is willing to sell things cheap now to keep people from straying.
If you give someone control over young minds (by teaching them and propagandizing them etc.)then that "someone" will control the young for the rest of their lives. So these "virtually free" training resources are just an attempt to steer the young away from other (I think better)alternatives.
Posted by Mike | April 21, 2007 1:07 PM
Unlean up!limited potential? Hah.
MSFT is a GREAT short.
PC buyers HATE Vista - and rightfully so.
It's a rip-off and a disaster.
DELL just announced they're switching back to XP on new machines. Watch them clean up!
Posted by Arline Brecher | April 21, 2007 1:31 PM
Unlimited potential? Hah.
MSFT is a GREAT short.
PC buyers HATE Vista - and rightfully so.
It's a rip-off and a disaster.
DELL just announced they're switching back to XP on new machines. Watch them clean up!
Posted by Arline Brecher | April 21, 2007 1:32 PM
Arline Brecher
You should have checked a little more with regards to DELL, they are actually providing BOTH Vista and Xp !
Posted by Neil | April 22, 2007 2:38 AM
IS MSFT doing anything different than McDOnalds and other global firms. DO they not get the young hooked on junk food? Your glass is always half empty when it comes to Microsoft - wake-up the world is in chaos and here is a solution to provide education and even jobs and all you can do is pick it apart?
Posted by Ken | April 22, 2007 5:23 PM
Way to go MS !
Brain wash little kids. This is one of the many clear indicators that MS is scared of Linux eating up their monopoly market.
Posted by Sun | April 23, 2007 12:02 AM
Is Microsoft afraid of Linux? I sure hope so. Any company that is not afraid of the competition is travelling blind.
Is Microsoft right to do something about keeping the competition at bay? I would think so. Isn't that what business is all about?
Is educating millions of children around the world a good idea? Definitely.
So Linux is doing it. So what? Are the Linux fans afraid of Microsoft stepping in and doing what MS has always done well - beating the competition, maybe not with more innovative products, but with products that actually work without the user having to get a lot of "oil" on them tinkering around.
Posted by Maverick | April 23, 2007 4:00 AM
Now, how is this different from dumping?
Posted by Taras Hnatyshyn | April 23, 2007 12:10 PM
Yea Taras ! Dumping ! I think the legal description is "selling something in one country for less than the cost of manufacture in the country of origin". Now I just can't believe that it costs less than $3 to create all that packaging, documentation and the CD's, so.......dumping it is. But let's suppose for one second that the actual costs is truly less than $3......how would you like to defend the dumping charge when you (MS) are selling almost the same thing in the U.S. and other first world countries for a couple of hundred......that would make the markup really savage. No matter where they turn, it seems MS is slowly being boxed in by their past actions.
Posted by Brian | April 23, 2007 4:25 PM
If your looking for even more information on PC security then I would head over here as they have plenty of stuff on identity theft, antivirus software etc.
Posted by Internet Security | July 18, 2008 10:04 AM
Relationships count. When asked for three factors that influence their online purchases, 62% chose familiarity with vendor. 39% gave the opinions of friends and colleagues a major role. Only 21% said emails and coupons were influential. Makes sense to me. A coupon from an unknown does not impress yours truly. A sales- pitch email from an unknown is likely to be deleted. However, a coupon from a desired and trusted source might even get me to cough up my email address. The reverse is not true.
Posted by foreclosures | August 5, 2008 2:46 PM