Is Microsoft planning to release more customized, cut-rate versions of Windows to help stave off Linux's encroachment, especially outside the U.S.? The answer is … maybe.

Last summer, in response to the success that Linux was having in the Thai marketplace, Microsoft began offering Thai citizens a bundle of Microsoft Windows XP Home and Office XP Standard. Under the auspices of the Thai government's "People PC" project, Microsoft provided a Thai-localized version of its operating system and desktop suite.

As part of the deal, Microsoft also stripped out some unspecified features from both products and slashed the price for the pair to 1,500 Thai Baht, or about $38 U.S. Microsoft Windows XP Home sells at retail for $225; Office XP Standard retails for $499.

Last week, The Bangkok Post reported that Microsoft was developing a "Windows XP Lite" version tailored to users in markets like Thailand.

Microsoft corporate spokesman Mark Martin said that contrary to some reports, Microsoft is not touting this bundle as "Windows XP Lite," nor is it developing any new Windows release that could be construed as such. He noted that Microsoft is not currently offering users in any other countries a similar customized Windows option.

But Martin did say that Microsoft is watching closely how the Thai Windows/Office bundle is received. And other countries have expressed interest in similar bundles, he acknowledged.

"We're about half way through the first year on this. And the jury is still out on how it will roll out beyond that," Martin said.

(This is an edited version of an article from the February 6, 2004, issue of the Microsoft Watch newsletter.)