Beyond Windows Starter Edition: Where will Microsoft expand next?

Microsoft's Market Expansion Group is charged with, as its name would indicate, expanding Microsoft's market share. (Market Expansion is part of the larger Microsoft Platforms & Services division -- the unit that oversees everything from Windows client and server, to Windows Live.)

Cracking down on software piracy is one -- rather unpopular -- way the company is looking to continue to build revenues, given that Microsoft's two cash cows, Windows and Office, already have cornered the PC market. Another, interrelated way that Microsoft is planning to continue to grow is by unearthing brand-new audiences for its products.

This latter strategy is where Windows Starter Edition fits in. Windows XP Starter Edition is a stripped-down version of Windows XP that is tailored for a particular low-to-middle income markets in the developing world.

Since 2003, Microsoft has introduced 25 XP Starter Edition releases. Microsoft announced on October 10 that the company had sold its one millionth copy of Starter Edition.

Microsoft is readying Windows Vista Starter Edition releases, and expects ultimately to field 80 different customized Vista Starter versions, according to Mike Wickstrand, a director with the Windows Starter program.

"We will continue to sell XP Starter Edition for quite a long time," Wickstrand said. Why? "The Tamil language version of Vista Starter, for example, won't be out as soon as Vista RTMs (releases to manufacturing," he said.

The Vista versions of Starter will not include the Aero user interface, which makes sense, since Starter is designed to run on low-cost PCs that don't offer souped-up graphics capabilities. Vista Starter releases will allow for multi-user accounts, but won't permit those sessions to run concurrently.

And in case you've been considering moving to Pakistan in the hopes of avoiding the dreaded Windows Genuine Advantage authentication scheme, think again. Vista Starter will include all the same activation and authentication requirements as full-fledged Windows Vista, Wickstrand said -- plus an additional authentication component designed to insure the user of the cheaper Starter edition actually is located in the country/market for which the software was developed. (In other words, don't get any great ideas like trying using your Brazilian version of Starter here in the U.S.)

Once Vista Starter is out in the field, what will Wickstrand's team do next? Is there an Office Starter release in the works?

Predictably, no definitive word on that from Wickstrand, though he did offer some related food for thought. "The operating system is one component (of Starter). We are looking at other offerings that could address the local market," Wickstrand said.

Wickstrand noted that Microsoft Works is already localized for many of the same markets for which XP Starter Edition is. Might there be opportunities for a Vista-Works Starter bundle?

Microsoft has said it is mulling turning Works into a service (either ad-supported or subscription-based). If that happens, would Microsoft continue offering a paid, bundled version to users in developing countries?

Again, Wickstrand wasn't ready to go out on a wire.

"Higher speed connectivity in these markets remains a challenge," Wickstrand said.

Bottom line: Microsoft isn't banking on Windows Live pouring fortunes into the Indonesian subsidiary's coffers any time soon.

All this got me thinking: What is Microsoft's -- and other ad- and services-driven competitors' -- strategy for growing market share in countries without high-speed connectivity? Sure, you can sell some services and place some ads on cell phones (which also are hardly ubiquitous in these markets). And you can sell PC access itself as a subscription service, like Microsoft is doing via its FlexGo program. But from where do Microsoft, Google, and Yahoo see services demand coming in developing nations, in the future?