MS price policy firm despite open source

Recent moves by Asian governments to push adoption of open source software will not change Microsoft's global single-price policy

SINGAPORE--Recent moves by Asian governments to push adoption of open source software will not change Microsoft's global single-price policy, according to a senior executive from the software giant.

"I'd expect governments to look at open source alternatives. That's a good thing," said Oliver Roll, Microsoft general manager for Asia-Pacific and Greater China.

Despite the pressure, the firm is committed to its single-price rule, he said.

"We don't think it's healthy for governments to regulate in favor of one option. It's not what they have a competency to do," said Roll.

"When governments and companies move away from the emotional debate around open source and look at the business value, most will choose to go with a commercial solution," he said.

He dismissed the idea that users in poorer Asian countries did not care for the feature bloat found in each new version of Office, or for the price which Microsoft charges for the new add-ons.

"Each user uses a different 20 percent of the features," he said, hence the need for packing so much into Office. Also, with both slimmed-down and feature-packed versions on sale at different prices, users can choose what they want to pay for, he argued.

Several Asian governments have recently embraced open-source software in an attempt to fix problems such as high software costs and wide-scale software piracy. The price of Microsoft software is often cited as the root of the problems.

Authorities in Asia have bemoaned the company's lack of flexibility, arguing that market price should be tied to local economic conditions. Being forced to use English-language versions because the lack of local-language options is also a sore point.

Countries like Malaysia, Vietnam, China, Japan and Korea are wary of giving monopolistic control of crucial software to a foreign-based corporation, free to charge any price without regard for national interests.

Roll pointed out that open-source office packages such as OpenOffice or StarOffice lack the sophistication of the new Office System 2003, and instead "replicate the Microsoft Office of six or seven years ago." He also said the firm was trying harder to make more local-language options available in Asia.

Speaking at the Singapore launch of the new Office System 2003 productivity suite, he said that while the single-price policy won't change, the company was willing to give discounts, if it would help certain IT-disadvantaged groups.

He cited the recent Thailand subsidized PC program, in which Microsoft gave heavy discounts on its Windows and Office package. In addition, there is a special student-teacher package of Office System 2003 priced at S$279 (US$149), which allows for three installations, he said.

Although there has been concern that cheaper Office alternatives--such as StarOffice from Sun Microsystems and its open-source sibling, OpenOffice--would eat into Microsoft's overwhelming share of the desktop software market, analysts said that has yet to happen.

Though Office revenue was essentially flat in Microsoft's fiscal year 2001 versus a year earlier, sales rebounded following the introduction of the controversial Software Assurance licensing program in 2002. Wall Street analysts expect Office sales to grow to more than US$10 billion in fiscal year 2004, compared with US$9.23 billion in 2003.

News.com's David Becker contributed to this report.